Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://www.socialistparty.org.uk/issue/981/26835

From The Socialist newspaper, 7 February 2018

Capita in crisis: bring all outsourcers back in-house

Capita is one of the outsourcers which managed the DWP's notorious 'work capability assessments', photo by Pete Mason

Capita is one of the outsourcers which managed the DWP's notorious 'work capability assessments', photo by Pete Mason   (Click to enlarge)

Leo Marsden, Lambeth and South West London Socialist Party

Shares in outsourcing giant Capita have collapsed following the company's profit warning to shareholders. This follows shortly after its competitor Carillion sank into liquidation, and underlines further the fragile state of British capitalism.

Shares fell by more than 47%, resulting in enormous profits for hedge funds who had sold them 'short' - essentially betting on misery for Capita's workers and small business suppliers. Shares in Serco and other outsourcers also fell significantly, reflecting a wider malaise.

Despite the collapse, the company appears to have avoided bankruptcy, with emergency measures to halt dividend payments and issue 700 million in additional shares. Management is also drawing up plans to 'cut costs' - no doubt meaning attacking workers' jobs, pay and conditions.

This may provide bosses temporary respite - at the cost of the workers who make them their money. But it will not solve the problems of a company with over 1 billion of net debt suffering from decades of underinvestment.

Like Carillion, part of Capita's problems stems from austerity - cuts in public budgets mean outsourcing vultures are competing to do more with less. Although the main impact of this corner-cutting is on workers and service users, it shows the short-sightedness of austerity even from the bosses' blinkered point of view.

Meanwhile, the Tories have had to bring forward the end of Stagecoach and Virgin's contract to run the East Coast railway - again. After cutting it from 2023 to 2020 in November, it will now end in months. The government may end up running it directly.

And more problems are looming for the outsourcers. After years of pumping in cheap credit to try to restart the economy, central banks are now increasing borrowing costs. This will only cause more bankruptcies.

Panicked traders have already responded to interest rate hikes and fears of asset bubbles bursting by wiping $4 trillion off global stocks in a week.

Britain's ruling class is desperately trying to avoid these tremors becoming a generalised economic crisis. Banks and the state scrambled to put together 325 million of support for Carillion's small suppliers. It's a fraction of the firm's liabilities, but reflects the banks' own precarious position and fear of further insolvencies.

The government in turn is trying to reprivatise services rescued from Carillion - but offers no guarantees for workers and most small business creditors.

The Tories may have only temporary relief regarding Capita. If bankruptcies come to spread throughout the outsourcing and construction sectors, they would be facing another deep recession.

Carillion employed 20,000 workers in the UK and Capita employs 50,000. Hundreds of thousands of working and middle class people would be directly affected by Capita going under. We demand bailouts for workers - the bosses have had plenty already.

The Socialist Party says:

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 7 February 2018:


Save our NHS

NHS - build the fightback

NHS day of action: all around the country

Tragic death exposes criminal understaffing of NHS

York socialists head resistance to NHS outsourcing

Trump v NHS


News

Capita in crisis: bring all outsourcers back in-house

90 feared dead after migrant boat capsizes


What we think

Corbyn's left must seize the advantage in Labour's civil war


Councils

Haringey: now's our chance for a no-cuts council

Walthamstow: occupy to save the town square

Scene set for TUSC conference electoral debate


Workplace

Royal Mail forced back under threat of action

Unison national women's conference

Striking back against academies in Newham


International socialist news and analysis

May's silence is a green light for Chinese repression

Sudan: Mohamed Satti released - global solidarity campaign gets results!

Protesters denounce oppressive Sri Lankan regime


Opinion

GCSE grading game stresses out students - even more than before!

Fighting sexism: Positive discrimination - yea or neigh?

Bernie's book shows need for workers' party

Darkest Hour: Not the usual flattery of brutal Tory Churchill

The Socialist inbox


Socialist Party reports and campaigns

The Socialist Party is being evicted - we need you!

Yorkshire Socialist Party regional conference


 

Home   |   The Socialist 7 February 2018   |   Join the Socialist Party

Subscribe   |   Donate   |   Audio  |   PDF  |   ebook






Related links:

Outsourcing:

triangleCall to arms by Southampton council unions

triangleHealth services in meltdown - fight to save our NHS

triangleNHS Leeds: Campaigners halt outsourcing... for now

triangleYorks NHS workers fight outsourcing

triangleNHS workers plan coordinated strikes across West Yorks against outsourcing

Workers:

triangleSocialist Party Northern conference: Workers are sick of cuts and have the power to fight back

triangleHackney school bus workers walk out

triangleMidlands machine bearing makers launch all-out strike

triangleVictory for Birmingham bin workers

Carillion:

triangleWeak Tories must go. General election now!

triangleInterserve debts

triangleTories ensured Carillion meltdown went unchecked

Shares:

triangleAmazon tax halves as revenues soar - nationalise now!

triangleSocialism 2016: Putting socialism on the agenda

Banks:

triangleNew recession fear stalks the world economy

News and socialist analysis

News and socialist analysis

20/3/19

Cuts

Cash-strapped schools now 'fourth emergency service'

20/3/19

Tuition Fees

Top unis threaten cuts if tuition fees

20/3/19

New Zealand

New Zealand mosque terror atrocity

20/3/19

EU

May's government facing endgame

20/3/19

Youth

Youth strikes show the way - mass action can oust Tories

13/3/19

Climate change

Only socialist planning can save the planet

13/3/19

Universal Credit

Tories out. Scrap Universal Credit. Fight for living wages and welfare!

13/3/19

Workers

Neither Tories or EU - only fighting trade unions and a Corbyn-led government can deliver workers' rights

13/3/19

Them & Us

Them & Us

13/3/19

General election

Weak Tories must go. General election now!

13/3/19

Crime

Anger after violent youth deaths - Communities need public services not cuts

6/3/19

Labour Party

No retreats: Corbyn must stand firm against Blairites

6/3/19

Women

A socialist programme to end women's oppression

6/3/19

Them & Us

Them & Us

6/3/19

NHS

A&E 4-hour waiting targets scrapped - Save our NHS!

triangleMore News and socialist analysis articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 0798 202 1969

East Mids: 0773 797 8057

London: 020 8988 8786

North East: 0784 114 4890

North West 07769 611 320

South East: 020 8988 8777

South West: 07759 796 478

Southern: 07833 681910

Wales: 07935 391 947

West Mids: 02476 555 620

Yorkshire: 0114 264 6551

ABOUT US

ARCHIVE

Alphabetical listing


March 2019

February 2019

January 2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999