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Carillion collapse shows benefits of going in-house

Richard Watts says the lesson to take from the fate of Carillion is that the public sector should provide services

26 January, 2018 — By Richard Watts

Cllr Richard Watts

READERS will have been shocked by the dramatic collapse of the massive private construction firm Carillion. The first priority of the government in responding to this crisis should be to help protect the more than 20,000 Carillion employees in the UK, who are understand­ably extremely concerned about the future of their jobs.

Many small firms in the supply chain will also be affected by the collapse of this speculative business, including local firm K&M McLoughlin Decorating.

They must not lose out when the big banks are demanding payments from Carillion’s liquidators, as the impact on jobs will be even harsher if they are.

One way the government could immediately support thousands of Carillion employees would be to bring crucial public sector contracts which the company leads back under public sector control. This process of bringing contracts back in-house would protect jobs now and right the wrong of years of speculative government outsourcing.

Islington Council does not have any contracts with Carillion and has been at the forefront of moves to bring services and contracts back in-house and under local democratic accountability.

Since 2010, we have brought major services such as housing and waste collection back in-house, as well as others, including housing repairs, education, CCTV, cleaning services and caretakers.

Trade union Unison has recognised the work Islington has done in this area, using the return of cleaning services to the council as a case study in a report on the benefit of in-housing services.

At a time when the government is cutting the council’s core funding by 70 per cent in a decade, bringing services back in-house has also helped us to save money that can be used to protect frontline services.

For example, our decision to bring waste collection services back in-house has helped us to save around £3million a year, while not affecting the standard of service residents receive.

When the benefit to local people is clear, such as in the case of the many schools rebuilt in Islington under the Labour government’s Building Schools for the Future programme, we will of course not turn down such investment. But this government has failed to secure much public good from its deals with the private sector.

We think the council and public sector should be the default provider of services. This helps services to be better linked together to deliver results more quickly for local people.

In Islington, we have shown that the “private good, public bad” mantra, which has been the dogma of recent governments, isn’t true.

If there is one lesson that is taken from the Carillion collapse, it’s that we should back the public sector to provide the services and building projects people rely on.

I am proud that Islington has shown the success this approach brings. We will continue to argue for more councils to follow our lead.

But there is a wider point about how our economy currently works. Whatever happens with companies like Carillion, senior executives always seem to come up smelling of roses, whereas ordinary working people are left either without a job or worrying for their futures.

We need an economy that isn’t rigged against working people, and instead helps make our society fairer for all. That’s Labour’s mission, and it’s time this tired government let us get on with it.

Cllr Richard Watts is Labour leader of Islington Council.

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