watched the usual BS in the House of Commons (all sides) ---one snippet at the moment the "value" of PFI contracts is £60billion !!! sixty fecking billion !!! even if the political ideology was there we cant afford to buy them out -----they have huge penalty clauses inbuilt for early termination
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.
It's because we've seen what is on the horizon and even though I have always made a noise about how they are run, trying to stop them haemoraging money who listens to me? It certainly isn't any of my senior management, those pricks always know better yet spent most of 2017 apologising for things that they had overseen and behaved abhorrebtly towards people who had tried to put their hand up and stop some of the recent disasters. The amount of times I get called negative for just calling problems out and having foresight has ground me down.
Nothing will change though, as @Goonerhater says, there is £60 billion tied up, same as with the contractors working on Grenfell tower, who was quality checking and auditing them? Because it wasn't the fucking government, it was the very same people who were doing the work. Now they are hardly going to piss in their own bathwater are they but this moronic culture of subbing everything including, tragically, responsibility out means that those who hand these contracts out are not keeping any reigns or control over who they sub to. And they have a duty to do that. That's what is criminal, none if those at Carillion on the board or in senior positions will be negatively affected by this, give it a month this will all be forgotten by the mainstream, same as Grenfell has fallen off the front page and the vermin responsible will not have suffered any consequence to prevent others behaving in the same way.
The top brass at Intel sold all their shares recently - just before announcing the global problem with their chip. I think they are now in a world of shit. If directors at Carillion have been up to shit you’d like to think they’ll be getting clobbered soon.
The top brass at Intel sold all their shares recently - just before announcing the global problem with their chip. I think they are now in a world of shit. If directors at Carillion have been up to shit you’d like to think they’ll be getting clobbered soon.
Careful. I got pulled up for mentioning Intel earlier in the thread by @Addickted
Just heard on the news that the director who resigned last summer after the 1st profits warning is still getting paid £600k until this October. As there are thousands of employers & subbies not going to get paid next month I would stop his salary forthwith.
If he moans I'd tell him to take it up with the courts & join the rest of the creditors who are likely to get 10p in the pound sometime in the distant future.
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?
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.
they don't have colchester garrison - one of the largest and don't do any work at the mod hq in whitehall - the only 2 i know about but anyway, don't want to get into an argument - i'll leave that to the takeover stuff and related gubbins - arguing about army bases feels like when u take a wrong turn and end up in somebody else's traffic jam
From what I gather, Carillion are also involved in the running of certain police properties; as far as I know, via both facilities management and front-of-house duties. Which is great, what with police stations closing down and being sold off - leaving the forces with fewer assets, and tied in to deals with contractors who may end up insolvent due to their questionable business practices.
I see someone else has mentioned the potential knock on effects that this situation could hit the likes of Serco. Should something like this happen to Serco (or, say G4S - as unlikely as that may be) where on earth would that leave our prison system?
"However, the government will provide funding to maintain the public services run by Carillion..."
"Some of Carillion's contracts will be taken on by other firms and some could be renationalised..."
What a great use of public money this whole privatisation of our public services is eh? From this lot going bust (and others in the same game like Mouchel doing the same) to the G4S Olympic security fiasco, and running down our prisons to earn excessive profits outside those contractually agreed, or them and Serco ripping off the taxpayer with wholesale fraudulent claims for putting tags on dead prisoners(!) to the complete mess that is our transport network and the creeping privatisation of the NHS.
How many billions have governments wasted over the years following this dogmatic approach that private sector ownership and management is always preferable to providing properly resourced publically ran services! It's not going to be practical in every case but it's about time we had a grown up conversation, one where no one gets branded a Marxist, about taking some of these services back into public ownership.
More than a conversation needs to happen mate, problem is things are too far gone, too many people have been TUPE'd too many shareholders expect profits from a fucking prison, ever tried getting toothpaste back into the tube?
This is the sheer insanity of these types of ventures. Shareholders demand growth and increased profits year on year from shit scared moronic directors and usually the only way to achieve it in certain "businesses" after a point is to stagnate wages and cut, cut, cut.
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.
The problem was only created by the Torres if you reclassify Brown and Blair as Tories.
PFI may have been first used under a Tory government but the vast expansion particularly into the NHS happened under Blair/Brown.
