Outsourcing

Ellen Clifford of DPAC Attacks DWP and the Renewed Contracts to Atos and Capita

Published by Anonymous (not verified) on Sun, 17/06/2018 - 7:21pm in

This is another short video from RT. It’s just over five minutes long, and is an interview with Ellen Clifford of Disabled People Against Cuts on the renewal of the contracts given to Atos and Capita to continue assessing disabled people’s benefit claims.

The interviewer states that the two outsourcing companies have been criticised for failing to meet targets and disabled people themselves through incorrectly assessing them as fit for work. 100,000 people have so far had the decisions against them overturned on appeal. The Labour and Liberal parties have called on the work to be taken back in house by the state.

The government, however, has released a statement, which runs as follows

The quality of assessment has risen year on year since 2015, but one person’s poor experience is one too many. We’re committed to continuously improving assessments, and have announced we’re piloting the video recording of PIP assessments with a view to rolling out this widely.

Clifford states that Capita and Atos have had their contracts extended only for two years, but that’s two years too long. They want this profiteering by the outsourcing companies to end. She also makes the point that one of the major complaints they hear about the assessments is dishonesty – or lies – by the company, and this is at such a rate that it cannot be coincidence. The current rate for decisions being overturned on appeal is 69 per cent. The interviewer asks if there is a chance that the process could be improved in the next two years. Clifford replies that over the past few years the government has announced that they’re changing and improving the scheme, but this is just tinkering around the edges. What is needed is a fundamental overhaul of the system, which is based on a model of disability that DPAC would not advocate. She hopes that the videoing of assessments will lead to more transparency, and DPAC will be watching this very carefully.

The interviewer also states that the majority of people are satisfied with the assessment process, and looking at the number of appeals against the positive cases, wonders if the issue isn’t being politicised. Clifford states that while the percentage of bad decisions may be small, they still affect millions of people, and so are statistically high. She says that anyone who works in the welfare sector or disability is inundated with cases from people, who have been turned down when they genuinely need that money. The interviewer asks her if she sees a glimmer of hope. She states that they see a government under pressure, experiencing market failure in this area. She states that DPAC also wants the assessments to be taken back in-house. They need to keep the pressure up. The assessments need to be taken back in-house and the whole system given a radical overhaul.

Everything Ellen Clifford says in this interview is exactly true. I’ve personally experienced Atos lying about my assessment and health, when they assessed me for incapacity benefit several years. And this was overturned on appeal. And when blogging about this issue, Mike and I, and many other left-wing bloggers, have received posts from commenters telling us how they were also wrongly assessed by the outsourcing companies to prevent them claiming benefits. Whistleblowers from inside the companies and DWP have come forward, stating that the government has set targets for the number of people, whose claims are to be rejected. I’ve reblogged a number of pieces, including videos about this. The fault lies with the DWP. And Kitty S. Jones has also described extensively on her blog how the DWP’s model of disability was produced by an American researcher working for Unum, one of the private medical insurance companies. They won the ear first of Peter Lilley, and then Blair and New Labour. The model assumes that people are malingering, and has been scientifically discredited. Nevertheless, this model is still used by the DWP.

The current system is a disgrace. It is, as Clifford states, all about throwing people off benefit. And despite its promises, all the so-called improvements introduced by the Tories are nothing but tinkering at the edges. When the Tories haven’t promised something more ominous. When they talked about cutting the rate of appeals, what they intended to do was not make the assessment process more honest, so that disabled people could claim benefit more easily, but actually making the conditions for being assessed as disabled more difficult, so that fewer people would be assessed as disabled, but could not successfully appeal against the decision because it followed the new, harsher conditions.

The whole process needs to be taken back in-house, and a radical overhaul done, with a view not to throwing disabled people off benefit, so that greedy multi-millionaires can enjoy another tax cut, but to make sure they genuinely have the welfare support and money they deserve and need.

Florence on the Sanctions System and its Architect, Yvette Cooper

A few days ago I posted up a piece about the death of Jody Whiting, another victim of the sanctions system. Whiting had been sanctioned because she missed a jobcentre interview. In fact, she was in hospital at the time, being treated for a cyst on the brain. In despair at having no money to support herself and her children, she went into a local wood and hanged herself. She joined hundreds of others, who have died of starvation or taken their own lives.

