Outsourcing giant’s profit warning should ring alarm bells says Unite

 Is Capita set to be Ireland’s Carillion?

January 31st: Unite today called on the Government to impose a moratorium on outsourcing pending a risk assessment of major contractors.  The call follows today’s profit warning issued by Capita, which currently holds around €140 million in state contracts, and comes shortly after the collapse of Carillion leaving six Irish education facilities in limbo.

Commenting, Unite Regional Secretary Jackie Pollock said:

“40 per cent of Capita’s clients in Ireland are in the public sector, and they currently hold state contracts worth approximately €140 million.  These range from the contract to develop and run Ireland’s national postcode system, Eircode, to a contract to service Anglo Irish Bank loans on behalf of NAMA. In fact, there is scarcely a government department that does not have a contract, directly or indirectly with Capita.  Today’s news of a profit warning combined with a massive drop in share price should ring alarm bells in Government Buildings, and once again highlights the dangers of relying on outsourcing and PPPs to keep the state’s wheels turning”, Jackie Pollock said.

Regional Officer Colm Quinlan added:

“The outsourcing culture has left public administration and services – as well as workers and service users – vulnerable to giant corporations which, as Capita’s CEO today admitted, are too complex and driven by a short-term focus.

“Capita’s profit warning should come as a wake-up call. In terms of the scale of services contracted out, Capita could be termed ‘Ireland’s Carillion’.  Unite is calling on the Government to impose a moratorium on outsourcing pending a risk assessment of all major contractors.  Such a risk assessment should examine not only the financial health of such contractors, but also issues such as respect for workers’ rights and compliance with industrial relations norms.  It is noteworthy that Capita has used the state as an ATM machine while refusing to engage with the state’s industrial relations machinery or implement a Labour Court recommendation issued in September 2017 regarding enhanced redundancy terms for some of our members working for a subsidiary, AMT Sybex.

“A risk assessment must be accompanied by a willingness to bring services back in-house where unacceptable risks are identified.  It is time to call time on the outsourcing culture”, Colm Quinlan concluded.