I agree with Dippenhall, the main issue with PFI is that the fundamental risk is not transferred off the UK plc balance sheet, but any costs savings and profits almost certainly are and in most cases, any benefits from running the service in a corporate rather than ‘less focussed’ nationalised basis are dwarfed by the increased overall cost of borrowing (PFI v government bond rates) and funding shareholder profits and executive pay through add ons to the basic contract as described by goonerhater.
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.
The problem was only created by the Torres if you reclassify Brown and Blair as Tories.
PFI may have been first used under a Tory government but the vast expansion particularly into the NHS happened under Blair/Brown.
I agree with Dippenhall, the main issue with PFI is that the fundamental risk is not transferred off the UK plc balance sheet, but any costs savings and profits almost certainly are and in most cases, any benefits from running the service in a corporate rather than ‘less focussed’ nationalised basis are dwarfed by the increased overall cost of borrowing (PFI v government bond rates) and funding shareholder profits and executive pay through add ons to the basic contract as described by goonerhater.
But the "problem" under discussion is not PFI, it's the contracting out and privatisation of public services to firms like Carillion, G4S, Serco, Capita, etc.
I agree absolutely PFI is a millstone around the neck of the government/public sector and I agree Labour went too far with them. But I also understand why, in that they needed to reinvest in our public services and infrastructure when they entered power. Yet at the same time be seen to be friendly to towards the City and financially 'prudent', insofar as not going out to the markets and just borrowing the money.
To do that would have played right into the hands of the Tories and their friends at the Daily Mail, etc. It's precisely the sort of "Labour's anti-business" attitude that Dippenhall is still displaying in his previous post about Corbyn they were trying to tackle. So they chose to kick the can down the road instead and yes, we are paying for it now.
None of this is the reason why Carillion have gone under though.
The problem with councils outsourcing (whatever colour they are) is whilst they save money, in many cases they don't analyse whether the work they are outsourcing is being done properly or in some cases even at all. So whilst it looks good on the balance sheet, it inevitably has consequences.
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
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.
The problem was only created by the Torres if you reclassify Brown and Blair as Tories.
PFI may have been first used under a Tory government but the vast expansion particularly into the NHS happened under Blair/Brown.
I agree with Dippenhall, the main issue with PFI is that the fundamental risk is not transferred off the UK plc balance sheet, but any costs savings and profits almost certainly are and in most cases, any benefits from running the service in a corporate rather than ‘less focussed’ nationalised basis are dwarfed by the increased overall cost of borrowing (PFI v government bond rates) and funding shareholder profits and executive pay through add ons to the basic contract as described by goonerhater.
The reasonably famous Margaret Thatcher quote, when asked about her greatest achievement: "Tony Blair and New Labour. We forced our opponents to change their minds."
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
I agree, mate. The concept of these outsourcing companies really bug me. It stands to reason that when you're spending cash on a company to come in - and do exactly what you'd have to do - but you expect them to do it cheaper.. well, somethings not going to be done properly is it?
As far as I'm concerned, the main issues aren't that the work is outsourced really - it's who it's outsourced too. Bring in specialists for the job at hand, not some jack-of-all-trades outsourcing company. Hire a decent project team, and directly recruit/sub-contract yourself: get better oversight, better visibility, better accountability, and cut out the middle-man creaming off the profit.
But nah..
- MoD bought in Capita for military recruitment: end result - it's a bit f*cked.
- MoJ bought in Serco (and G4S) for running private prisons: end result - those prisons seem a bit f*cked.
- Gov bought in G4S to help secure the Olympics (to be fair, security is a core specialty of G4S): end result - the Army had to step in, as G4S f*cked it up.
- Carillion have been running around with £100,000,000s of Government Contracts: end result - multiple projects have been f*cked, suppliers have been f*cked.. and that's before they even collapsed under the £1.5 BILLION of debt.
Carillion takes the absolute piss though: they're still being discussed as a "construction company", but they were seemingly do everything from cleaning, to running help desks in police stations. How does a construction firm even get contracts for that stuff? Bring in companies who specialise ffs.
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
I agree, mate. The concept of these outsourcing companies really bug me. It stands to reason that when you're spending cash on a company to come in - and do exactly what you'd have to do - but you expect them to do it cheaper.. well, somethings not going to be done properly is it?