Florence, one of the great commenters on this blog, posted these observations on how the system contravenes UN human rights legislation, and is scathing about its architect, the Blairite Labour MP Yvette Cooper.

Under the UN Treaty on Human Rights it is illegal to use starvation as a punishment, I understand. Yet this is exactly what the sanctions are designed to do – it is stated in the DWP Handbook which state that sanctions will produce physical and mental “discomfort”.

(And while Yvette Cooper is being lauded for her “Windrush” success by the RW journalists and PLP (ignoring Diane Abbot, David Lammy and the others who have done all the work – racist much?) she was the one who designed the DWP system much as it is today, persecuting the people who need the Social Security safety net. Yes, the Tories have made it worse, but she gifted them this system of assessments and sanctions. Yet even after the UN report on the abuse of human rights by the DWP, she made election promises to be “harder than” IDS on the ‘scroungers and frauds’. I hope that she is not proposed again as a contender for the Labour Leadership, she is unfit on that very simple, human test.)

The sanction system has gone far beyond physical and mental discomfort, and is responsible for real suffering and death. Medical doctors and psychiatrists have reported how it has pushed patients into depression and anxiety, and made those, who already suffer from it worse. Much worse.

As for the media ignoring the attacks on the Windrush deportations by Diane Abbott, David Lammy and others to concentrate on Yvette Cooper, this does show racial bias. The right-wing media hate Diane Abbott and do everything they can to attack and humiliate her, because she is left-wing and passionately anti-racist. David Lammy, I believe, was one of those responsible for Operation Black Vote in the 1990s. This was to encourage more Black people to vote in elections, so their issues would be taken more seriously by politicians and there would be more BAME people elected to parliament. Which is certainly enough to bring down the rage of the Sun and the Mail. And I can remember how racist the right-wing press were in the 1980s, and their attacks on the Black MPs then elected to parliament, like Diane Abbott.

The media has also been constantly promoting and supporting the Blairites against Corbyn and the real Labour moderates. It’s because the Blairites are all Thatcherites, and share their hatred of nationalisation, workers’ rights and the welfare state. A little while ago when the Blairites looked like they were facing the threat of deselection, the Torygraphy/Mail journo, Simon Heffer wrote a piece claiming that they were ‘thoroughly decent people’ being bullied and undermined by the evil Fascist Trotskyite Marxists of Momentum. I’ve no doubt they’d like to promote her as the British version of Hillary Clinton, just as they were supporting all the female candidates against Corbyn in the Labour leadership elections. If one of them was elected head of the party, it would be a success for women. Despite the policies they stand for – more austerity, low pay, privatisation, including that of the NHS, and outsourcing harming women the most.

Cooper’s statement that a Labour government would be even harder than the Tories on the unemployed showed just how out of touch she was with the realities of life on the breadline. It also showed that whatever they were, the Blairites aren’t ‘thoroughly decent people’. They did everything they could to smear and undermine Corbyn and his supporters. Heffer and the right were claiming that Momentum is some kind of far left entryist group, and compared them to Militant when that group was intriguing against the right-wing members of the Labour party when Kinnock was leader. But Momentum represents traditional Labour politics and voters. The real intriguers, who have constantly been trying to rig everything in their favour, are the Blairites.

Cooper isn’t solely responsible for the sanctions system. As Jo, another of the great commenters on this blog said, the Tories didn’t need to pick it up. But they did, and massively expanded it. So there is now something like a quarter of million people, who can only get their food from food banks because of the deliberate poverty the Tories have inflicted through the system.

Cooper and the Blairites are a disgrace. They should either back the real Labour activists and supporters standing behind Corbyn, or else they should resign and go to a right-wing party, that better reflects their political beliefs.

The Anti-Semitism Allegations Show its the BDJ and Jewish Leadership Council Who Are Desperate, Not Corbyn

On Monday, Jeremy Corbyn attended a Passover seder with Jewdas, an organisation of religious, politically left-wing Jews. News of this was then leaked by Guido Fawkes, and the Jewish establishment of the Board of Deputies of British Jews and the Jewish Leadership Council went berserk, as did the Blairites in the Labour party.

