Thursday, 9 September 2010

Connaught Collapse Challenges Coalition Privatisation Model

The collapse of private sector property company Connaught should set alarm bells ringing in the coalition Government but probably won’t. Their model for public services delivery through the private sector has taken a dent with the collapse of Connaught with debts of £220 million.

The firm provides property maintenance to social landlords and had attempted to take over the Glasgow Housing Association maintenance contract from Glasgow City Council arms length company, City Building, from just over a year ago. Their tender did not include pension costs for workers being transferred under TUPE and, following pressure from trade unions, the bid collapsed. Connaught’s attempt to undermine the terms and conditions of City Building workers had failed and those workers who would have been employed by Connaught will no doubt breathe a sigh of relief that union pressure protected not only their pensions but their jobs.

At this stage it appears that this failed model of delivering public services through outsourcing to private companies has led to the massive debt of £220 million accumulating, driving the company into administration and leaving workers and sub contractors with an uncertain future.

The coalition Government would do well to examine the Connaught experience and admit that private sector delivery of public services is not the universal panacea to rebalancing the economy they believe it to be.

Ian Tasker - STUC

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