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Business Comment

Outlook: Another procurement contract bungled by inexperienced mandarins


So, we taxpayers have been allegedly paying G4S and Serco to monitor dead crims. We should all look forward to hearing their well-paid lawyers defend the use of public money to ensure deceased wrong 'uns don't breach their bail conditions.

Serco managed to escape the worst of the headlines over this scandal because by agreeing to co-operate with the investigation it managed to avoid the long arm of the Serious Fraud Office. Clever work by Serco's PR department.

However, another report into Serco out yesterday, this time from the Public Accounts Committee (PAC), also went largely ignored: the scandalous way its out-of-hours GP service in Cornwall treated taxpayers and potentially left sick people alone and without care in the evenings. One in five calls were abandoned after patients gave up waiting. Only 52 per cent were answered inside a minute and a half. Dismal, dismal service.

But rather than hire more staff to pick up the phone to patients promptly and improve matters, Serco simply lied about its performance. Two employees falsified the data. That meant Serco hit its targets, was paid by taxpayers for its success, and the contract manager in charge pocketed a nice bonus.

When staff raised concerns about this racket, Serco failed to investigate properly, the PAC report says. Instead, it decided to turn the place upside-down to root out the whistleblowers, even going so far as searching employees' lockers. Little wonder that the PAC's chairman, Margaret Hodge, described Serco as having a "bullying and heavy-handed" culture.

To cynics like me of the motivations of private contractors on public-sector projects, so far, so unsurprising. The profit motive will always dominate for such service providers. Where we should be directing our anger is at the saps in the NHS who failed to spot that this was going on. If one in five calls made by distressed, sick people were going unanswered, how on earth did the local NHS not know about it?

Not only that, but when it did find out about the falsification of data, the primary care trust did not terminate the contract or even fine the company.

Even if Serco had not lied about its performance, it's extremely doubtful that the primary care trust could have compared its performance with other out-of-hours services elsewhere in the country, because there is hardly any data available.

Once again, we are left picking up the pieces, and the tab, from a state procurement contract that has been bungled by naive and inexperienced mandarins.

This was a fairly small contract, worth about £7m a year, but it matters deeply. Not only because of the suffering it caused ill patients and their relatives trying to get critical advice. Not only because it resulted in more people being transferred to the ambulance service, overburdening that already stretched part of the NHS. Not just because it highlighted the risk of dishonesty in outsourced contracts. But because the NHS is going to be using more and more private contractors to take on its day-to-day work in the future. It will be dealing with big, sophisticated players like Serco increasingly, and potentially getting rings run around it by clever negotiators on six-figure salaries.

If only this didn't sound all so familiar.