One of the right-winger, John Woodcock, tweeted about how this showed that Corbyn was still being anti-Semitic. Woodcock’s a gentile, and so annoyed very many Jews by telling them what their religion was. Michael Rosen, the poet and, I believe, children’s poet laureate, put his feelings into verse challenging Woodcock to tell him what kind of Jew he should be. I can remember reading some of Mr. Rosen’s poetry when I was a kid, in the verse collection Rabbiting On. From what I can remember, it was largely light, entertaining stuff, which I think children need considering the immense pressure now being placed on them by the school and educational system. Other Jews also shared his opinions, and tweeted their views on Woodcock’s presumption. I can appreciate how they feel. When I was arguing apologetics with atheists, I wasn’t impressed when some of them were amazed that I believed in evolution and told me that I shouldn’t.

Then the Board of Deputies of British Jews decided to wade in, with their partners the Jewish Leadership Council. One of the Board’s leaders appeared on the BBC six O’clock news on Tuesday loftily declaring that Corbyn’s meeting with Jewdas showed how he was ignoring the concerns of mainstream Jews and did not take the allegations of anti-Semitism seriously. A spokesman for the Jewish Leadership Council also denounced Corbyn for attending the seder, and said it was a ‘two-fingered salute’ to mainstream Jews.

Jewdas, however, were very appreciative and praised the Labour leader for taking an interest in the Jewish community and seeking their views on the issues that mattered to it.

As the BDJ and Jewish Leadership Council know, Corbyn isn’t an anti-Semite, and whatever they say, the Labour party takes the allegations very seriously. That’s why tens of thousands of people were purged from the party, often just on the unsubstantiated allegations of them or related groups, like the woefullly misnamed Campaign Against Anti-Semitism. Arbush, the president of the the Board of Deputies is a true-blue Conservative, who hailed the election of Donald Trump and his Alt Right lackey, Steve Bannon. He’s in no position to moan about anti-Semitism to anybody, given Trump’s support for these Nazis. But the Jewish establishment likes him, because Trump is pro-Israel.

This is the real issue here. Corbyn isn’t anti-Israel, but he is pro-Palestinian, which to the pro-Israel lobby is the same thing. If he becomes prime minister, it will mean an end to the automatic deference given to Israel and complete lack of criticism for its continuing persecution and ethnic cleansing of its indigenous Arab population. The Board and Jewish Leadership Council know this. Hence their smears against Corbyn and his supporters as anti-Semites, even though they are no such thing. Indeed, many of them are decent self-respecting Jews and anti-racist gentiles, who have been abused and assaulted by racists and Fascists. These smears show just how desperate the Israel lobby is.

It seems to me that the Board and the Jewish Leadership Council represent the politically Conservative, neoliberal elite in the Jewish community. The same Conservative, neoliberal business elite which in the wider British community has done so much to wreck the economy and reduce ordinary working people, whether Jews, gentiles or whatever, to even greater extremes of poverty, all for corporate profit.

Corbyn is a left-winger, and it is natural that he should seek the views and company of those, who support him and his plans to undo nearly four decades of Thatcherism. They naturally include Jews, and as the messages of support for him show there are a large number of Jewish organisations and individuals, who do.

This is what worries the Board and the Jewish Leadership Council. They are becoming increasingly unable to present themselves as automatically representing British Jewry. And so they and the Blairites are trying to destabilise Corbyn’s leadership by making false, libellous accusations of anti-Semitism under the pretence that they do.

And even with these, they’re sounding increasing desperate. The Israel lobby has said that such smears are not being taken as seriously as they once were. In other words, ordinary people are waking up to the fact that these scoundrels aren’t concerned with anti-Semitism, only with using it as a weapon to defend Israel. And in America at least, Jewish young people are increasingly either indifferent to Israel, or actively hostile because of its maltreatment of the Palestinians.

Corbyn enjoys the support of a wide cross section of British society for his determination to bring the Thatcherite regime of benefit cuts, outsourcing and privatisation to an end. He is respected because of his decades-long stance against all forms of racism, including anti-Semitism. He’s a real threat to the Thatcherites, both in the Tories and the Blairites in Labour, as well as the Israel lobby.

