Still more fall-out from the collapse of Carillion. Both Harrow and Ealing have confirmed that, at least for the moment, their library services will be in-house rather than simply farmed out once more. Moreover, there are suspicions that Carillion was not the only private company to be worried about out there. Capita too, which although it does not directly run libraries does provide various support systems up and down the country to them, has also come under the spotlight with big drops in share prices and people worried that it too may collapse. What seems to have happened with Carillion was that it went in with the lowest possible bids for services, spent as little as it could on services, and hoped to make money by ever expanding, collapsing when its debts got too big to hide this way. Well, that’s a classic pyramid / Ponzi scheme. The hope is Capita shows itself not to be in the same category.

It would not have been such a big problem if councils weren’t so starry-eyed about the private companies. The now ex-boss of Northamptonshire and erstwhile chief of the Libraries Taskforce is on record as saying he would outsource anything. The weird mix  of the trust that ran his libraries (part university, part NHS, part council) will be a devil’s web to unravel if it proves necessary to so. And it may, because the council has warned it will likely get rid of many of its libraries. Last week it also said it may be bankrupt soon as well.

This love-in with outsourcing seems sharply at odds with what Philip Pullman has last week called “the cold-eyed dogma of austerity”. Carillion has shown that if it seems too good to be true, then maybe it is. And watch out for your pension too. Why the paradox? It seems to be down to blind adherence to  ideology and pro-profit bias (leaving aside the possibility of quasi-accepted semi-corruption in some form e.g. becoming a Director in the private company when no longer in post ) that can square this circle.

However, it is important not to tar everyone with the same brush. Library trusts are obviously very different beasts to the all-devouring too-big-to-fail Ponzi schemes. Similarly, it’s hard to see GLL in the same category. True non-profits do not ultimately act or behave the same as profits, even though sometimes (as in Lambeth below) there’s bad news stories about them. It is to be hoped that the current crisis will mean politicians are more clear-eyed when it comes to privatisation and non-profits see this as a warning not to copy the gilded ghoul Carillions of this world. Cross your fingers something good will yet come out of this trauma.



More >