As far as I'm concerned, the main issues aren't that the work is outsourced really - it's who it's outsourced too. Bring in specialists for the job at hand, not some jack-of-all-trades outsourcing company. Hire a decent project team, and directly recruit/sub-contract yourself: get better oversight, better visibility, better accountability, and cut out the middle-man creaming off the profit.
But nah..
- MoD bought in Capita for military recruitment: end result - it's a bit f*cked.
- MoJ bought in Serco (and G4S) for running private prisons: end result - those prisons seem a bit f*cked.
- Gov bought in G4S to help secure the Olympics (to be fair, security is a core specialty of G4S): end result - the Army had to step in, as G4S f*cked it up.
- Carillion have been running around with £100,000,000s of Government Contracts: end result - multiple projects have been f*cked, suppliers have been f*cked.. and that's before they even collapsed under the £1.5 BILLION of debt.
Carillion takes the absolute piss though: they're still being discussed as a "construction company", but they were seemingly do everything from cleaning, to running help desks in police stations. How does a construction firm even get contracts for that stuff? Bring in companies who specialise ffs.
What you do get is create conditions where a small number of people can make a lot of money that should be spent elswhere. It is ridiculous, but if you protested this in the past, you are accused of not being entrepreneurial and get reminded of the issues of the 1970s - which were real. What is needed of course, are lessons to be learned and create efficient public services - which to be honest shouldn't be that hard to do. The rail companies and utility companies are examples how private ownership doesn't work.
Not sure how despite all of this the former CEO of Carillion is still getting £55k a month!!!!! This highlights the problem.
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.
Likewise. Goonerhaters post about how what appears to be a good deal for the council/government turns into a cash cow for the supplier is a real eyeopener, and not for the normal reasons my eyes widen at GH's posts
Greed is one reason, the other is a total lack of morals. Anything, and I mean anything, goes when it comes to the pursuit of money. The people involved simply have no moral compass - the same way folk in the public sector were happy to toss it off in the 70s sleeping in the van while getting paid (some still do according to an earlier post) - these people are happy to milk the public. It's a very similar situation, but on a far grander scale. When Charlie used to tell his mates in the pub about the £50 a week he was getting for nothing, they would say "Good on yer Charlie". Now Tarquin tells his mates in the champagne bar about the extra £50'000 a month he is getting for nothing and they say "Jolly well done Tarquin". The major difference is that people like Tarquin often evade and avoid paying their taxes on the income as well.
Like Dippenhall, I'm blaming the whole sorry mess on the bloke that has been leader of the opposition for two years...
Accountability...there's the word I was searching for. It's all about passing the risk (and the responsibility) to others, whilst creaming the reward. yet there's no accountability. If a lot of these services/utilities were nationalised, would there be more accountability? I mean, you can vote in a new government I suppose. Also, I'd suggest that the pressure from the public would be to get the job right, which is different from the pressure of shareholder which is to make more money.
The only that makes me hold off from saying we should renationalise the lot is that the public sector are just as likely to fuck it up. Any government could just tighten the belt and cause a drop in service (see, for example, the NHS). But, we can at least vote for a different government.
Accountability...there's the word I was searching for. It's all about passing the risk (and the responsibility) to others, whilst creaming the reward. yet there's no accountability. If a lot of these services/utilities were nationalised, would there be more accountability? I mean, you can vote in a new government I suppose. Also, I'd suggest that the pressure from the public would be to get the job right, which is different from the pressure of shareholder which is to make more money.
The only that makes me hold off from saying we should renationalise the lot is that the public sector are just as likely to fuck it up. Any government could just tighten the belt and cause a drop in service (see, for example, the NHS). But, we can at least vote for a different government.
Agreed - it needs a shift in public opinion akin to that of drink driving. It can be done, but there is no will from the people in the position to do it, as they are mostly on the gravy train too. And when the man in the street is so entrenched in his ideas that he is prepared to lay the blame on someone who has been in a position of (not much) power for two years for a problem forty years in the making, then change isn't likely to happen...
Accountability...there's the word I was searching for. It's all about passing the risk (and the responsibility) to others, whilst creaming the reward. yet there's no accountability. If a lot of these services/utilities were nationalised, would there be more accountability? I mean, you can vote in a new government I suppose. Also, I'd suggest that the pressure from the public would be to get the job right, which is different from the pressure of shareholder which is to make more money.