But their shrill cries of outrage and smears show that it is they, who are desperate, aware that it is their power and influence that’s waning. And there’s absolutely no reason why Corbyn should listen to them. They’re Tories and Thatcherites to a man and woman, who have tried to unseat him and used the accusation of anti-Semitism to libel his supporters. He has every right to ignore them, no matter how they may try to pose as the representatives of mainstream Jews in this country.

Another Crisis in the Outsourcing Industry: Capita Now in Trouble

Yesterday, Mike reported on his blog that the outsourcing giant, Capita, was now in trouble. Its share price has apparently halved, knocking £1.1 billion of its stock market value. It has axed its scheme to issue £500 million in dividends to its shareholders. Instead, it intends to raise £700 million, partly by selling off parts of the company, which it needs to balance the books. There are also fears that it will make part of its 67,000 strong workforce redundant as well as concerns for the firm’s pension fund.

Mike in his article notes that the company was responsible for assessing the infamous fitness for work tests, for which the government has imposed hidden targets. One of these is that 80 per cent of reconsidered cases should be turned down. Mike therefore comments that if the crisis means that some of these assessors get a taste of what they inflicted on benefit claimants, this would be a case of poetic justice. He also wonders what the firm was doing when it devised the scheme to issue those massive dividends to its shareholders. Did they believe that the government’s magic money tree would continue to allow them to give heaps of money to their rich shareholders? He also asks other searching questions, such as whether it was deliberately underbidding to get government contracts, and then using the money to help finance those projects it had already won.

Mike concludes

So: First Carillion collapsed. Now both Interserve (remember them?) and Capita are in trouble.

Who’s next? And what will happen to public services while the Tories dither over this crisis?

See: https://voxpoliticalonline.com/2018/01/31/in-the-crap-ita-government-contractor-responsible-for-benefit-assessments-is-in-deep-financial-doo-doo/

Capita, or as Private Eye dubbed it, ‘Crapita’, has a long history of incompetence behind it. Way back in the 1990s it seemed that hardly a fortnight went by without Capita turning up in the pages of the satirical magazine. And the story was nearly always the same. The outsourcing company won a government or local authority contract to set up an IT system or run IT services. The project would then go over time and over budget, and would be massively flawed. And then a few weeks or months later, the company would be given a contract somewhere, and do exactly the same thing there.

You’re left wondering how Crapita kept winning those contracts, when it was so manifestly unfit to carry them out. Who did it have on its board? Or was there a deliberate policy by Major’s government to support outsourcing, no matter how inefficient and incompetent they were, because it was private enterprise and so preferred and supported for purely ideological reasons?

In any case, what seems to have placed the company in a very precarious financial situation is the usual tactics of big companies in this stage of capitalism: award massive dividends to the shareholders. This usually goes along with starving the rest of the company of investment, which seems to have been done to. And granting massive, and massively unsustainable pay awards to senior management. There’s no mention of that in Mike’s article, but I don’t doubt that this was done too. I’ve got the impression that it’s just about standard practice across a huge swathe of industry.

This is a financial strategy that has driven far more than one company to the wall. I also wonder if the executives weren’t also trying deliberately to create a debt, so that they could dodge corporation tax for five years. This is one of the tricks Stewart Lansley and Joanna Mack describe in their book on contemporary British poverty, Breadline Britain.

Over the years the outsourcing policy has been in operation, there’s been one crisis after another. The outsourcing companies have repeatedly shown themselves to be incompetent, not just in the case of capita, but also notoriously with G4S and the scandals over the violence and brutality it meted out towards asylum seekers in the detention centres it ran. And, of course, when a whole load of prisoners escaped on their way to court. Or jail.

Private industry has repeatedly shown that it is incompetent to do the work of the state sector. These firms have the disadvantage of having to make a profit for their shareholders, as well as the demands of their management for multi-million pound pay packets. The only way they can afford this is by cutting wages to their workers, and spending as little as possible on the service they are meant to be providing. The result of this has been a series of financial collapses. Carillion was the first. Now Capita and Interserve, another outsourcing company, is in similar trouble.

