Government minister shaken by G4S security debacle
Filed under: News
Defence Secretary Philip Hammond has admitted the G4S disaster may see a reappraisal of traditional Tory scepticism towards the public sector.
Need to know: Savings
Can't rely on private sector"I came into the MoD," Hammond told the Independent, "with a prejudice that we have to look at the way the private sector does things to know how we should do things in Government," he said. "But the story of G4S and the military rescue is quite informative.
"I'm learning that the application of the lean commercial model does have relevance in areas of the MoD but, equally, you can't look at a warship and say, 'How can I bring a lean management model to this?' – because it's doing different things with different levels of resilience that are not generally required in the private sector."
Hammond could perhaps start celebrating the Olympic Games themselves which were, of course, a state-funded venture. So could this mean a slow-down in For Sale notices over state-owned enterprises and ventures?
Going out of fashion?The Privatisation Barometer, a project between KPMG and Fondazione Eni Enrico Mattei, a Milan-based research institute, claims that the speed of global privatisation has slowed dramatically with the number of completed deals halving in 2011 compared to 2010.
Tax expert Richard Murphy says, in his blog, this is a fact to be celebrated. "Services that need to be in the state sector because, as I argued in the Courageous State [his new book] they are natural monopolies that must be run for the public good, will now be staying in the state sector. Second, let's celebrate the fact that new private sector monopolies are not being created as a result of this change in behaviour."
But public services sector is still huge business (thought perhaps not the goldrush it was), witness the likes of Capita and Mouchel who have seen the value of contracts soar in the last decade.
For employees, it often means longer hours and a less generous pension, though salaries for execs at large organisations like Serco remain huge. Serco's chief exec, Chris Hyman, was paid £1.86m in 2010. Capita paid boss Paul Pindar was paid more than £901,000 in total in 2010/2011.
Meanwhile, Surrey police claims they have suspended involvement with private firms to take over key police functions. Is the tide turning?