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23 October 2019
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INTERSERVE, ANOTHER CARILLION?

Martin Read is editor of Facilitate Magazine
Martin Read is editor of Facilitate Magazine

01 April 2019 Martin Read


Martin Read reflects on the Interserve crisis and ponders what's next for the troubled provider. 


Another year, another frustrating place in the national media spotlight for a failing facilities service supplier. Interserve’s problems have again put the outsourced sector’s recurring issues of pay, performance and pricing right back at the centre of national debate. An outside observer, seeing this as simply another Carillion happening one year on, will reasonably ask: how can all of this be happening again?


Worse, the story has emerged just as people are seeking something, anything to act as sweet relief from Parliament’s ‘Escher’s stair’ approach to Brexit – a process far from any kind of conclusion at time of going to press.


Central government as a monopoly buyer of services is at the heart of this discussion. Talk is of poor procurement decisions, broken contract models and ethical concerns about the very concept of outsourcing. But this kind of talk often misses important context – because government has indeed been responding on various fronts in the year since Carillion. 


You can certainly question its approach to introducing more SMEs into the facilities service supply chain, and indeed many have expressed legitimate concerns. You can argue, too, that it is late to the party in terms of social value, but its involvement in the work we reported last month, and its more recent pronouncements (see page 8) are encouraging. So you can question government’s approach, for sure – but not whether it is responding at all.


What isn’t certain amidst all this activity is whether it is evidence of government finally reaching the inescapable conclusion that it cannot propose an outsourced service market, consult on said market’s structure and then hide away to let ‘the market’ sort it out without first accepting, defining and publicly stating its own commitment to the cost of sustainable oversight.


Service providers are easy to criticise but difficult to pin the blame on once you analyse how the market works. The question for now is whether what’s happening in 2019 is a genuine change in direction for the slow-moving tanker that is central government. Put everything together and it feels like it could be – but the jury’s out, that’s for sure.


Martin Read is editor of Facilitate Magazine