The only sensible recourse should be to cancel these companies’ contracts, and take everything back in-house. But this won’t be done. I think there’s a problem in that the state sector has been so decimated by the past four decades of Thatcherism, that it no longer has the capacity to run these services itself. There’s also the additional problem that too many politicians and media magnates have connections to these companies, or to firms in a similar position hoping for government contracts. Acknowledging that outsourcing was a failure would damage the interests of these politicos and press barons. There’s also the challenge of actually facing up to the fact that a central plank of Thatcherite dogma – that private enterprise is always more efficient than the state – is absolutely, undeniably wrong. Anybody who makes this point is denounced as a Communist in screaming headlines. You only have to look at the way the Tory press has vilified Jeremy Corbyn for daring to want to renationalise the NHS, the electricity net and the railways. His policies are very far from the total nationalisation demanded by Communists and Trotskyites, but you wouldn’t know it from the frothing abuse hurled in his direction by the Tories and Blairites.

There’s also another problem with calling an end to the outsourcing scam. PFI contracts and outsourcing allow some of the costs to be written off the official government accounts sheet. They’re still there, and we have to keep paying them, but they’re not included in the official figures. It’s why Mussolini used a similar scam when he was Duce of Fascist Italy. Any government that restores these projects to the way they were handled before risks putting millions back the official figures. And if that’s the Labour party, you can imagine the Tories making their usual hackneyed and untrue comments about ‘high-spending Labour’, and then re-iterating the spurious arguments for austerity.

I’ve no doubt that the government will do what it can to shore up the current mess the outsourcing companies are in. But the collapse of Carillion and now the severe financial troubles faced by Capita and Interserve show that outsourcing does not work. And given these companies’ highly checkered history, they should never have been given governments to begin with.

And it bears out exactly the description the author of Zombie Economics used for them in the very title of his book. Outsourcing, and the rest of the Thatcherite economic strategy of privatisation, wage restraint, low taxation and declining welfare are ‘zombie economics’ as they don’t work, but haven’t yet been put it into the grave.

It’s high time they were, and Thatcherite free trade capitalism was abandoned as the failure it so glaringly is.

The HIP and the case of the missing risk

Published by Anonymous (not verified) on Sun, 07/09/2014 - 4:50pm in

I really want to write more about the case of the missing risk – the one risk that should have been at the centre of concern for those planning the Home Insulation Program. The risk of injury and death to HIP workers and homeowners.

As became clear in the Royal Commission hearings, the possibility of injuries resulting from the scheme was initially part of the HIP Risk Register, but later fell out without comment or redress. To me this embodies the disconnect between the upper levels of the public service and government, and the reality of the work of implementing programs on the ground, that I argue is a symptom of outsourcing.

This is a snippet about the missing risk that I have included in a draft I’ve sent to The Conversation:

“Until the electrocution of 25-year old HIP worker Matthew Fuller in October 2009 the risks facing HIP installers were not even included in the 20-page central “Risk Register” drafted and administered by Coaldrake. When questioned about this Coaldrake told the Commission that she was merely a facilitator, and that no-one in DEWHA had ever told her workers could be injured as part of the program. This was not the case. The Commission uncovered the fact that injury to installers had been raised at an early DEWHA risk workshop. In fact this key risk had been listed in drafts of Coaldrake’s own risk register that were circulated between 13th and the 27th March 2009. But when it disappeared off the register between 10.54am and 12.05pm on the 27th neither Coaldrake nor any of the DEWHA staff noticed.”

But I think this issue could do with its own article…

ABC Drum “Lessons to be learnt from the pink batts disaster” 21/5/14

Published by Anonymous (not verified) on Sun, 07/09/2014 - 4:08pm in

The royal commission into the pink batts program reveals the need for well-resourced government departments, not gutted shells only able to dish out money to the market, writes Jean Parker.

Tony Abbott’s $20 million anti-Labor political advertisement, otherwise known as the Royal Commission into Kevin Rudd’s Home Insulation Program (HIP), is all but concluded. Eight weeks of hearings have revealed the picture of a worthy program turned lethal by a lack of public service capacity, and by the decision to outsource an inherently dangerous program to the market.

In the week that Joe Hockey’s budget announced deep cuts to the public service and inducements to privatise yet more state government agencies, the lessons from the HIP should also be a warning to the Abbott Government.

The high point of proceedings, falling neatly two days after the budget, was the appearance of Rudd at his verbose worst.

