It is right to be concerned about the collapse of Carillion, as it would be of any major employer and contractor to the Government. Of course we must do all we can to save jobs, and ensure delivery of the services for which they were responsible. Locally, everything from the management of Erlestoke Prison through to schools maintenance was in their hands, and the Government will do all it can to make sure that those services continue, and that local people employed by Carillion have as smooth a transition as possible to whoever it is who will be providing those services in the future. These things are always disturbing.
Yet there is also a lot of tosh being talked about it. HM Government had no responsibility for the management of Carillion, which it now transpires was sorely wanting. Their only role was as a major client, and perhaps they should have spotted some of those management failings to safeguard their own interests. But those who are alleging corruption, cover-ups, massive incompetence and the rest are trying to make political capital out of the worries and uncertainty of the people who are employed there. And those who are suggesting that the construction and management services provided by Carillion should instead be managed ‘in-house’- in other words run by civil servants and ministers – are in my view just plain wrong. There is little evidence that monolithic civil service led management would in any sense be better. Indeed it might well be worse since it would be the public purse bearing the risk under those circumstances.
Something of the same applies to the Private Finance Initiative deals, which were found to be uncompetitive in a National Audit Office Report last week. There were some terrible deals struck, especially under the Labour Government who saw PFI as an easy way to curry votes by providing buildings and services which would not otherwise be deliverable by the public sector. We here benefitted in Malmesbury, Abbeyfield and Royal Wootton Bassett academies, and in the brand new Great Western Hospital. It is hard to believe that any of them would have been built if they had been dependent upon public funds. The PFI structure enabled private finance and borrowing to be used to provide schools and hospitals, thereby relieving the Public Sector Borrowing Requirement. They were ‘off-balance sheet’ deals, which actually do have some merit if controlled properly.
The problem with PFI is that Ministers and the civil servants who advise them were so uncommercial and inexperienced that they agreed some terrible deals. The contractors were laughing all the way to the bank. But that should not undermine the perfectly sound principle which lay behind the deals - of seeking to get private funding into public services.
The Socialists always prefer nationalisation, state provision, in-house workforces and the like, which no doubt suits their own agendas. I remain firmly of the view that the profit-motive and private-sector business disciplines actually do a better job in providing high quality public services at an affordable price. So we must not let Carillion, nor the NAO Report lead to us blundering back to State Provision of almost everything. A glance at Socialist regimes around the world will demonstrate what a mistake that would be.