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Listen, there’s nothing corrupt about it. At least there’s nothing provably corrupt about the way outsourcing contracts are handled. That’s because corruption is defined in narrow terms to nail the poor deluded fool who slips a £20 note inside the cover of their passport before handing it to the Border Force officer who is checking travel documents with a CCTV camera looking over her shoulder. There’s nothing corrupt about the government minister who announces new and impossible performance targets for a hitherto just-about-coping agency that manages transport infrastructure, drives it into a smoking hole in the ground, and three years later retires and joins the board of the corporation that subsequently took over responsibility for maintaining all the bridges on behalf of the state—for a tidy annual fee, of course. After all, the minister is a demonstrable expert on the ownership and management of bridges, and there’s no provable link between their having set up the agency for failure and their subsequently being granted a nonexecutive directorship that gets them their share of the rental income from the privatized bridge, is there?
All of this happens very discreetly. Air gaps, Chinese walls, and plausible deniability are baked into the process. But the general pattern is out in the open for those with eyes to see.
First, identify a department with an essential function or significant capital assets on the books. Second, define ambitious performance targets they can’t possibly meet with the resources available, hire a bunch of nonexec directors to “provide valuable insights from the private sector” to the board, and in case that’s not enough, cut the budget until they fail to perform. Third, the minister moves on and a new minister parachutes in, with lots of heroic rhetoric about radical change and accountability. Fourth, the nonexec directors leave, returning to their private sector posts with the large outsourcing company they originally came from, taking with them everything they’ve learned about how the agency is run. Fifthly and finally, the work is put out to public tender, and the usual outsourcing contractors, who now know how the agency works in intimate detail, make a – surprise! – winning bid. Finally, the usual suspects show up on the golf course a year or two later and buy trebles all around.
What greases the wheels is that the capital assets managed by the agency are transferred to the new owners, thus taking them off the government’s books, thereby thinning the property portfolio the Crown can borrow against. It looks good to get all that debt off the balance sheet. Meanwhile, tax revenue continues to roll in and some of it is now siphoned off to rent back the former government assets.
You might think, “That’s insanely inefficient!” and you would be right. But you’re not seeing it through the wonderful rose-tinted lenses of high finance. Viewed in the right light, a little sprinkle of free market pixie dust can turn the drabbest of public sector services into a rainbow-hued profit unicorn. (en) |
