Thursday 18 January 2018

Federation of Small Business states that outsourcing policy poses risk to nations economic stability

The following is a statement issued by The Federation of Small Business

Responding to the announcement of overdraft extensions, payment holidays and fee waivers from a number of banks for small firms impacted by Carillion’s collapse, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:
“The emergency measures put in place by banks for customers hit by Carillion’s collapse will provide some respite at a desperate time for hundreds of small firms. Many hundreds more are still yet to feel the knock-on impacts of the giant’s demise. It’s critical that they also receive support in the months ahead.
“We now need to establish a Carillion task force dedicated to helping all affected small firms and workers to recover and get back on their feet. Following Rover’s collapse in 2005, I was involved in a similar initiative where we successfully supported suppliers and found new opportunities for all of the firm’s apprentices.

This sorry saga has shown that the Government’s reliance on a small number of huge outsourcing firms poses a risk to the nation’s economic stability. As things stand, our procurement regime is stacked against small firms. Providing small businesses and the self-employed with more opportunities to secure public contracts will mean less risk and better return for the taxpayer. At the very least we need to see the reinstatement of the target date for achieving 33% of all public sector procurement with smaller businesses, to 2020.”  

Here in Barnet, we have seen the One Barnet outsourcing. Capita are Barnets partner of choice. A billion pounds worth of taxpayers money. Should Capita follow Carillion down the pan, we can only speculate what would happen. As the FSB quite correctly state, we have managed to get ourselves, as a nation, into a situation where a small number of firms more or less run the country. It turns out that rather than being super efficient, some are badly run and this has placed our economic wellbeing at risk. As a long standing opponent of the One Barnet scheme, it gives me no pleasure at all to see many of my fears about outsourcing being recognised.

It may surprise you to know that my biggest reason for opposition to One Barnet is a very classically Conservative argument. If you are a real Conservative, then you are risk averse and you only welcome change when there is a compelling reason. In the case of One Barnet, I thought this brought huge risk., purely for reasons of ideological dogma of a few hard right zealots who control the local Conservatives. They stated that there would be savings, although many of these have proven to be of the  smoke and mirrors type which clever accountants magic up. If you take a holistic view of the Borough, many jobs were exported as Capita moved functions out. Most political leaders try and bring jobs and employment to an area, not actively export it. Now my worries about the risk of the whole concept of outsourcing have been demonstrated so graphically by Carillion.

Sadly, local Conservative Councillors have not woken up and smelled the coffee. We have even seen one of them tweeting only last week about how marvellous outsourcing is

Quite bizzarely, the same Tory Councillor thinks that buying iPads is the same thing as outsourcing the running of council services and exporting jobs.

It is all rather bizarre. I do understand that Tory Councillors must be feeling rather uneasy, given the potential mess they have landed us in. What alarms me is that it is clear that there is no understanding of risk or operational resilience in the regime. If Councillor Rozenberg had been tweeting saying that Barnet have a robust resilience plan in place, should Capita get into financial difficulty, then I'd be reassurred. However, when he tweets idiotically naive rubbish about "we outsource the making of iPads" it is quite obvious that he's stuck his head in the sand.

I am a member of the Federation of Small Business. I need to understand balance sheets to run my business. I need to understand business risk. Carillion has shown the risks we are exposing our nation to. I fully agree with every word of the FSB statement. The organisation has hundreds of thousands of small business people as members. I would hazard a guess that most are not Momentum members. I would suggest that Tory Councillors like Councillor Rozenberg sit up and take note of what they say.  We really need to elect councillors who are not wedded to dogma and ideology and are primarliy interested in representing the people who live in Barnet and pay taxes. Outsourcing has lost Barnet jobs and increased the operational risk of Barnet Council to deliver its core services. I don't think that is clever politics.

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