The only that makes me hold off from saying we should renationalise the lot is that the public sector are just as likely to fuck it up. Any government could just tighten the belt and cause a drop in service (see, for example, the NHS). But, we can at least vote for a different government.
Accountability is exactly the right word
I hear you about asking the question whether or not things would be better if they were nationalised and I also get the question about people sleeping in vans back in the day. Let's clear those two up and see my take
If someone, an elected member of parliament, is made accountable for performance of something like infrastructure projects, and the project is question is HS2 and the people carrying it out are directly employed by HM government (same cost, just more visible and at source) and that project starts to fail. There is a visible person who can take people to task and also be held to account. For good and bad. Firms that keep stuff in house have that grip and accountability as far as compliance goes as there are less links in the chain of responsibility. Let's not forget, the further down things get subbed the less money there is. Everyone wants a margin.
The second one, these days nobody can get away with behaving like it's the 1970s, in my job 20 years ago I have No doubt I could have absolutely had it away, done the bare minimum and not been found out. Nowadays my every movement both on line and physically, is tracked and I have to justify my time and the time it takes me to carry any task out. No way can I hide.
This just wasnt the case until probably the last decade maybe a bit more when company vehicles had trackers as standard and generally we don't get jobs down a fax machine, we get them electronically
Feel sorry for the staff (although hopefully most will remain employed as the 'work' still needs to be done) and for the small businesses further down the chain who now won't be getting their bills paid.
Not sure I know the answer, many more qualified have already posted above. The little outsourcing I have personally been involved in at work (IT and household goods) has generally worked OK and done what's it's meant to do but in regard to superior service and to costs savings. My experience as a school governor though was in stark contrast where it very much didn't work (aside from the cleaning contract) for the school/council but very much did for the councils estate management employee's and the builders on the 'approved list'......
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.
It's because we've seen what is on the horizon and even though I have always made a noise about how they are run, trying to stop them haemoraging money who listens to me? It certainly isn't any of my senior management, those pricks always know better yet spent most of 2017 apologising for things that they had overseen and behaved abhorrebtly towards people who had tried to put their hand up and stop some of the recent disasters. The amount of times I get called negative for just calling problems out and having foresight has ground me down.
Nothing will change though, as @Goonerhater says, there is £60 billion tied up, same as with the contractors working on Grenfell tower, who was quality checking and auditing them? Because it wasn't the fucking government, it was the very same people who were doing the work. Now they are hardly going to piss in their own bathwater are they but this moronic culture of subbing everything including, tragically, responsibility out means that those who hand these contracts out are not keeping any reigns or control over who they sub to. And they have a duty to do that. That's what is criminal, none if those at Carillion on the board or in senior positions will be negatively affected by this, give it a month this will all be forgotten by the mainstream, same as Grenfell has fallen off the front page and the vermin responsible will not have suffered any consequence to prevent others behaving in the same way.
Same for me from a Public Sector perspective, my career has suffered as a result. Agree with everything you have said and that is looking from a different side.
I would add that I have made bids for (small fry) contracts where I know we would lose because we were honest about costs and I know that the tenders have been awarded where it would be impossible to deliver at the winning cost in relation to outcomes.
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.
Likewise. Goonerhaters post about how what appears to be a good deal for the council/government turns into a cash cow for the supplier is a real eyeopener, and not for the normal reasons my eyes widen at GH's posts
Greed is one reason, the other is a total lack of morals. Anything, and I mean anything, goes when it comes to the pursuit of money. The people involved simply have no moral compass - the same way folk in the public sector were happy to toss it off in the 70s sleeping in the van while getting paid (some still do according to an earlier post) - these people are happy to milk the public. It's a very similar situation, but on a far grander scale. When Charlie used to tell his mates in the pub about the £50 a week he was getting for nothing, they would say "Good on yer Charlie". Now Tarquin tells his mates in the champagne bar about the extra £50'000 a month he is getting for nothing and they say "Jolly well done Tarquin". The major difference is that people like Tarquin often evade and avoid paying their taxes on the income as well.
Like Dippenhall, I'm blaming the whole sorry mess on the bloke that has been leader of the opposition for two years...
