Private Money, Public Mayhem – The Privatisation Of The Fire Brigade

24th August 2017 / United Kingdom
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Private Money, Public Mayhem - The Privatisation Of The Fire Brigade

TruePublica Editor: The company which once supplied fire engines to more than 100 London Fire and Rescue Service stations, had to be bailed out in 2011 before selling its UK business for just £2 to save it.  The Financial Reporting Council (FRC) has attacked the bosses of the firm that used to lease London’s fire engines, over an accounting scandal dating back to 2009. Accountancy giant Grant Thornton was fined £2.3m for its role. This is what happens in the private sector. Gambling with private money is one thing, privatising critical public services and then gambling in life or death situations is something quite different and the government needs to be held to account for its irresponsible and reckless privatisation decisions that is destroying public trust in the institutions that support society, whilst threatening the lives of the public.

 

By David Wibberly for the Fire Brigades Union Magazine: It would be unacceptable and emotive for any politician to announce in public plans to privatise the UK fire service. Politicians accept that, despite the sustained government sponsored attacks on firefighters in the media, FBU members are still held in very high regard by the public for the work they do protecting their communities.

 

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Politicians have no option but to deny any plans for privatisation. In 2010 the then fire minister, Brandon Lewis, responded to claims that the government was considering the privatisation of the fire service, saying they were “entirely untrue”. At the same time, Mr. Lewis was working actively to support the concept of local mutuals and cooperatives in the UK fire service, most notably in Cleveland.

The public perception of privatisation is usually of some form of “competitive” bidding process, leading to wholesale sell-offs, such as the Tote to Betfred in 2011, or of public flotations on the stock market, like Royal Mail in 2013 and 2015, or a franchise agreement, such as East Coast trains in 2015.

If privatisation is not seen to be taking place in this way, it allows politicians to deny that there any priva­tisation plans. Any other means to partially privatise a fire service goes overlooked.

Before 2002, when Professor Sir George Bain was asked by the government to conduct a wide-ranging review of the UK fire service, privatisation would not have been possible. To attract private investment, operating costs have to be driven down, industry regulations moderated and opposition minimised. Bain’s report, the Independent Review of the Fire Service, led to rapid changes to fire and rescue services, and was the basis of what eventually became the Fire and Rescue Services Act 2004.

Bain’s terms of reference were described in September 2002 as: “… having regard to the changing and developing role of the fire service in the United Kingdom, to inquire into and make recommendations on the future organisation and management of the Fire Service”.

 

Long Journey

Bain’s report was unpopular with firefighters. A long period of industrial action began in 2002 and continued until 2003 when a new pay and conditions package was agreed. This overhaul of pay and conditions was the first step of a long journey down Privatisation Road. Like any such journey, there is a beginning, but how you get to the end is a matter of choice and interpretation.

Politicians point to Cleveland and champion its proposed mutual model, supposedly based on the John Lewis Partnership, giving each employee part-ownership of the company, a share of its annual profits, and a say in how it is run. In theory, it encourages employees to be more invested – literally – in their work, and so heightens productivity and profits.

At least, that’s how it is supposed to work at John Lewis. Critics argue that the proposals either pay lip service to the scheme on which they are supposedly based – or are simply a way of making privatisation seem soft and fluffy.

The limiting of the fire service’s statutory duty to perform certain tasks is another way to make privatisation a more attractive proposition. This may explain the reluctance of the government to include flooding as a statutory duty for the fire service in England and Wales (it is already a statutory duty in Scotland and Northern Ireland).

Depending on local contractual arrangements, this would, in effect, allow a private fire provider to choose whether to attend flood incidents.

 

Outsourcing

Outsourcing or contracting out some of a fire service’s function is another way to part privatisation by the back door. The Fire and Rescue Services Act 2004 allows for fire and rescue authorities to enter such agreements to secure assistance to discharge their functions.

These arrangements can only take place in relation to firefighting if “the person employs firefighters”. The legislation does not state that firefighters have to be public sector workers.

