After Carillion: The Struggle to Democratize Social Services
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- Published on Sunday, 29 November -0001 16:00
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A Socialist Project e-bulletin ... No. 1547 ... January 25, 2018
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After Carillion: The Struggle to Democratize Social Services
Colin Leys
Carillion’s failure has been compared to the collapse of Lehman Brothers in 2008, but what the Lehman case shows is that you can engage in behaviour that puts millions out of work, and destroys the hopes of a generation, and not pay any price, or significantly change your behaviour. Lehman was emphatically not a ‘watershed’: no one has paid a significant price for the greed, irresponsibility and criminal behaviour that was exposed when Lehman went bust. The challenge is to ensure that the Carillion moment will be different: that the ideology that has led to companies like Carillion fleecing the public and jeopardizing livelihoods finally gives way to a new common sense about how Britain... must be run.
The collapse of Lehman Brothers showed that financial capital was out of control and had gambled with the livelihoods of everyone in the world -- and lost. What has the collapse of Carillion shown? It has certainly shown up the dangers and fallacies of outsourcing, and of the use of private finance initiative (PFI) for public infrastructure: the unbelievable greed of today’s company directors, and their often almost equally unbelievable incompetence; the incapacity, or reluctance, of the government and other public bodies to enforce the fulfillment of contracts, especially when it will show how irresponsible the government was to entrust essential services to any private company; the conflict of interest of corporate auditors, and their consequent complicity in corporate wrongdoing; the fact that risk remains in reality with the public, even though a large element in the cost of contracts is to allow the private provider to insure against risk; and so on.
But these are not the issues we should be focusing on if Carillion is to become a watershed. They can be dealt with by piecemeal reforms. After Carillion no one -- perhaps not even Theresa May’s perilously weak government -- will be keen to propose new PFI infrastructure projects; and even defenders of public service outsourcing agree (perhaps belatedly) that it needs to be drastically curtailed: it should only be done, they now say, if "there is a market in the service [i.e. there are enough providers competing to provide it]; the difference between good and bad performance can be measured; and the service isn’t integral to the purpose and reputation of government."