I think I have disagreed with everything else that @Dippenhall has ever written but feel I must defend him on this. His dig at Corbyn was slight and even possibly a back handed compliment as he felt the Tories could never sort it out but Corbyn could if he wasn't averse to the private sector.
That is the first glimmer of criticism I have seen from him of the Tories and the first slightly fainter glimmer of praise for the opposition so small mercies and all.
But apart from that I completely agree with what both @Dippenhall and @Goonerhater are saying, which is something I and I suspect they would never have thought possible on a non-football thread. It shows why I love this site, you can learn so much from anothers perspective and experience.
It also shows how shit the whole process is when it can unite the site in a way that I thought was only possible in our opposition to RD.
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.
Likewise. Goonerhaters post about how what appears to be a good deal for the council/government turns into a cash cow for the supplier is a real eyeopener, and not for the normal reasons my eyes widen at GH's posts
Greed is one reason, the other is a total lack of morals. Anything, and I mean anything, goes when it comes to the pursuit of money. The people involved simply have no moral compass - the same way folk in the public sector were happy to toss it off in the 70s sleeping in the van while getting paid (some still do according to an earlier post) - these people are happy to milk the public. It's a very similar situation, but on a far grander scale. When Charlie used to tell his mates in the pub about the £50 a week he was getting for nothing, they would say "Good on yer Charlie". Now Tarquin tells his mates in the champagne bar about the extra £50'000 a month he is getting for nothing and they say "Jolly well done Tarquin". The major difference is that people like Tarquin often evade and avoid paying their taxes on the income as well.
Like Dippenhall, I'm blaming the whole sorry mess on the bloke that has been leader of the opposition for two years...
I think I have disagreed with everything else that @Dippenhall has ever written but feel I must defend him on this. His dig at Corbyn was slight and even possibly a back handed compliment as he felt the Tories could never sort it out but Corbyn could if he wasn't averse to the private sector.
That is the first glimmer of criticism I have seen from him of the Tories and the first slightly fainter glimmer of praise for the opposition so small mercies and all.
But apart from that I completely agree with what both @Dippenhall and @Goonerhater are saying, which is something I and I suspect they would never have thought possible on a non-football thread. It shows why I love this site, you can learn so much from anothers perspective and experience.
It also shows how shit the whole process is when it can unite the site in a way that I thought was only possible in our opposition to RD.
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.
Likewise. Goonerhaters post about how what appears to be a good deal for the council/government turns into a cash cow for the supplier is a real eyeopener, and not for the normal reasons my eyes widen at GH's posts
Greed is one reason, the other is a total lack of morals. Anything, and I mean anything, goes when it comes to the pursuit of money. The people involved simply have no moral compass - the same way folk in the public sector were happy to toss it off in the 70s sleeping in the van while getting paid (some still do according to an earlier post) - these people are happy to milk the public. It's a very similar situation, but on a far grander scale. When Charlie used to tell his mates in the pub about the £50 a week he was getting for nothing, they would say "Good on yer Charlie". Now Tarquin tells his mates in the champagne bar about the extra £50'000 a month he is getting for nothing and they say "Jolly well done Tarquin". The major difference is that people like Tarquin often evade and avoid paying their taxes on the income as well.
Like Dippenhall, I'm blaming the whole sorry mess on the bloke that has been leader of the opposition for two years...
I think I have disagreed with everything else that @Dippenhall has ever written but feel I must defend him on this. His dig at Corbyn was slight and even possibly a back handed compliment as he felt the Tories could never sort it out but Corbyn could if he wasn't averse to the private sector.
That is the first glimmer of criticism I have seen from him of the Tories and the first slightly fainter glimmer of praise for the opposition so small mercies and all.
But apart from that I completely agree with what both @Dippenhall and @Goonerhater are saying, which is something I and I suspect they would never have thought possible on a non-football thread. It shows why I love this site, you can learn so much from anothers perspective and experience.
It also shows how shit the whole process is when it can unite the site in a way that I thought was only possible in our opposition to RD.
I don't disagree either, I just see his predictable dig at Corbyn as not so slight, and as slightly undermining his other very valid points CA.
