One of Britain’s largest government contractors, Carillion, announced bankruptcy on Tuesday, leaving its 20,000 UK employees unsure of their future and causing layoffs at its subcontractor. The company was £1.5 billion in debt. Whoops!
The company is woven into basically every part of the public sector in Britain, from school meals and hospital cleaning to housing for the military. It provided services to half of Britain’s prisons. Often, they were very poor services; the independent monitoring board at one of the prisons Carillion staffed called conditions “squalid” and “inhumane” due to, for example, “blocked toilets, leaking sewage and broken facilities meaning prisoners regularly go without showers, clean clothes and hot food.” Other private contractors in the UK are hardly any better. One, Serco had to repay the government £68 million, after it charged them to monitor criminal offenders it wasn’t actually monitoring, including some who were dead. At the 2012 Olympics, another firm, G4S, had a $355 million contract to provide security but ended up being 3500 personnel short. The government had to call in the army to fill the shortage.
What happens when one company provides so many government services and then evaporates? Right now, firefighters are being put on standby to serve school meals because the company is in liquidation. 90 percent of private companies that have contracts with Carillion are continuing to pay its workers to carry on their projects, but there’s no telling how long that will last. British Prime Minister Theresa May—who has repeatedly described the UK government as a mere “customer” of Carillion—told the company’s employees working on public sector projects that “they should continue to turn up to work confident in the knowledge that they’ll be paid for the work they’re providing.” Banks have offered a fund to businesses to whom Carillion owes money, but the Federation of Small Businesses called it a “sticking plaster,” which is British for Band-aid. Suspending overdraft fees isn’t going to cover the likely millions owed to smaller businesses by Carillion. The effects will continue to unfold for months.
This is what happens when you outsource what should be government services, and particularly when you outsource so much to one company: you introduce the likelihood of a whole new kind of total fucking disaster, where the terrible, risky, profit-driven practices that characterize the private sector get mixed in with services that absolutely should not be subjected to that kind of risk, like schools and hospitals. Introducing a profit element to public services can only end in corner-cutting, under-providing and over-charging, and spending more than you would if the government just did it themselves. You end up with a ridiculous situation, where, for instance, Britain’s public health service, which is already underfunded, pays an £82 million settlement to a private company who sued because they didn’t win a contract.
In fact, he’s had the solution all along: Nationalize ‘em. Nationalize Carillion and the prisons and the banks, and you and your mum too.