i have been involved with outsourcing at all levels for over 14 years. Thats on the Provider side and The Client. I have been part of the awarding process (Client) and setting SLAs ( Service Level agreements) and KPIs(key performance indicators) Thats with The British Library and the Tri Borough Out Source of Westminster City Council,Hammersmith and Kensington-Chelsea, to name just two of many contracts i was on.
At its best outsourcing workswell and allows company's/institutions etc to concentrate on their CORE business while their support services are under one umbrella. At its worst it gives a reduced service to its Client while just saving money.
Councils are all over outsourcing--- its a way of saving money while not cuting essential services. Thats both Labour and Tory run councils.
Having gone all the way through the process for Westminster CC i can say there is no way ANY political sway or nod to ANY bidder was or could have happened. Every meeting was recorded , every submission scored by a large group of people. All scores and bids could and were open after the award to all parties. A losing bidder can claim all their costs back plus a rebid if they can see anything Iffy. Lawyers were involved pre any meeting and after any scoring. Costs only scored 35% of the total points. Carillion were one of the final 3 bidders and they were close to winning !
I have been in PCT where they didnt know how many buildings they should be looking after--- that their buildings (hospitals and surgerys) were "public" buildings and they were owed £500K plus that they hadnt charged "tenants"---- never to be reclaimed----- so lets not go down the route of "public is perfect" its fecking not.
The biggest problem with a free market economy is that the big get bigger like Carillion and they diversify into areas where they are far from experts---- if one section of their Empire falls over it brings the rest down with it.
EMCOR were being hit with a "fine" fine of £9000 a month because they couldnt hit the KPI target on ONE contract, great for the Client a public body--- it was proved to be impossible and removed after negotiation.
Another contract (BBC) had a £2500 excess with their Service Provider which meant any job up to the value of £2500 had to be done regardless of in or out of the contract--- horrific for the Service Provider ( Land Securities) they brought out of that contract and Johnson controls took it over (still has a £2000 excess)
PFI contracts are the pits of the outsourcing world--- great for the Service Provider but fecking awful for the Tax Payer and as for Corbyn saying he will cancel all PFI contracts ---- they are laughing at u you twat--- their are BILLIONs to pay if you cancel the contracts its why they are still there !!
No way should ANY of the Utilities been privatised. That goes for BR and The NHS, however with both BR and NHS there should be a place for out sourcing railway stations re food /cleaning and the NHS re cleaning, security,food.
Most offices all support services can be outsourced and probably already are.
I feel for the 20,000 workforce in the UK who this morning must be kaking it re the jobs.
How many joints ventures were they in? How many work for them indirectly?
Balfour have said this has cost them 40 million. On these jobs Balfour will be looking to others to carry the bill at some stage.
Dozens if not hundreds of joint ventures mate as far as people's employment being affected it reaches scary numbers, probably 10 times the initial 20,000 spoken about. One of the contracts I'm involved with blew my mind in trying to work out how they made any margin at all without using nefarious means. They are not the only ones at it either.
We managed to get £70K out of them last week, still owe £55K.
Spoke to a supplier for my old employer (not Carillion - different outsourcer still going) last week and he said they were still owed £30K by them from when they lost the contract I worked on a year and a half ago. It's a big company and the supplier deals with them in other guises all over the place, but every time they try pursuing the outstanding, there's no one there who will take responsibility. It's hard to see this as anything other than deliberate. It is of course illegal not to pay your bills (and this company will be the ones chasing you for some of your domestic bills depending on where you live) but it appears different rules apply when you're a major plc.
Pretty sure cabinet members don't get involved in the tender appraisal process.
Hahaha!
There's burying your head in the sand, and then there's this! It's the same sort of bollocks as people at Intel were coming out with when the Meltdown vulnerability was revealed a couple of weeks ago, and the Intel CEO had (completely coincidentally, of course) dumped every single share he was allowed to a couple of months previously...
Pull the other one, it's got bells on
I really have no idea what this has to do with a UK construction company.
Drawing a parallel between corruption at the top of one industry and another. Can't be beyond your wit to see that, surely? Or do all comparisons have to be literally exactly the same, within the same industry and refer to snouts in the trough in the exact same way?
Having gone all the way through the process for Westminster CC i can say there is no way ANY political sway or nod to ANY bidder was or could have happened. Every meeting was recorded , every submission scored by a large group of people. All scores and bids could and were open after the award to all parties. A losing bidder can claim all their costs back plus a rebid if they can see anything Iffy. Lawyers were involved pre any meeting and after any scoring. Costs only scored 35% of the total points.