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
Carillion takes the absolute piss though: they're still being discussed as a "construction company", but they were seemingly do everything from cleaning, to running help desks in police stations. How does a construction firm even get contracts for that stuff? Bring in companies who specialise ffs.
Carillion describes itself as an "integrated support services business". These companies are ex-construction companies who saw there was more money to be made if the finance risks and market risks in building a development was borne by the client instead of them. It was also cheaper to outsource the actual trade work to small firms than employ workers you had to pay pensions and expenses to. Originally, the directors were in the main tradesmen who had been promoted through the ranks and understood the business they were in. These people were gradually replaced by accountants and lawyers the great and the good on the plc director merry go round. The margins Carillion worked with were so thin, less than 3p profit on every £1 of revenue, that a very small overrun on costs wipes them out.
What until pensions comes under the spotlight. Most of the operational directors took transfer values to DC schemes over the last 18 months so will not be falling back on the Pension Protection Fund which caps the amount of pension protected at £35k. Even the HR Director baled out. As the fund was in deficit the transfer values were cut back, so why would anyone take a reduced transfer value instead of sticking around to draw the full benefits at retirement age, unless they thought sticking around was a poor option.
By the way @Algarveaddick if you read what i said rather than what you choose to read, I am saying that the solution isn't going to be formulated by Corbyn (read Momentum), nothing whatsoever about blame on Corbyn, he's done diddly squat. But hey, dig me out it's what you do.
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
Carillion takes the absolute piss though: they're still being discussed as a "construction company", but they were seemingly do everything from cleaning, to running help desks in police stations. How does a construction firm even get contracts for that stuff? Bring in companies who specialise ffs.
Carillion describes itself as an "integrated support services business". These companies are ex-construction companies who saw there was more money to be made if the finance risks and market risks in building a development was borne by the client instead of them. It was also cheaper to outsource the actual trade work to small firms than employ workers you had to pay pensions and expenses to. Originally, the directors were in the main tradesmen who had been promoted through the ranks and understood the business they were in. These people were gradually replaced by accountants and lawyers the great and the good on the plc director merry go round. The margins Carillion worked with were so thin, less than 3p profit on every £1 of revenue, that a very small overrun on costs wipes them out.
What until pensions comes under the spotlight. Most of the operational directors took transfer values to DC schemes over the last 18 months so will not be falling back on the Pension Protection Fund which caps the amount of pension protected at £35k. Even the HR Director baled out. As the fund was in deficit the transfer values were cut back, so why would anyone take a reduced transfer value instead of sticking around to draw the full benefits at retirement age, unless they thought sticking around was a poor option.
By the way @Algarveaddick if you read what i said rather than what you choose to read, I am saying that the solution isn't going to be formulated by Corbyn (read Momentum), nothing whatsoever about blame on Corbyn, he's done diddly squat. But hey, dig me out it's what you do.
Just read it again. I understand exactly you are implying.
The whole 'transfer of risk' idea is where huge amounts of money can be made and lost - completely unnecessary - need to get back to traditional contracting - let builders build, designers design and clients pay a fair price and not try and offload all risks all the time - whether private or public clients - Grenfell and a whole host of other issues are related to this in many ways - just a quick correction, didn't realise Amey were part of carillion, they do work at mod hq with skanska but no involvement at Colchester - Sodexo have that and can see them 'helping' fill the carillion hole
Regardless of how Grenfell was built it was still signed off by a BCO. If contractors didn't pass risk down god knows what I'll spend my day doing!
Have to say im stunned that PFI contracts are still being awarded. No reason for it but ideology. At the moment HM Gov could borrow at very low rate the money in order to build these hospitals /schools etc and then tender the service contracts. Instead they are awarding PFI contracts which the winning contractor uses its Capital to build the places and ties you into a 30 year service contract at top shilling !! Of course HM Gov use the old illusion re budget as the actual amount repaid per year shows up as a lower amount on the borrowing sheet because not only is it spread over decades but the payments and service payments will be in the NHS/ Schools budget lines.
Outsourcing can work well. IMO all schools should have their support services outsourced--they are a nightmare and i shudder when i have to do anything with schools re audits or compliance reviews.
The people monitoring these contracts have to understand what the feck they are looking at and what to do when it starts going wrong---but often its left to a junior manager. Rest assured the contractor KNOWS their contract.
