Interserve seeking a bailout

[motorbiking]

Perhaps we may see a shift away from outsourcing. Have you dealt with Indian outsourcers?

It’s already happening - Advances in machine learning, AI and chatbots means a lot of the mundane queries we used to have on the phone with an offshore agent can now be done online. At the moment it’s very much a hybrid model, but it won’t be long before the 1st line humans will be gone.

 

[JohnD]

and another...


https://www.ft.com/content/8257cb26-fdfb-11e8-aebf-99e208d3e521

"UK outsourcer Amey is expected to be sold to a private equity firm in the new year, in another sign of the pressures bearing down on the sector in Britain.

Ferrovial, the Spanish infrastructure group and part-owner of Heathrow airport, is in talks with PAI Partners and Greybull Capital, which presided over the collapse of Monarch Airlines last year, over a potential sale of the business, according to people close to the vendors. Ferrovial bought Amey in 2003 for £81m."

"Amey employs about 19,000 people in the UK, providing everything from maintenance for the Ministry of Defence, transport for prisoners for the Ministry of Justice, road and water pipe maintenance and private finance initiative projects for schools.

Profits in the UK were wiped out last year when it had to set aside £209m to cover potential losses on a road contract in Birmingham, where it is still in a legal dispute with the local authority."

 

[Ian H]

^^ I’m supposed to be going working for them under the United Utilities contract.

My place is looking like it’s teetering on the edge.

 

[motorbiking]

Amey, Jarvis Bechtel etc.. were all making big money on the PPP fiasco in the early naughties. The game was to low ball the infrastructure company, go open book (often a government procurement requirement) and then secure professional services from sister companies. That way the PPP co' looks like its running at a loss, but really half the opex costs are real profits. They do this for a few years and then fold the ppp co' handing the contract back to the public sector having creamed off a nice profit.

I don't think the govt should ever have allowed BAA Plc as it was to be sold to Ferrovial who are protected by Spanish law from take over due to their critical national infrastructure status.

 

[ellal]

I don't think the govt should ever have allowed BAA Plc as it was to be sold to Ferrovial who are protected by Spanish law from take over due to their critical national infrastructure status.

The UK is probably the most exposed in the developed world in this aspect.

Here's another example...

Linky

"An Army recruitment drive has faced "significant problems" - including a website that cost three times its budget and was 52 months late, a National Audit Office report has found.
Outsourcing giant Capita was awarded the £495m contract for Army recruitment in 2012 - but has failed to hit soldier recruitment targets every year since."

Given how many government systems they run, if Capita ever goes down we're really in the proverbial.
So they can get away with whatever they like, because it is always only public money that is being wasted/purloined!

 

[motorbiking]

Having been involved in government bids - while that seems like a lot of money, there will almost certainly be specific security needs, proper vetting to enhanced SC level if not higher, of all staff. A whole bunch of Service Level Requirements etc etc. Crapita will no doubt have been the cheapest bidder, but the cost might have been reduced (and I've no idea of the above), if the tender had been realistic about what they needed to buy, service wise. Outsourcing is fine as long as you retain your intellectual assets and knowhow. If you outsource your brain then expect to pay handsomely to hire a new one.

 

[ellal]

Outsourcing is fine as long as you retain your intellectual assets and knowhow. If you outsource your brain then expect to pay handsomely to hire a new one.

I rather like that last sentence. Sums it up perfectly!

Having dealt with local authorities on various issues, it is apparent that over the years there has been an almost total removal of expertise from public services.
Instead whenever the clueless ones who make the decisions need advice, they hire very expensive 'consultants' instead...

A local authority near us spent £60k to a recruitment agency to find a new Chief Exec because they couldn't work out what the job entailed, nor had the trained staff to draw up an employment contract! The agency simply 'negotiated' a transfer from another nearby authority involving relocation expenses/additional fees and a pay rise of 30%...
All that to 'save' public money

 

[SirGalahad]

It's ideological like the mantra of free markets espousing the works of Adam Smith and Ricardo when in fact they were saying free from economic rent not regulations.