This is my experience as well. Procurement in the public sector is highly regulated and painstakingly documented.
I don't think there's much influence by politicians in the tendering process; but what there is is about setting the bar so that only certain companies can bid, because they have to be a certain size. This was definitely the case with Carillion - only a few companies will have been on any shortlist for a lot of the work they won, just because of this requirement. My last but one employer was a small IT outsourcing firm. They were bought by a large general outsourcer and the justification was that, as part of a larger company, they would be able to bid for a lot more contracts. At first, this worked well and they won a lot of new contracts, especially in South London. But none of them were resourced well and all have since been lost, with the risk of loss of knowledge as staff leave or are made redundant. When they lost the contract I'd worked on, of the 25 or so staff left on it, only 7 transferred over to the new provider and they lost all the network, admin and applications people.
I don't think there's much influence by politicians in the tendering process; but what there is is about setting the bar so that only certain companies can bid, because they have to be a certain size. This was definitely the case with Carillion - only a few companies will have been on any shortlist for a lot of the work they won, just because of this requirement. My last but one employer was a small IT outsourcing firm. They were bought by a large general outsourcer and the justification was that, as part of a larger company, they would be able to bid for a lot more contracts. At first, this worked well and they won a lot of new contracts, especially in South London. But none of them were resourced well and all have since been lost, with the risk of loss of knowledge as staff leave or are made redundant. When they lost the contract I'd worked on, of the 25 or so staff left on it, only 7 transferred over to the new provider and they lost all the network, admin and applications people.
Its not corruption in the back hander sense but they all play the slight of hand and illusion game:
A council having so save £30million sees it can save £3million per year going Total Facilities Management (complete outsourcing) with a Service Provider--- they go through the correct processes and at the end a company wins. Its going to under take Maintenance/catering/vending/security/cleaning/post/printing/grounds maintenance. 1)They will undertake only statutory maintenance or business critical maintenance ( often called Run to Destruction --more latter)no engineers on site they will be "ambulant engineers" walking from another site nearby 2)Front of house cleaning as normal,office areas, back of house once a week, waste bins not daily but by request (more latter) 3)Catering , forget vegan etc more fast food and much more vending (hot and cold) and coin operated. 4) Security ,only static during office area and mobil at all other time (unless requested-- more later) 5)Grounds maintenance only in the summer and nothing unless requested. 6) Printing wont be done on site but at a near by "hub" and it will take longer.
The above will produce a saving against BUDGET ---this can be used when councillors or the mass media ask the question.
However what isnt shown is all the requests that fall out of the "norm"--- when Security is wanted most evenings for Council meeting---when requests to the Help Desk for offices to be cleaned are received--- when maintenance requests (daily) arnt statutory etc---- all are chargeable.
As for the Run to Destruction Maintenance --- no worries there the Service Provider will offer to replace interest free any of the major plant that fails ---but you sign a service agreement for that new equipment --- its a mini PFI !!!!
Anything deemed a "project" will be undertaken by the service provider and they will be hiting you with a 10/20% hit on that cost.
Of course it will show against a budget somewhere but not in the line of Contract Payment.
So the illusion is of them guaranteeing you a saving but knowing they will get their money other ways.
My contract at the British Library was £4 million we did £5 million of "projects" in one year !
They hold the contracts for all maintenance and decoration of the army bases around the uk.
They may have some but not all.
Not surprised that one of these 'Tier 1' contractors have gone under and Carillions problems have been well known for a few years and once that happens, private clients won't go with them so it's possible that the public sector have tried to shore them up rather than letting them snowball into collapse. Like others have said on here, public sector procurement is very rigorous although misses the point really - big companies have the resources to be able to put bid docs together that say the right things to win the jobs on 'Quality' rather than 'Pricing' - It's all bullshit though as when they come to deliver, these huge, disjointed organisations are far too big to offer any real quality / personal service, and just assemble groups of strangers all over the country under a company name - at inflated prices.
They hold the contracts for all maintenance and decoration of the army bases around the uk.
They may have some but not all.