Four years has added little to Rudd’s understanding of what he agreed was a “system failure” that wrecked the HIP. What was revealed for the first time was Rudd’s role in hand-picking key personnel for the program – environment secretary Robyn Kruk, stimulus coordinator Mike Mrdak, and Senator Mark Arbib, who Rudd tasked with being a “set of eyes focused on implementation difficulties across the entire Nation Building and Jobs Plan”.

Interestingly, the Commission heard Kruk and Mrdak were the people who thought the Environment Department lacked the capacity, experience and skills to deliver the program. The solution was a HIP business model based on delivery by the free market.

Under the eventual market rebate model the Commonwealth was the funder, not the provider of the program.

On days 11 and 12 the Commission heard from then assistant director of the Environment Department, Kevin Keefe, who headed the HIP inside the department. Keefe testified that he was “blindsided” by the new model.

According to Keefe the message was clear:

Don’t do things in a government slow way. Let’s let the market do its work … let the market rip.

It was this design that made the program “an accident waiting to happen”. The HIP created a $2.8 billion frenzy of unsafe and unsupervised work by young, untrained workers. Just as it was designed to do, virtually overnight the HIP created a surge of market activity. Where prior to the scheme there were roughly 70,000 houses retrofitted with insulation every year, at the height of the HIP the number reached 180,000 in one month.

As his father recounted in the Commission on Friday, the first worker killed in the HIP, 25-year-old Matthew Fuller, was employed by a telemarketing company run by two bankrupts and an Irish guy “in from off the street”.

Matthew’s employers were one of 10,000 companies that sprang up to take advantage of the HIP. Qualifying as a “registered installer” under the HIP meant you were able to “supervise” an unlimited number of subcontractors and employees.

Registration and claiming rebates was done entirely online and Kevin Fuller told the Commission that the required industry white card could be obtained online in an hour or so, while a training session was meant to be two days but was more commonly “a couple of hours in the morning, couple of hours in the afternoon”.

These low barriers to entry meant Matthew’s employers were subcontracting the insulation of houses within three days of starting the company. Matthew was electrocuted nine days later working unsupervised in a Brisbane ceiling.

Mr Fuller said despite a brief suspension as a result of Matthew’s death, his employers recouped $2.64 million from the HIP at a rate of $40,000 a working day.

It was “make hay while the sun shines” as another registered installer told the Queensland Coroner last year.

This orgy of profiteering was no accident. It was the logical outcome of a policy design relying on the profit motive to deliver the program in an unregulated industry.

Former minister Greg Combet testified that he “lived in constant fear” of more disasters when he realised the sheer extent of dangerous and fraudulent behaviour endemic in the HIP. After four deaths and hundreds of house fires Rudd brought Combet in to terminate the program in the realisation that the HIP was off the rails.

As Combet’s evidence shows, the cowboy attitude of Matthew’s employers was far from isolated.

There had been patently, it seemed to me at that time, been an extensive amount of noncompliance. There were obviously flaws in the design of it.

The operations of the HIP show the need for a public service with the capacity and skills to deliver and regulate government programs.

This in-house knowledge and experience has been consistently eroded by 30 years of bipartisan support for outsourcing and privatisation. As the HIP reveals, what this results in is government departments that are little more than gutted shells whose only role is to dish out money to the market.

The HIP also shows the need for “red tape” regulations in workplace safety, and government departments with the resources and skills to properly police them. Yet the system failure that doomed the HIP could be repeated in the universities, the hospitals, and the infrastructure sector if Abbott’s budget policies are implemented.

Rather than rebuild public capacity, Abbott’s budget will further erode it. The lessons from the HIP should provide a warning to Abbott, but he doesn’t seem to be listening.

Jean Parker is a researcher who wrote her PhD on Labor’s stimulus spending under Kevin Rudd. She is a teacher at the University of Technology, Sydney and a member of Solidarity.

