London Review of Books
Carillion and Other Parasites
Lorna Finlayson 17 January 2018
Until very recently, most of us hadn’t heard of Carillion. Not having heard of a particular company wouldn’t usually be surprising or unsettling. But this is more like not having heard of the people who have been making alterations to your house, building your neighbour’s and – in an odd display of versatility – delivering lunches to your children. Because it turns out that Carillion is – or was, until its sudden but entirely predictable liquidation on Monday – pretty much everywhere. As a result, several projects, including the building of two hospitals, a high-speed railway and a bypass in Aberdeen, now hang in the balance, along with the jobs of around 20,000 UK workers.
A certain subterfuge was always a built-in feature of the ‘public-private partnerships’ (PPPs) and ‘private finance initiatives’ (PFIs) of which Tony Blair was so enthusiastic a pioneer. In classic Third Way fudgethink, these initiatives were presented not as all-out privatisation but as a ‘best of both worlds’ solution, a series of discreet injections of what a creaking public sector badly needed: the fabled private-sector virtue of ‘efficiency’, and hard cash (which would come out of the public purse sooner or later, but could be kept off the public balance sheet in the meantime). Companies such as Carillion are not like supermarket chains, loudly competing for customers. They snaffle up public-sector contracts on the quiet, and the public hears about it only when things go so badly wrong that the government can no longer mop up the mess.
In Carillion’s case, the government tried to save the struggling firm by awarding £2 billion worth of new contracts to it even as a series of profit warnings were issued. That didn’t work; and now we hear about it. At this point, however, why the government continued to award contracts to a high risk outfit may not be the first question to ask (the answer may or may not have anything to do with the fact that Carillion’s chairman is a prominent adviser to and supporter of the Conservative Party).
It may also be beside the point to focus on the various instances of Carillion’s unsavoury corporate behaviour, such as tweaking the rules to protect bosses’ bonuses, or blacklisting employees who raised concerns about safety. In so doing, we fail to question the principle of private-sector ‘delivery’ of public services, despite the abundant and mounting evidence – from the NHS to academy chains – that the relationship of these companies to their host institutions in the public sector is not symbiosis but parasitism, and that this is no accident but part of the essential nature of the profit-making beast.
Carillion and Other Parasites
Lorna Finlayson 17 January 2018
Until very recently, most of us hadn’t heard of Carillion. Not having heard of a particular company wouldn’t usually be surprising or unsettling. But this is more like not having heard of the people who have been making alterations to your house, building your neighbour’s and – in an odd display of versatility – delivering lunches to your children. Because it turns out that Carillion is – or was, until its sudden but entirely predictable liquidation on Monday – pretty much everywhere. As a result, several projects, including the building of two hospitals, a high-speed railway and a bypass in Aberdeen, now hang in the balance, along with the jobs of around 20,000 UK workers.
A certain subterfuge was always a built-in feature of the ‘public-private partnerships’ (PPPs) and ‘private finance initiatives’ (PFIs) of which Tony Blair was so enthusiastic a pioneer. In classic Third Way fudgethink, these initiatives were presented not as all-out privatisation but as a ‘best of both worlds’ solution, a series of discreet injections of what a creaking public sector badly needed: the fabled private-sector virtue of ‘efficiency’, and hard cash (which would come out of the public purse sooner or later, but could be kept off the public balance sheet in the meantime). Companies such as Carillion are not like supermarket chains, loudly competing for customers. They snaffle up public-sector contracts on the quiet, and the public hears about it only when things go so badly wrong that the government can no longer mop up the mess.
In Carillion’s case, the government tried to save the struggling firm by awarding £2 billion worth of new contracts to it even as a series of profit warnings were issued. That didn’t work; and now we hear about it. At this point, however, why the government continued to award contracts to a high risk outfit may not be the first question to ask (the answer may or may not have anything to do with the fact that Carillion’s chairman is a prominent adviser to and supporter of the Conservative Party).
It may also be beside the point to focus on the various instances of Carillion’s unsavoury corporate behaviour, such as tweaking the rules to protect bosses’ bonuses, or blacklisting employees who raised concerns about safety. In so doing, we fail to question the principle of private-sector ‘delivery’ of public services, despite the abundant and mounting evidence – from the NHS to academy chains – that the relationship of these companies to their host institutions in the public sector is not symbiosis but parasitism, and that this is no accident but part of the essential nature of the profit-making beast.
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