Just herd that some of the sub contractors to Carillion were on 120 day payment on receipt of invoice !! what a piss take 60 days is taking the piss--- they will be on 30 payment for the base contract and 60 days for "additional" works.
Bring things back"in house" isnt the answer --thats just ideology. Outsourcing is a support and thats it a support
Comments
Nothing will change though, as @Goonerhater says, there is £60 billion tied up, same as with the contractors working on Grenfell tower, who was quality checking and auditing them? Because it wasn't the fucking government, it was the very same people who were doing the work. Now they are hardly going to piss in their own bathwater are they but this moronic culture of subbing everything including, tragically, responsibility out means that those who hand these contracts out are not keeping any reigns or control over who they sub to. And they have a duty to do that. That's what is criminal, none if those at Carillion on the board or in senior positions will be negatively affected by this, give it a month this will all be forgotten by the mainstream, same as Grenfell has fallen off the front page and the vermin responsible will not have suffered any consequence to prevent others behaving in the same way.
Crooked and corrupt company
The top brass at Intel sold all their shares recently - just before announcing the global problem with their chip. I think they are now in a world of shit.
If directors at Carillion have been up to shit you’d like to think they’ll be getting clobbered soon.
If he moans I'd tell him to take it up with the courts & join the rest of the creditors who are likely to get 10p in the pound sometime in the distant future.
I see someone else has mentioned the potential knock on effects that this situation could hit the likes of Serco. Should something like this happen to Serco (or, say G4S - as unlikely as that may be) where on earth would that leave our prison system?
On another note, I see that Leeds City Council are in a bit of a pickle - denying that they gave a £115,000,000 contract to Carillion as recent as last week. It appears as though they were in the final pre-contract stages though, which is equally as alarming.
Race to the bottom.
PFI may have been first used under a Tory government but the vast expansion particularly into the NHS happened under Blair/Brown.
I agree with Dippenhall, the main issue with PFI is that the fundamental risk is not transferred off the UK plc balance sheet, but any costs savings and profits almost certainly are and in most cases, any benefits from running the service in a corporate rather than ‘less focussed’ nationalised basis are dwarfed by the increased overall cost of borrowing (PFI v government bond rates) and funding shareholder profits and executive pay through add ons to the basic contract as described by goonerhater.
I agree absolutely PFI is a millstone around the neck of the government/public sector and I agree Labour went too far with them. But I also understand why, in that they needed to reinvest in our public services and infrastructure when they entered power. Yet at the same time be seen to be friendly to towards the City and financially 'prudent', insofar as not going out to the markets and just borrowing the money.
To do that would have played right into the hands of the Tories and their friends at the Daily Mail, etc. It's precisely the sort of "Labour's anti-business" attitude that Dippenhall is still displaying in his previous post about Corbyn they were trying to tackle. So they chose to kick the can down the road instead and yes, we are paying for it now.
None of this is the reason why Carillion have gone under though.
As far as I'm concerned, the main issues aren't that the work is outsourced really - it's who it's outsourced too. Bring in specialists for the job at hand, not some jack-of-all-trades outsourcing company. Hire a decent project team, and directly recruit/sub-contract yourself: get better oversight, better visibility, better accountability, and cut out the middle-man creaming off the profit.
But nah..
- MoD bought in Capita for military recruitment: end result - it's a bit f*cked.
- MoJ bought in Serco (and G4S) for running private prisons: end result - those prisons seem a bit f*cked.
- Gov bought in G4S to help secure the Olympics (to be fair, security is a core specialty of G4S): end result - the Army had to step in, as G4S f*cked it up.
- Carillion have been running around with £100,000,000s of Government Contracts: end result - multiple projects have been f*cked, suppliers have been f*cked.. and that's before they even collapsed under the £1.5 BILLION of debt.
Carillion takes the absolute piss though: they're still being discussed as a "construction company", but they were seemingly do everything from cleaning, to running help desks in police stations. How does a construction firm even get contracts for that stuff? Bring in companies who specialise ffs.
Not sure how despite all of this the former CEO of Carillion is still getting £55k a month!!!!! This highlights the problem.
