Tuesday, 7 September 2010

The Cautionary Tale of Connaught

There's two types of blog posts. There are the ones with a long gestation, a loose idea that time turns over in your head as it is whittled down to finely detailed perfection ready to present to cyberspace. These, for me at least, are rare. They are the type of blog posts I mean to write. Type two, the far more common type, are the type where a news story catches my eye during the day, not any news story, but one which inspires emotion within, maybe anger, maybe sadness, relief or even laughter. It instantly creates the urge to comment to just put something down on the page.

Today the story is about Connaught. Interestingly it crosses over with a post I've been meaning to write for months now, a post about the pros and cons of contracting out in the public sector.

My politics and past experience (school dinners in the early 90s) has led me to take a position of public-sector-good private- sector-bad. For me it was definitely a case of Crapita not Capita and my heart would sink a little everytime I saw the moniker 'working with' on a sweater, leaflet or side of a van. Even free entry to my local swimming baths last week didn't allay my narrow eyed cynicism that standards would plunge now the profit motive was introduced like a shark in the pool.

This is the crux of the issue. Our villain is the profit motive. Victorious in driving back the ethos of public service it eschews a logic of doing things only so far as they are profitable. This is why residential care is in such a mess. Standards cannot rise above the level at which profit ceases to be made.

Is this tough a too simplistic reading? Possibly it is true in some cases but, I find myself feeling increasingly sorry for private sector partners seeing them as victims. This is because in some areas the state drives a very hard bargain. Take residential care again, is the problem the private sector ownership of homes or is the problem of poor standards due to the local authorities who raise their funding for placements at below inflationary rates?

The attractiveness of a contract for a government department, or local authority is the ability to pass the buck. The contractor must decide what to cut when funding is squeezed and must also deal with the blame of any consequences from their cost-cutting. Connaughts demise also shows the risk prospective partners undergo. Government is a big player and now has a whole support industry which depends on it. Firms like Capita just did not exist a little over a decade ago but now generate large profits from public service contracting. Markets though shift and power with it, will government begin to assert its power in a not dissimilar was to a supermarket chain over a small producer, or will contractors find new strategies to fight back.

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