Connaught - first casualty of the public spending cuts

Connaught is more usually associated with a luxury hotel or, for people of my vintage, a strange racing car from the 1950s which was in the dinky range. However, it is most significant as one of the UK's largest integrated service providers which has grown on the back of public sector outsourcing in housing and property management. It is expected to go into administration with the possible loss of up to 10,000 jobs with all the consequences for families and many social housing providers and councils will lose services. A few companies are sitting on the sidelines hoping to take on some of the contracts but they may have to renegotiate prices. This will further erode the ability of the public sector to maintain the quality of services or lead to further public sector price inflation.


No doubt the media will continue to concentrate on Andy Coulson as the big news story but does anyone really believe that an editor of the News of the World wouldn't encourage phone tapping? Connaught is the bigger and more significant story. Ask the citizens of Norwich who are heavily dependent on Connaught to provide many of their services. One of the results of New Labour has been a massive shift towards outsourcing, including the type of contracts carried out by Connaught and a huge tranche of PPP for hospitals, schools and transport projects. They changed the landscape of service contracting in a way that Mrs Thatcher tried but failed to achieve. 

So if we have this scale of collapse as the coalition begins to trek through the foothills of public expenditure cuts what will happen after their Spending Review begins to bite? The Chief Constables were the first to the barricades with their defence: 'We will take out civilians who do the administrative and technical jobs and replace them with police officers whom we cannot make redundant. This will reduce the number of police on the beat and, ergo, crime will rise again' said one of their number last week without understanding the irony of paying someone twice as much to do a job less efficiently whilst at the same time reducing the front line service. Watch out for the rest of the public services, starting with the armed forces, to pile in with similar tales of the expected.

I remember that Connaught gave up on motor racing with the advent of rear engines, it is a message for the coalition, that trying to drive savings by frontline savings is not going to be a winner.