Over the last 40 years, successive United Kingdom governments have expanded the role of the private sector in delivering public services.
One of the first sectors to be outsourced to private companies was facilities management – the cleaning, maintenance, and security of public buildings. With over 135,000 properties in the public estate, UK government procurement makes up around £13 billion of this £65 billion industry. Most of these contracts are awarded to larger companies and more and more go to global corporations. In 2018 companies who received more than £100 million in revenue from government business accounted for more than a fifth of all procurement spending, and this has likely increased over the last four years.
Outsourcing has many ramifications for those working in the sector and for the public who are affected not only by the quality of the service, but also the level of risk the government is taking on.
In 2018, the public saw the spectacular collapse of Carillion, the second-largest construction and services contractor in the UK holding 420 public contracts. Carillion left £7billion in debts, caused 3,000 job losses and left its public sector works in chaos. In the last few years, questions have been raised as to what lessons the government has learnt from Carillion’s collapse; there appears to be a continuity in the approach of prioritising the lowest bidder over other considerations such as the viability of the bid, quality of service, the pay and conditions of workers and the track record of these companies.
the majority of the larger companies involved in facilities management have broken UK law and almost all their parent companies have broken US law at some point.
The race to the bottom in bidding corresponds with a downward trend in wages and conditions. Many workers see their pay and conditions get worse each time their contract is transferred to a new employer. Over the last few years trade unions have been supporting cleaners, caterers, porters and security guards employed by facility management companies in their fight to be paid the same as their in-housed colleagues, with parity of holiday pay and sick leave. PCS members at the Department of Business, Energy and Industrial Strategy have recently resolved a pay dispute with Aramark, and suspended action with ISS over workplace safety protocols, having been largely successful in their 2019 strike action against these same companies. In March 2022, Unison won a campaign to in-source workers at five London hospitals. Since 2019 Mitie, Serco, Compass, and Sodexo, companies that hold some of the largest government contracts have all been embroiled in disputes with the workers transferred to them as part of these contracts.
And what about the track record of these companies? It might surprise people to know that companies found guilty of corporate lawbreaking continue to be awarded lucrative contracts by the UK government. This is where Violation Tracker comes in. Violation Tracker UK collates information on corporate infringements from 49 different government agencies. With more than 77,000 entries, this database proves an invaluable resource in tracking breaches of the law from fraud to labour standards violations. Civil servants and local governments responsible for awarding contracts simply need to type the name of the bidding company into Violation Tracker to see whether this company, or its parent company, have a record of corporate misconduct since 2010.
This information will be particularly of use to trade unions campaigning against the renewal of contracts with certain companies. Many will be aware of when contracts are up for renewal and can arm themselves with evidence of corporate infringements when making deputations to councils and NHS board members. When it comes to broader community and trade union campaigns to in-house services, the data reveals that the majority of the larger companies involved in facilities management have broken UK law and almost all their parent companies have broken US law at some point.
The largest operating in the UK, Mitie, whose facilities managements services were formerly owned by Interserve, is revealed by Violation Tracker UK to have committed the largest number of violations of UK law. Since 2012, Mitie has racked up 34 separate violations, mostly for Labour standards violations. Despite this, as well as damning reports into conditions in the detention centres that it runs, it was handed a £53 million contract to provide security services at hotels housing Afghan refugees in September this year.
US-based Allied Universal Security Services which owns G4S Facilities Management Ltd paid a penalty of £44,400,000 for fraud in 2020. In the US, Violation Tracker, which tracks US corporate regulatory infringements, reveals that Allied Universal Security Services are responsible for a whopping 202 violations, almost all of which were for employment-related offences.
Sodexo, whose facilities management operations had an average profit of £63.7 million in the UK between 2015 and 2020, also has a poor track record in the US. Since 2000 it has been fined an eye-watering total of $104,818,835. These fines were largely paid out for employment and safety related offences, violations it has then repeated in the UK in recent years. Securitas too has been found guilty of corporate lawbreaking in the US, with 67 separate violations of the same nature. Again, the company has been found guilty in the UK of the same offences. The same is true for Compass Group, CBRE and Emcor.
For PCS and Unison members campaigning against the renewal of government contracts with ISS, it may be useful to note that ISS Facility Services and ISS Mediclean combined have committed 18 violations, including 16 labour standards violations, and 2 workplace safety violations mostly within the last three years.
Violation Tracker UK will be doing all we can to expand the use of the database to ensure that local government, parliamentarians, trade unions, journalists, community groups and the public are kept informed of corporate infringements, to encourage better corporate behaviour and an end to incentives for companies who break the law.
By the way, Violation Tracker is now on Twitter. Follow us @VT__UK (note the two underscores!).