Just who is running our public services?
Labour & European Law Review Weekly Issue 233 01 September 2011
Ethical Consumer magazine has taken a look at the environmental and ethical track record of 20 of the biggest companies likely to benefit from the privatisation of public services. The results of their research makes disturbing reading.
The companies - Circle, A4e, BPP, BUPA, United Health, KMPG, McKinsey, Vodafone, IBM, Atos, HP, Balfour Beatty, Alliance Medical, Ferrovial, Veolia, G4S, ISS, Sodexo, Serco and Capita - scored badly on human rights with13 picking up the bottom rating in this category.
The research highlighted the companies running the government’s immigration removal centres - G4S, Serco and Sodexo - for particular concern. As well as being responsible for maintaining the UK’s nuclear weapons through a subsidiary, Serco (which last year had a turnover of £4 billion) has been criticised for conditions at the Colnbrook immigration removal centre. Government inspectors recently made 191 recommendations to change current practices after reports of poor conditions.
The one category in which 17 of the companies scored bottom rating was political activity. The magazine says it uncovered “an embedded corporate culture of widespread lobbying to gain access to Whitehall power-brokers, donations to political parties and a revolving-door policy of former government ministers heading straight into jobs with some of the companies surveyed”.
Then there is the issue of tax avoidance. Of of the companies surveyed, the Ethical Consumer research found that 13 have subsidiaries in countries considered to be tax havens.
The magazine says: “This implies that the companies concerned, including some of biggest names in the outsourcing industry such as BUPA, Capita and Sodexo, are managing their finances in such a way that they may be actively avoiding paying tax in the UK. Ironically, this June, Capita was awarded a £100 million contract by the Driver and Vehicle Licensing Agency to crackdown on vehicle tax and insurance evasion”. And the Tax Justice Network has found that global accountancy giant KPMG uses 47 out of 60 global tax havens.
In terms of private sector penetration of public services, the report says that Balfour Beatty, Ferrovial, ISS and Serco are already running construction and facilities management; G4S, Serco and Sodexo are in custodial services; KPMG, McKinsey and United Health are running health care commissiong; with Capital, Ferrovial and Serco in local education authority outsourcing.
To read more, go to the Ethical Consumer Magazine website.