Not surprised that one of these 'Tier 1' contractors have gone under and Carillions problems have been well known for a few years and once that happens, private clients won't go with them so it's possible that the public sector have tried to shore them up rather than letting them snowball into collapse. Like others have said on here, public sector procurement is very rigorous although misses the point really - big companies have the resources to be able to put bid docs together that say the right things to win the jobs on 'Quality' rather than 'Pricing' - It's all bullshit though as when they come to deliver, these huge, disjointed organisations are far too big to offer any real quality / personal service, and just assemble groups of strangers all over the country under a company name - at inflated prices.
Amey Carillion have the contract for the army bases.
This has been an accident waiting to happen for some time. Disproportionate uplift in trade receivables, poor cashflow, paying dividends (£82.7m in 2016) from proceeds of sales, high debt & pension fund deficits and aggressive payment terms with suppliers.
I sat with a firm in the property sector this morning, who have just won two major contracts. The most pleasing aspect, for them, is that they were advised that their bids were nowhere near the cheapest and that the work was won on the quality of the work they had been doing elsewhere.
The old maxim of buy cheap, buy twice, springs to mind. You get what you pay for at the end of the day and it seems Carillion were trying to make money not on the contracts that they won, but on then trading those further down the line. Looks like a form of Ponzi to me.
Endorse @Goonerhater on this. Not Carillion but I was privy to the negotiation process in several early PFI tenders where pension costs needed to be valued at an early stage. The real value to the company was in the finance deal. The banks would lend at a rate that reflected the risk of them not being repaid and the fact that the project had not commenced. When the building works had been completed and were operational, the debt could be re-financed at a lower interest rate than the one supporting the PFI repayments, and the company trousered the profit. The government spotted this and changed the negotiation rules to get a 50:50 share but the contractors and financiers just changed it to an equity re-finance and pocketed all the money another way.
After the works are completed, the outsourcing costs often mainly relate to cleaning and estate management. No one gives a shit about these people and although some efficiencies can be obtained, they are fair game for cuts so that the PFI repayments make a margin over budget.
PFI makes little sense to me and one of the justifications by the Treasury is that it transfers risk to the private sector and that the private sector is better equipped to manage the risk because it has an interest in not failing. Misses the point that ultimately the taxpayer has to stand behind the financial costs of ensuring the project is maintained if the company fails.
Just had a quick look at Carillion's 2016 accounts and their financial viability and track record in winning contracts is cited as a reason why clients use Carillion. If it's paying dividends and making a profit, albeit small, its unreasonable to think the public sector team would worry too much about financial viability if the market hadn't yet got information indicating imminent collapse. The weighting for financial viability will be an arbitrary subjective value set probably for all types of procurement and probably trumped by the mark for being awarded government contracts in the past.
Nothing in the Carillion accounts or the 3 year business plan would give an clue that collapse was imminent, it's the nature of how revenue is booked against projected costs on contracts, and the optimistic view of future contracts, that can disguise the real picture.
Self preservation of politicians, public sector departmental heads meeting arbitrary budgets means PFI contracts are the answer to their problem, they just shift the problem down the line and the private sector is happy to oblige.
I'm obviously not anti private sector, and if someone like Corbyn wasn't just ideologically against private sector involvement and thinking we should have 100% nationalisation, I am sure a better fairer system could be devised if the opposition had the right brains on the case. No chance the Tories would be allowed to put through anything radical.
The public sector failed in the past to design and build something that worked, was on budget and on time and wasn't run by the staff for their benefit. The key is finding a balance using the the private sector's ability to innovate and build to budget whilst preventing their commercial objectives taking advantage of the tax payer and workers. The first idea to be ditched justifying PFI is that public services can have "risks" transferred to the private sector.
I work for them. Terrible firm. Bullying treat staff with contempt Before the crash directors gave themselves protected bonuses and sold shares before they announced they were in trouble Roland would be very proud of them I hope the governors rot in hell
Endorse @Goonerhater on this. Not Carillion but I was privy to the negotiation process in several early PFI tenders where pension costs needed to be valued at an early stage. The real value to the company was in the finance deal. The banks would lend at a rate that reflected the risk of them not being repaid and the fact that the project had not commenced. When the building works had been completed and were operational, the debt could be re-financed at a lower interest rate than the one supporting the PFI repayments, and the company trousered the profit. The government spotted this and changed the negotiation rules to get a 50:50 share but the contractors and financiers just changed it to an equity re-finance and pocketed all the money another way.
After the works are completed, the outsourcing costs often mainly relate to cleaning and estate management. No one gives a shit about these people and although some efficiencies can be obtained, they are fair game for cuts so that the PFI repayments make a margin over budget.