Greed is one reason, the other is a total lack of morals. Anything, and I mean anything, goes when it comes to the pursuit of money. The people involved simply have no moral compass - the same way folk in the public sector were happy to toss it off in the 70s sleeping in the van while getting paid (some still do according to an earlier post) - these people are happy to milk the public. It's a very similar situation, but on a far grander scale. When Charlie used to tell his mates in the pub about the £50 a week he was getting for nothing, they would say "Good on yer Charlie". Now Tarquin tells his mates in the champagne bar about the extra £50'000 a month he is getting for nothing and they say "Jolly well done Tarquin". The major difference is that people like Tarquin often evade and avoid paying their taxes on the income as well.
Like Dippenhall, I'm blaming the whole sorry mess on the bloke that has been leader of the opposition for two years...
The only that makes me hold off from saying we should renationalise the lot is that the public sector are just as likely to fuck it up. Any government could just tighten the belt and cause a drop in service (see, for example, the NHS). But, we can at least vote for a different government.
I hear you about asking the question whether or not things would be better if they were nationalised and I also get the question about people sleeping in vans back in the day. Let's clear those two up and see my take
If someone, an elected member of parliament, is made accountable for performance of something like infrastructure projects, and the project is question is HS2 and the people carrying it out are directly employed by HM government (same cost, just more visible and at source) and that project starts to fail. There is a visible person who can take people to task and also be held to account. For good and bad. Firms that keep stuff in house have that grip and accountability as far as compliance goes as there are less links in the chain of responsibility. Let's not forget, the further down things get subbed the less money there is. Everyone wants a margin.
The second one, these days nobody can get away with behaving like it's the 1970s, in my job 20 years ago I have No doubt I could have absolutely had it away, done the bare minimum and not been found out. Nowadays my every movement both on line and physically, is tracked and I have to justify my time and the time it takes me to carry any task out. No way can I hide.
This just wasnt the case until probably the last decade maybe a bit more when company vehicles had trackers as standard and generally we don't get jobs down a fax machine, we get them electronically
Feel sorry for the staff (although hopefully most will remain employed as the 'work' still needs to be done) and for the small businesses further down the chain who now won't be getting their bills paid.
Not sure I know the answer, many more qualified have already posted above. The little outsourcing I have personally been involved in at work (IT and household goods) has generally worked OK and done what's it's meant to do but in regard to superior service and to costs savings. My experience as a school governor though was in stark contrast where it very much didn't work (aside from the cleaning contract) for the school/council but very much did for the councils estate management employee's and the builders on the 'approved list'......
I would add that I have made bids for (small fry) contracts where I know we would lose because we were honest about costs and I know that the tenders have been awarded where it would be impossible to deliver at the winning cost in relation to outcomes.
That is the first glimmer of criticism I have seen from him of the Tories and the first slightly fainter glimmer of praise for the opposition so small mercies and all.
But apart from that I completely agree with what both @Dippenhall and @Goonerhater are saying, which is something I and I suspect they would never have thought possible on a non-football thread. It shows why I love this site, you can learn so much from anothers perspective and experience.
It also shows how shit the whole process is when it can unite the site in a way that I thought was only possible in our opposition to RD.
What until pensions comes under the spotlight. Most of the operational directors took transfer values to DC schemes over the last 18 months so will not be falling back on the Pension Protection Fund which caps the amount of pension protected at £35k. Even the HR Director baled out. As the fund was in deficit the transfer values were cut back, so why would anyone take a reduced transfer value instead of sticking around to draw the full benefits at retirement age, unless they thought sticking around was a poor option.
By the way @Algarveaddick if you read what i said rather than what you choose to read, I am saying that the solution isn't going to be formulated by Corbyn (read Momentum), nothing whatsoever about blame on Corbyn, he's done diddly squat. But hey, dig me out it's what you do.
Outsourcing can work well. IMO all schools should have their support services outsourced--they are a nightmare and i shudder when i have to do anything with schools re audits or compliance reviews.
The people monitoring these contracts have to understand what the feck they are looking at and what to do when it starts going wrong---but often its left to a junior manager. Rest assured the contractor KNOWS their contract.
Just herd that some of the sub contractors to Carillion were on 120 day payment on receipt of invoice !! what a piss take 60 days is taking the piss--- they will be on 30 payment for the base contract and 60 days for "additional" works.
Bring things back"in house" isnt the answer --thats just ideology. Outsourcing is a support and thats it a support