Published in the ABC Drum 21st May 2014: http://www.abc.net.au/news/2014-05-21/parker-lessons-to-be-learnt-from-the-pink-batts-disaster/5466762

New Matilda “The real lesson from Pink Batts” 6/5/2014

Published by Anonymous (not verified) on Wed, 07/05/2014 - 4:21pm in

The Commission of Audit has handed the Abbott government a blueprint for privatisation at the exact time the pink batts inquiry is revealing the dangers of outsourcing, writes Jean Parker

On the same day that the Commission of Audit was released in Canberra, Tony Abbott’s Royal Commission into the Home Insulation Program (HIP) resumed its hearings in Brisbane. Reading like a neoliberal how-to guide, Tony Shepherd’s report calls for a new wave of outsourcing and privatisations. Yet the evidence emerging from the HIP Royal Commission provides a salutary warning for Abbott and Hockey: outsourcing government programs to the market comes at a cost.

Abbott’s instigation of a Royal Commission into Rudd’s “pink batts” scheme is clearly an exercise in keeping Labor’s failures fresh in our minds. But the Royal Commission paints a picture of a government program that failed primarily because of its reliance on “market delivery” — precisely what Hockey’s Commission of Audit demands more of.

Over a month in to the Royal Commission it is increasing clear that it was the design of the HIP that made the program “an accident waiting to happen”. By outsourcing the program to the free market the HIP allowed unsafe and unsupervised work to be carried out by young, untrained workers. The deaths of the four young men working on the scheme were not just tragic accidents, they were the result of a program design that came from Rudd’s own office for Prime Minister and Cabinet and his hand-picked stimulus chief.

The insulation industry was deemed a great “shovel-ready” stimulus target by Rudd and his staff precisely because the lack of existing regulation meant there were no barriers to entry — great for flushing money into the economy and boosting small business, not great for creating meaningful energy efficiency or ensuring workers’ safety.

Behind the headlines about missed warnings and a rushed rollout, much of the Royal Commission’s proceedings have revolved around the program’s business model. As the Brisbane hearings have revealed, the market delivered rebate model was not initially favoured by the Environment Department staff charged with getting the scheme off the ground, but was foisted on them by senior officials close to Rudd.

Former assistant director of the Environment Department Kevin Keefe described how, 20 days into the program, he was abruptly presented with a new “free market” business model. In March 2009 Keefe attended a meeting that included Senator Mark Arbib, Rudd’s hand-picked stimulus coordinator Mike Mrdak and other senior staff from the Department of Prime Minister and Cabinet. Keefe believed the meeting would discuss the progress his department had made in getting the HIP up and running. But the heavy-hitters from Rudd’s department “blindsided” Keefe and presented a wholly new model as a fait accompli.As Keefe testified, the message of the new model was clear: “don’t do things in a government slow way. Let’s let the market do its work … let the market rip”. This laissez-faire logic was at the heart of the HIP’s design around a rebate. As witness after witness has told the commission, a “principle” of the program was that the key legal relationship in the HIP lay between the householder and the installer. The Commonwealth was the funder, not the provider. Or, as then secretary of the Environment Department Robyn Kruk put it in her statement to the Commission “… there was a strong emphasis on encouraging a high level of participation by homeowners and low-skilled workers by removing red-tape and making the program business friendly”.

The fateful decision to remove the requirement that each installer under the HIP be trained, to only requiring a trained supervisor (itself ill-defined in the program guidelines), was also justified by the notion that the government should not create “barriers” to participation.

Just as it was designed to do, the HIP created a surge of market activity virtually overnight. Prior to the scheme there were roughly 70,000 houses retrofitted with insulation every year — at the height of the HIP the number reached 180,000 in one month. As one installer reported to the Queensland Coroner last year, the attitude for the tens of thousands of start-up companies that flooded into the sector was “make hay while the sun shines”.

Those responsible knew that the HIP rebate would distort the insulation industry and draw in thousands of new start-up businesses. From a stimulus perspective, that was the point. And yet still they designed the program around the premise that existing OH&S laws would be enough to regulate industry and ensure the safety of the new recruits entering the nation’s ceilings.

It was when the department tried to beef-up safety rules, after the electrocution of 25-year-old Matthew Fuller in October 2009, that the anarchy created by the HIP was fully revealed. Even after then minister Peter Garrett banned stapling metal fasteners into foil insulation, an audit found that 33 per cent of installers were still using the banned metal staples. The “light touch” design of the HIP made it impossible to impose effective safety rules down the track.