Surrey Fire and Rescue Service has done exactly this with the outsourcing of its water rescue capability. In 2012, Specialist Group International (SGI) signed a 12-month pilot contract with Surrey County Council to provide a diving service, rope, confined space and swift-water rescue capability for the fire service. As part of this contract, SGI is to provide fire cover at times of industrial action.

Described by the government at the time as “an experiment”, the pilot was extended to 2015 and, at the time of writing, was ongoing.

Peter Faulding, managing director of SGI, would not put a figure on the value of the contract, but suggested that the FBU was wrong when it estimated it was worth more than £1m a year.

Surrey FBU officials have said that 35 full-time firefighters could be hired for that – at a time when there was a shortage of about 60 in the county.

Cambridgeshire Fire and Rescue Authority (CFRA), meanwhile, is using private contractor Serco to provide cover for its chronic shortages of firefighters.

 

Total failure

CFRA freely admits that up to 18 fire engines can be unavailable at any one time because of staff shortages and is prepared to turn to the private sector to cover this shortfall.

This blurring of the public/private sector partner­ship arrangement was employed to launch what many saw as the privatisation of fire control rooms.

The attempted replacement of the 46 fire and rescue services’ control rooms across England with nine “purpose-built” regional control centres, linked by a new IT system, was a total failure.

The Department for Communities and Local Government cut its losses by terminating the contract in December 2010, seven years after it had begun, but at least £469m has been wasted.

Amyas Morse, head of the National Audit Office, lambasted the scheme saying: “This is yet another example of a government IT project taking on a life of its own, absorbing ever-increasing resources without reaching its objectives.

“The rationale and benefits of a regional approach were unclear and badly communicated to locally accountable fire and rescue services, who remained unconvinced. Essential checks and balances in the early stages of the project were ineffective.

 

Unrealistic

“It was approved on the basis of unrealistic estimates of costs and under-appreciation of the complexity of the IT involved and the project was hurriedly imple­mented and poorly managed.”

Another flawed concept in the patchwork of priva­tisation is that of transferring assets into third party ownership, a mistake that cost both London and Lincolnshire fire brigades dear.

Both transferred the provision and maintenance of their vehicles to a company called AssetCo. Only days after settling a £4m bill from HMRC in relation to unpaid VAT and PAYE, the company was facing a winding up petition orchestrated by its own lawyers for outstanding fees. Part of the resulting business restruc­ture saw AssetCo selling its entire UK fleet for just £2.

AssetCo said it left its UK business because the management team believed that operations were “based on a flawed business structure”, which was why shareholders lost so much money.

Another transfer of assets that could have gone badly wrong for several brigades involves Cosalt Plc, a non-trading holding company purported to be a market leader in the supply and service of workwear to the emergency services. Several UK fire services had contracts with the company.

In the week Cosalt was due to take over management of North Yorkshire Fire and Rescue Service’s contract for PPE, the company went into administration. Only a last-minute deal put together by joint administrator David Kelly (from PriceWaterhouseCoopers) saved the outsourcing of these assets. PWC sold shares in Ballyclare Limited, the remaining part of Cosalt Plc’s trading business to David Ross, the majority shareholder in Cosalt Plc. An interesting turn of events.

 

The latest privatisation trend is one that was first identified in the USA in the 1980s and is described as “privatisation by attrition”. In America, this was defined as “defunding specific government functions pushing them into the private sector”.

 

Many forms

In today’s Britain, this is couched in the language of austerity, budgetary constraints and modernisation. As the FBU observed in 2016: “The Westminster government intends to cut its funding to the fire and rescue service by 20% during this parliament. In the last parliament they cut it by 30%. Since 2010, 10,000 frontline firefighter jobs have gone – that is one in six.”

In 2002 the Bain Report opened the door to privati­sation in the UK fire service. It comes in many forms – some can be stand alone, some can be blended into something that, while it doesn’t feel like privatisation, is a definite step towards it.

We have travelled a long way down the murky road to privatisation, and the most important question now is which brigade will try to fully privatise first?

All efforts to hive off any element of the fire and rescue service must be resisted with vigour. A fully privatised fire and rescue service is not something any firefighter wants to see and they and the public they serve should be doing everything they can to prevent it.

 

 

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