Not too long before the general election, but that doesn’t stop the government’s personal money making machine slow down.
In the latest abuse of their power, the government are selling off the Food and Environment Research Agency (Fera) who are responsible for food safety in the UK.
Guess who the government are trying to sell it to? Their ‘preferred partner’ Capita.
Professor Tim Lang, a Westminster adviser, told The Independent that the sale of the key government research unit to the outsourcing giant Capita could undermine essential work on food safety and lead to commercial concerns being put before the public interest.
Capita formally takes over the agency next Wednesday. But Professor Lang, who heads City University London’s food policy unit, said: “I think it’s absolutely scandalous. This is selling the state, and the moment a state loses its access to science it’s in trouble.”
He claimed many food policy experts shared his view but were unwilling to speak out about their concerns.
Fera employs about 400 scientists in York and a further 50 jobs will be created in the city as a result of the deal. The group made a profit of £1.6m last year as a government entity, on sales of about £40m. Capita wants to increase the unit’s annual sales to “at least” £700m over the next decade, or £70m a year.
Not only is it a disgrace that the government are selling-off a key institution which ensures public safety. They are also giving them easy-payment terms.
The deal will result in Capita paying £20m for a 75 per cent stake in Fera; further investment will be made during the following five years. Capita is teaming up with Newcastle University for the venture, which it says will “unlock £14.5m of funding”.
In addition, the government has committed to contribute at least £50m to the unit over the next five years.
So where is the logic? Currently the facility generates in the region of £1.4 million per year. As well as paying for itself, It also generates a profit of around £1.4 million per annum – which will increase over time.
Yet the government is selling it off for a one-time short-term fee which equates to around 24 years of profit at today’s rate. BUT, the government will then buy services from the institution costing in upwards £30 million per annum with no offset, AND will be contributing £50 million per annum for five years.
According to Fera’s most recent accounts, their income is generated as follows:
European Union: 3.28%
What this clearly means is that this deal is going to increase costs for the taxpayer and guarantee profits for Capita and its shareholders.
Although the financial concern is important because of the obvious profiteering by government ministers, there is also the matter of a potential conflict of interest between Fera’s work and other Capita clients, which are thought to include the retailers Sainsbury’s and John Lewis.
“Growth will be generated through existing agreements with the public sector… and by further developing services to achieve greater penetration of the commercial market,” Capita said when it announced the deal.
Fera’s research includes analysing diseases and chemical risks in the food-supply chain, as well as looking at the effects of pesticides, tree diseases and invasive species. But Professor Lang warns that once the agency is privatised, it will be under pressure to ignore low-paying projects vital to public safety and the environment in favour of more lucrative research. The academic frequently advises the Government and the World Health Organisation on food safety issues.
Professor Lang said that Fera (which led the way in identifying horsemeat in the UK food chain) is now doomed to failure.
The shadow Environment Secretary, Maria Eagle, said the Government has not satisfied her concerns about Capita’s acquisition of the agency.
“I have some concerns about the deal and I have not been able to get much information out of the Government. Clearly the concern is that commercial considerations will skew Fera’s priorities,” she said.
This sale of public assets is far from beneficial to the taxpayer.
Not only do the figures make no sense whatsoever, there is also the matter of public safety.
Capita’s reputation is poor. The National Audit Office is investigating a contract between the Cabinet Office and Capita to provide civil service learning and development training, after a group of small businesses claimed the outsourcer had exploited its dominant position at the expense of the suppliers it works with.
Capita is also under investigation by the Financial Conduct Authority over the miss-management of investment funds.
Capita was also investigated over the ‘tagging scandal’ and overcharging the taxpayer fot its services, and the way the deal was finalised by Chris Grayling was also cause for concern.
Although Capita come to public light on occasions such as this, their involvement with government through very lucrative contracts is extensive, and much more than many people realis. Take a look at their website for yourself – you may be surprised. And keep in mind that every service within government they are involved with is the result of highly lucrative contracts with the Cabinet Office.
It is a disgrace that the current government are only interested in how much money they and their cronies can make from publicly owned services and property. It is not theirs to do with as they will – especially when it is so obvious that there are serious questions which need to be raised about their business relationships.
Nothing which is public property should be sold for profit without proper consultation with all parties representing the public – but since when has this shambles of a government given a damn about anyone or anything other than their own kind?