For 30 years governments on both sides of politics have increasingly outsourced public services to the private sector under the rubric of efficiency and savings. The Commission of Audit’s call to sell off state assets and build new infrastructure through public private partnerships is more of the same. The effect is a hollowed-out public service, unable to regulate, with no in-house knowledge of how to safely deliver services. If the government listens carefully to the messages coming from their Royal Commission they will think twice before continuing down this path.

Published by New Matilda 6th May 2014: https://newmatilda.com/2014/05/06/real-lesson-pink-batts

SMH “How government freed itself of liability in insulation deaths” 8/7/2013

Published by Anonymous (not verified) on Tue, 07/01/2014 - 5:33pm in

The coronial inquiry into the deaths of the three young Queensland insulation workers on the home insulation program in 2009-10 has found that haste led the federal government to skimp on safety procedures.

But the speed of the insulation rollout was only one aspect of the program’s failed design. More central was the federal government’s neoliberal assumption that a ”market-driven delivery model” would be superior to an in-house government program in which the Department of Environment would have directly employed insulators and ensured the safety of working conditions.

Instead the government designed the program to systematically wash its hands of any consequences, by outsourcing the risks of its program to householders and start-up insulation firms. Kevin Rudd apologised to families last week, but the difficulties they will face in fighting for compensation were engineered by the government he led.

The key document that informed the model of the insulation program was a ”risk register” that contracted law firm Minter Ellison provided to the Department of Environment in April 2009. In this register, the government’s risk consultants advised that the program be thoroughly outsourced. The resulting rebate model ensured that the government’s only real role in the program would be to provide the funds, which would be delivered through the Medicare rebate system.

Minter Ellison’s risk experts doubted the department’s capacity to deliver the program in a more hands-on way within the tight deadlines demanded by the stimulus program. Even a direct contract model based on the government choosing a few large construction contractors, like that used to deliver the government’s school halls program, was seen as beyond the capacity of the department. The solution was to bring in the free market.

The other concern that led to the rebate model was that it would protect the government from legal and financial liability, or transfer that risk away from the department and onto householders and insulation installers. The real risks of the scheme were borne by the four young men killed working on the program and hundreds of people whose homes caught fire as a result of badly installed insulation. In the 20-page list of conceivable risks, there is no mention of the dangers that might face the program’s workforce. Risk of fire is mentioned once.

Rather than the government providing a safe program for workers and the community, the risk experts were there to shelter the government from legal and financial consequences. The design of the insulation program attempted to remove the federal government as a legal party from the scheme altogether. As the secretary of the Department of Environment told a Senate inquiry: ”The department had a clear design whereby the contractual relationship was between the household and the installer. The installers were not contracted by the government to install insulation under the program. Information was, however, given to the householders to support them to make informed choices.”

So householders agreed to the quality of what was put in their ceilings, and insulation installers were responsible for their employees under existing state and territory occupational health and safety laws. This is little help to the family of one killed worker, Reuben Barnes, who will struggle to win compensation now that Barnes’ employer has gone bankrupt.

Because the federal government designed the insulation program so as to take no liability for the actions of workers, it was unable then to control or effectively regulate the scheme. The problem became clear as the number of house fires and injuries mounted in late 2009. Then environment minister Peter Garrett responded by issuing three sets of increased safety regulations in September, November and December of 2009. With controversy engulfing the program, Garrett terminated the program.

If Rudd’s apology to the families of the killed workers signals a reversal of the neoliberal consensus that outsourcing and public-private partnerships are the best way to provide government programs, then it would be indeed be something to celebrate. Remember that Rudd’s stimulus spending was launched with great fanfare about the return of the social democratic state in the face of the global financial crisis. However, as the real workings of the ”Pink Batts” scheme show, the idea of market-knows-best continues to inform the way that Australia’s ostensibly public services and programs are delivered. Without recognising this, we cannot make sense of the failure of the insulation scheme, nor ensure that other workers are protected.

Jean Parker is a PhD student at the University of Technology, Sydney and member of Solidarity.

This article was published in the Sydney Morning Herald Opinion July 8th 2013 http://www.smh.com.au/comment/how-government-freed-itself-of-liability-in-insulation-deaths-20130707-2pk12.html