Labour would make it harder to outsource public services, says Jeremy Corbyn

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Labour in government would radically shake-up procurement rules to make it much harder for private companies like collapsed construction giant Carillion to run public services, Jeremy Corbyn has announced.

The Labour leader said he wanted to stop “middlemen creaming off the profits” by stopping the government and local authorities outsourcing services unless they were failing.

In a departure from cross-party consensus on delivering public services which was cemented by Labour former prime minister Tony Blair, Mr Corbyn said if a decision was taken to outsource a service, there would be a legal statutory requirement to prepare an in-house bid.

His intervention comes after the collapse of outsourcing giant Carillion and a National Audit Office report showing taxpayers face a £199 billion bill for schemes under the controversial Private Finance Initiative (PFI).

Mr Corbyn told the Guardian: “We will rewrite the rules to give the public back control of their services.

“Theresa May exposed the failure of the outsource-first ideology at Prime Minister’s Questions when she said the government was ‘a customer’ not ‘the manager’ of Carillion.

“I’m sorry, but if these are public contracts we should be the manager and not have a middleman like Carillion creaming off the profits.”

Graffiti at the site of the new £355m Royal Liverpool Hospital, which was being built by Carillion, as their construction workers will continue to be paid, while bonus payments to directors and former executives have been stopped.
Mr Corbyn announced his plans to make it harder to outsource public services following the collapse of construction giant Carillion (Pat Hurst/PA)

A new public value contracts commissioner would also ensure that contracts were awarded on the basis of public value rather than to the company which charged the least.

A full public consultation would also have to be held on every outsourcing decision.

Meanwhile, Mr Corbyn dismissed anonymous Labour frontbench briefings that his age would become an issue by the next general election.

The 68-year-old said: “I am the age I am. It is not a secret, and I consider myself perfectly fit and able to do what I do. I’m actually younger than other leaders.”

Jeremy Corbyn visit to Lincoln. (Danny Lawson/PA)
Mr Corbyn’s proposals were announced after he visited Lincoln County Hospital (Danny Lawson/PA)

After a visit to Lincoln County Hospital, he said: “To misquote Donald Trump, that is a fake news agenda.

“The NHS is stretched beyond belief because of its lack of resources.

“The Prime Minister told Parliament ‘We are better prepared than ever for the winter crisis’.

“Two weeks later … we see the reality of it, which is patients being treated in hospital car parks and ambulances.”

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