PFI makes little sense to me and one of the justifications by the Treasury is that it transfers risk to the private sector and that the private sector is better equipped to manage the risk because it has an interest in not failing. Misses the point that ultimately the taxpayer has to stand behind the financial costs of ensuring the project is maintained if the company fails.
Just had a quick look at Carillion's 2016 accounts and their financial viability and track record in winning contracts is cited as a reason why clients use Carillion. If it's paying dividends and making a profit, albeit small, its unreasonable to think the public sector team would worry too much about financial viability if the market hadn't yet got information indicating imminent collapse. The weighting for financial viability will be an arbitrary subjective value set probably for all types of procurement and probably trumped by the mark for being awarded government contracts in the past.
Nothing in the Carillion accounts or the 3 year business plan would give an clue that collapse was imminent, it's the nature of how revenue is booked against projected costs on contracts, and the optimistic view of future contracts, that can disguise the real picture.
Self preservation of politicians, public sector departmental heads meeting arbitrary budgets means PFI contracts are the answer to their problem, they just shift the problem down the line and the private sector is happy to oblige.
I'm obviously not anti private sector, and if someone like Corbyn wasn't just ideologically against private sector involvement and thinking we should have 100% nationalisation, I am sure a better fairer system could be devised if the opposition had the right brains on the case. No chance the Tories would be allowed to put through anything radical.
The public sector failed in the past to design and build something that worked, was on budget and on time and wasn't run by the staff for their benefit. The key is finding a balance using the the private sector's ability to innovate and build to budget whilst preventing their commercial objectives taking advantage of the tax payer and workers. The first idea to be ditched justifying PFI is that public services can have "risks" transferred to the private sector.
Great post and couldn't agree more with what you're saying.
Institute of Directors have now made a statement as well. Roger Barker, Head of Corporate Governance, has commented on the lack of governance, with relaxation in the clawback conditions for executive pay in 2016 calling it (in retrospect) "highly inappropriate".
"It does no good to the reputation of UK business when top managers appear to benefit in spite of the collapse of the organisations that they are responsible for".
Calling for government to consider how it can better monitor the robustness of governance at key contractors.
@tonka Really hope that you get sorted out quickly...the above just sums up your comment...they look after themselves and couldn't give a toss about the thousands working for them and the impact they then have across all the businesses they use/owe/sub-contract to.
Endorse @Goonerhater on this. Not Carillion but I was privy to the negotiation process in several early PFI tenders where pension costs needed to be valued at an early stage. The real value to the company was in the finance deal. The banks would lend at a rate that reflected the risk of them not being repaid and the fact that the project had not commenced. When the building works had been completed and were operational, the debt could be re-financed at a lower interest rate than the one supporting the PFI repayments, and the company trousered the profit. The government spotted this and changed the negotiation rules to get a 50:50 share but the contractors and financiers just changed it to an equity re-finance and pocketed all the money another way.
After the works are completed, the outsourcing costs often mainly relate to cleaning and estate management. No one gives a shit about these people and although some efficiencies can be obtained, they are fair game for cuts so that the PFI repayments make a margin over budget.
PFI makes little sense to me and one of the justifications by the Treasury is that it transfers risk to the private sector and that the private sector is better equipped to manage the risk because it has an interest in not failing. Misses the point that ultimately the taxpayer has to stand behind the financial costs of ensuring the project is maintained if the company fails.
Just had a quick look at Carillion's 2016 accounts and their financial viability and track record in winning contracts is cited as a reason why clients use Carillion. If it's paying dividends and making a profit, albeit small, its unreasonable to think the public sector team would worry too much about financial viability if the market hadn't yet got information indicating imminent collapse. The weighting for financial viability will be an arbitrary subjective value set probably for all types of procurement and probably trumped by the mark for being awarded government contracts in the past.
Nothing in the Carillion accounts or the 3 year business plan would give an clue that collapse was imminent, it's the nature of how revenue is booked against projected costs on contracts, and the optimistic view of future contracts, that can disguise the real picture.
Self preservation of politicians, public sector departmental heads meeting arbitrary budgets means PFI contracts are the answer to their problem, they just shift the problem down the line and the private sector is happy to oblige.
I'm obviously not anti private sector, and if someone like Corbyn wasn't just ideologically against private sector involvement and thinking we should have 100% nationalisation, I am sure a better fairer system could be devised if the opposition had the right brains on the case. No chance the Tories would be allowed to put through anything radical.
