Serco Failure Demonstrates Urgent Need for Social Enterprise

Posted: 03 August 2018, in Blog

Versions of this article appeared in Third Force News on 03/08/18: Serco failure proves urgent need for social enterprise and Left Foot Forward magazine on 06/08/18: This outsourcing giant is trying to kick out refugees: it’s time to kick out the outsourcers


Serco failure demonstrates urgent need for social enterprise

Another day another corporate omnishambles. In the latest instalment of the Carry On Outsourcing franchise, UK Home Office contractor Serco has been trying to evict asylum seekers in Glasgow and change the locks on their doors.

The news comes hot on the heels of the collapse of another private outsourcing giant, Carillion. It is yet more evidence of the cold corporate takeover of our public services, that bizarre approach of placing profits and targets before human beings. In turn it raises big questions about political influence, the rigged economy and the old way of doing business.

A quote from Serco chief executive, Rupert Soames, neatly sums up the approach: “We are giving financial and welfare support to vulnerable people for many months, and in some cases more than a year, after their asylum claims have been refused. This is currently costing Serco over a million pounds a year.”

There you go. End of story. And here lies the key issue. Serco may not be doing anything wrong in a legal sense – they are simply doing their job. They have a clear responsibility to their shareholders, their profits and their contract with the UK Government. That’s it. At no point do they have to care about the lives of the human beings affected. The problem is not Serco the problem is the corporate model itself.

Since the Carillion collapse the UK Government has done nothing to address the failed experiment of corporate outsourcing of public services. Unfortunately, any ‘progressive’ solutions seem to involve simply turning back the clock to top-down, inefficient state ownership, where ordinary people have no voice.

However, there are many alternatives in this simplistic, binary debate. Innovative and flexible social enterprises can fill the gap, rejecting both corporate greed and the dead hand of government.

Locally and democratically owned social enterprises and co-operatives already deliver public services across Scotland and the UK. The Wise Group in Glasgow in employability and justice, HCT Group delivering bus services in south east England, the Low Moss Prison Support Pathway in Bishopbriggs, City Health Care Partnership in northern England – it already happens and it works.

Public services run by big business ends up as corporate welfare, a kind of socialism for the rich. It’s the same issue whether we’re talking about public service profiteers, bank bailouts, subsidies for train companies or government aid for weapons makers – the business model is broken.

There are of course many brilliant and ethical businesses of all shapes and sizes and many business people who are driving positive social change. In fact we need far more entrepreneurs. Unfortunately their efforts are too often drowned out by the likes of Carillion, G4S, Atos, Capita, Serco and other wealth extractors.

It’s easy to get angry but our response should be practical and constructive. We must lobby hard for democratic public services and strong business ethics. Equally we must build the positive alternative of social enterprise in every local community.