The public sector failed in the past to design and build something that worked, was on budget and on time and wasn't run by the staff for their benefit. The key is finding a balance using the the private sector's ability to innovate and build to budget whilst preventing their commercial objectives taking advantage of the tax payer and workers. The first idea to be ditched justifying PFI is that public services can have "risks" transferred to the private sector.
Where's your evidence Corbyn is ideologically against private sector involvement in delivering public sector projects please? Was it not his policy to introduce a new national bank to invest in infrastructure projects delivered by the private sector then?
Apart from their £600m pension shortfall they owe £900,000,000 to various banks. What big contract were they waiting for to dig them out of that particular hole?
Whilst I'm a true blue Tory I do feel that certain services should be in the public sector (Transport, water, Gas etc) and PFI is certainly not the way to fund new hospitals, roads & major infrastructure.
Re the Pension scheme. New rules should be brought in that every year a company's pension fund is valued & the full costed amount is contributed by the employer before the accounts are singed off & any dividends are paid. Its atrocious how a company can pay out £80m in dividends when the pension fund is £550m in deficit.
Endorse @Goonerhater on this. Not Carillion but I was privy to the negotiation process in several early PFI tenders where pension costs needed to be valued at an early stage. The real value to the company was in the finance deal. The banks would lend at a rate that reflected the risk of them not being repaid and the fact that the project had not commenced. When the building works had been completed and were operational, the debt could be re-financed at a lower interest rate than the one supporting the PFI repayments, and the company trousered the profit. The government spotted this and changed the negotiation rules to get a 50:50 share but the contractors and financiers just changed it to an equity re-finance and pocketed all the money another way.
After the works are completed, the outsourcing costs often mainly relate to cleaning and estate management. No one gives a shit about these people and although some efficiencies can be obtained, they are fair game for cuts so that the PFI repayments make a margin over budget.
PFI makes little sense to me and one of the justifications by the Treasury is that it transfers risk to the private sector and that the private sector is better equipped to manage the risk because it has an interest in not failing. Misses the point that ultimately the taxpayer has to stand behind the financial costs of ensuring the project is maintained if the company fails.
Just had a quick look at Carillion's 2016 accounts and their financial viability and track record in winning contracts is cited as a reason why clients use Carillion. If it's paying dividends and making a profit, albeit small, its unreasonable to think the public sector team would worry too much about financial viability if the market hadn't yet got information indicating imminent collapse. The weighting for financial viability will be an arbitrary subjective value set probably for all types of procurement and probably trumped by the mark for being awarded government contracts in the past.
Nothing in the Carillion accounts or the 3 year business plan would give an clue that collapse was imminent, it's the nature of how revenue is booked against projected costs on contracts, and the optimistic view of future contracts, that can disguise the real picture.
Self preservation of politicians, public sector departmental heads meeting arbitrary budgets means PFI contracts are the answer to their problem, they just shift the problem down the line and the private sector is happy to oblige.
I'm obviously not anti private sector, and if someone like Corbyn wasn't just ideologically against private sector involvement and thinking we should have 100% nationalisation, I am sure a better fairer system could be devised if the opposition had the right brains on the case. No chance the Tories would be allowed to put through anything radical.
The public sector failed in the past to design and build something that worked, was on budget and on time and wasn't run by the staff for their benefit. The key is finding a balance using the the private sector's ability to innovate and build to budget whilst preventing their commercial objectives taking advantage of the tax payer and workers. The first idea to be ditched justifying PFI is that public services can have "risks" transferred to the private sector.
Where's your evidence Corbyn is ideologically against private sector involvement in delivering public sector projects please? Was it not his policy to introduce a new national bank to invest in infrastructure projects delivered by the private sector then?
Brilliant work in turning what is overwhelmingly a problem created by the Tories into Labour's responsibility btw.
His National Investment Bank proposal was nothing to do with public services. It was about lending to other banks to provide loans for SMEs, not-for-profit and mutual organisations. I didn't say Corbyn wanted to starve the private sector of investment, but dig me out anyway.
According to Corbyn the PFI mess was caused by Labour.
I'm loving this thread. It's a subject I know nothing about, and it's great to see (on the whole) posters with actual experience, from a range of backgrounds, all saying roughly the same thing. Makes you wonder how we got into this mess (can probably guess greed has something to do with it) and possible ways to get out of it. Just hope there is the political will to do something.
Comments
I have been part of the awarding process (Client) and setting SLAs ( Service Level agreements) and KPIs(key performance indicators) Thats with The British Library and the Tri Borough Out Source of Westminster City Council,Hammersmith and Kensington-Chelsea, to name just two of many contracts i was on.
At its best outsourcing workswell and allows company's/institutions etc to concentrate on their CORE business while their support services are under one umbrella. At its worst it gives a reduced service to its Client while just saving money.
Councils are all over outsourcing--- its a way of saving money while not cuting essential services. Thats both Labour and Tory run councils.
Having gone all the way through the process for Westminster CC i can say there is no way ANY political sway or nod to ANY bidder was or could have happened. Every meeting was recorded , every submission scored by a large group of people. All scores and bids could and were open after the award to all parties. A losing bidder can claim all their costs back plus a rebid if they can see anything Iffy. Lawyers were involved pre any meeting and after any scoring. Costs only scored 35% of the total points.
Carillion were one of the final 3 bidders and they were close to winning !
I have been in PCT where they didnt know how many buildings they should be looking after--- that their buildings (hospitals and surgerys) were "public" buildings and they were owed £500K plus that they hadnt charged "tenants"---- never to be reclaimed----- so lets not go down the route of "public is perfect" its fecking not.
The biggest problem with a free market economy is that the big get bigger like Carillion and they diversify into areas where they are far from experts---- if one section of their Empire falls over it brings the rest down with it.
EMCOR were being hit with a "fine" fine of £9000 a month because they couldnt hit the KPI target on ONE contract, great for the Client a public body--- it was proved to be impossible and removed after negotiation.
Another contract (BBC) had a £2500 excess with their Service Provider which meant any job up to the value of £2500 had to be done regardless of in or out of the contract--- horrific for the Service Provider ( Land Securities) they brought out of that contract and Johnson controls took it over (still has a £2000 excess)
PFI contracts are the pits of the outsourcing world--- great for the Service Provider but fecking awful for the Tax Payer and as for Corbyn saying he will cancel all PFI contracts ---- they are laughing at u you twat--- their are BILLIONs to pay if you cancel the contracts its why they are still there !!
No way should ANY of the Utilities been privatised. That goes for BR and The NHS, however with both BR and NHS there should be a place for out sourcing railway stations re food /cleaning and the NHS re cleaning, security,food.
Most offices all support services can be outsourced and probably already are.
I feel for the 20,000 workforce in the UK who this morning must be kaking it re the jobs.
How many joints ventures were they in? How many work for them indirectly?
Balfour have said this has cost them 40 million. On these jobs Balfour will be looking to others to carry the bill at some stage.
My last but one employer was a small IT outsourcing firm. They were bought by a large general outsourcer and the justification was that, as part of a larger company, they would be able to bid for a lot more contracts. At first, this worked well and they won a lot of new contracts, especially in South London. But none of them were resourced well and all have since been lost, with the risk of loss of knowledge as staff leave or are made redundant. When they lost the contract I'd worked on, of the 25 or so staff left on it, only 7 transferred over to the new provider and they lost all the network, admin and applications people.
A council having so save £30million sees it can save £3million per year going Total Facilities Management (complete outsourcing) with a Service Provider--- they go through the correct processes and at the end a company wins.
Its going to under take Maintenance/catering/vending/security/cleaning/post/printing/grounds maintenance.
1)They will undertake only statutory maintenance or business critical maintenance ( often called Run to Destruction --more latter)no engineers on site they will be "ambulant engineers" walking from another site nearby
2)Front of house cleaning as normal,office areas, back of house once a week, waste bins not daily but by request (more latter)
3)Catering , forget vegan etc more fast food and much more vending (hot and cold) and coin operated.
4) Security ,only static during office area and mobil at all other time (unless requested-- more later)
5)Grounds maintenance only in the summer and nothing unless requested.
6) Printing wont be done on site but at a near by "hub" and it will take longer.
The above will produce a saving against BUDGET ---this can be used when councillors or the mass media ask the question.
However what isnt shown is all the requests that fall out of the "norm"--- when Security is wanted most evenings for Council meeting---when requests to the Help Desk for offices to be cleaned are received--- when maintenance requests (daily) arnt statutory etc---- all are chargeable.
As for the Run to Destruction Maintenance --- no worries there the Service Provider will offer to replace interest free any of the major plant that fails ---but you sign a service agreement for that new equipment --- its a mini PFI !!!!
Anything deemed a "project" will be undertaken by the service provider and they will be hiting you with a 10/20% hit on that cost.
Of course it will show against a budget somewhere but not in the line of Contract Payment.
So the illusion is of them guaranteeing you a saving but knowing they will get their money other ways.
My contract at the British Library was £4 million we did £5 million of "projects" in one year !
Not surprised that one of these 'Tier 1' contractors have gone under and Carillions problems have been well known for a few years and once that happens, private clients won't go with them so it's possible that the public sector have tried to shore them up rather than letting them snowball into collapse. Like others have said on here, public sector procurement is very rigorous although misses the point really - big companies have the resources to be able to put bid docs together that say the right things to win the jobs on 'Quality' rather than 'Pricing' - It's all bullshit though as when they come to deliver, these huge, disjointed organisations are far too big to offer any real quality / personal service, and just assemble groups of strangers all over the country under a company name - at inflated prices.
I sat with a firm in the property sector this morning, who have just won two major contracts. The most pleasing aspect, for them, is that they were advised that their bids were nowhere near the cheapest and that the work was won on the quality of the work they had been doing elsewhere.
The old maxim of buy cheap, buy twice, springs to mind. You get what you pay for at the end of the day and it seems Carillion were trying to make money not on the contracts that they won, but on then trading those further down the line. Looks like a form of Ponzi to me.
After the works are completed, the outsourcing costs often mainly relate to cleaning and estate management. No one gives a shit about these people and although some efficiencies can be obtained, they are fair game for cuts so that the PFI repayments make a margin over budget.
PFI makes little sense to me and one of the justifications by the Treasury is that it transfers risk to the private sector and that the private sector is better equipped to manage the risk because it has an interest in not failing. Misses the point that ultimately the taxpayer has to stand behind the financial costs of ensuring the project is maintained if the company fails.
Just had a quick look at Carillion's 2016 accounts and their financial viability and track record in winning contracts is cited as a reason why clients use Carillion. If it's paying dividends and making a profit, albeit small, its unreasonable to think the public sector team would worry too much about financial viability if the market hadn't yet got information indicating imminent collapse. The weighting for financial viability will be an arbitrary subjective value set probably for all types of procurement and probably trumped by the mark for being awarded government contracts in the past.
Nothing in the Carillion accounts or the 3 year business plan would give an clue that collapse was imminent, it's the nature of how revenue is booked against projected costs on contracts, and the optimistic view of future contracts, that can disguise the real picture.
Self preservation of politicians, public sector departmental heads meeting arbitrary budgets means PFI contracts are the answer to their problem, they just shift the problem down the line and the private sector is happy to oblige.
I'm obviously not anti private sector, and if someone like Corbyn wasn't just ideologically against private sector involvement and thinking we should have 100% nationalisation, I am sure a better fairer system could be devised if the opposition had the right brains on the case. No chance the Tories would be allowed to put through anything radical.
The public sector failed in the past to design and build something that worked, was on budget and on time and wasn't run by the staff for their benefit. The key is finding a balance using the the private sector's ability to innovate and build to budget whilst preventing their commercial objectives taking advantage of the tax payer and workers. The first idea to be ditched justifying PFI is that public services can have "risks" transferred to the private sector.
Before the crash directors gave themselves protected bonuses and sold shares before they announced they were in trouble
Roland would be very proud of them
I hope the governors rot in hell
"It does no good to the reputation of UK business when top managers appear to benefit in spite of the collapse of the organisations that they are responsible for".
Calling for government to consider how it can better monitor the robustness of governance at key contractors.
@tonka Really hope that you get sorted out quickly...the above just sums up your comment...they look after themselves and couldn't give a toss about the thousands working for them and the impact they then have across all the businesses they use/owe/sub-contract to.
https://theguardian.com/business/2017/nov/11/labour-corbyn-cbi-conference-business-leaders
Brilliant work in turning what is overwhelmingly a problem created by the Tories into Labour's responsibility btw.
Re the Pension scheme. New rules should be brought in that every year a company's pension fund is valued & the full costed amount is contributed by the employer before the accounts are singed off & any dividends are paid. Its atrocious how a company can pay out £80m in dividends when the pension fund is £550m in deficit.
According to Corbyn the PFI mess was caused by Labour.
https://www.theguardian.com/commentisfree/2015/aug/26/pfi-labour-nhs-health-service-private-finance-initiative