SCOTTISH Labour has been accused of an embarrassing blunder after it claimed a second giant outsourcing firm was “on the ropes” leaving taxpayers north of the Border facing “hundreds of million of pounds in liabilities” if it collapsed.
A spokesman for Economy Secretary Keith Brown said the party had got their numbers wrong and should withdraw their claims.
Labour said the European Procurement Database showed Capita has been awarded multi-million-pound public contracts in Scotland in the past five years.
These include a £325 million deal for IT services and a £76m contract for a modern apprentices training programme for Skills Development Scotland on behalf of the Scottish Government. Other contracts are with councils, the Scottish Police Authority and the Scottish Fire and Rescue Service.
Just weeks after the collapse of another outsourcer, Carillion, Capita’s share price crashed on Wednesday after the firm issued a profits warning, prompting fears about its future.
Chief executive Jonathan Lewis said the company had become “far too complex” but was on the “road to recovery”.
Labour urged the Scottish Government last night to review the outsourcing of public contracts. Economy spokeswoman Jackie Baillie said: “Nobody wants firms to fail and it is essential they receive all necessary support to protect jobs and our economy, but we cannot afford another Carillion. The reality is we have another outsourcing firm on the ropes.
“Capita has significant engagement in Scotland, having been issued with hundreds of millions of pounds of contracts from the SNP since 2013.
“The SNP must review what contracts it outsources or it risks our public services lurching from crisis to crisis, threatening jobs, taxpayers’ money and leaving people without the services they need. We cannot continue with such uncertainty – and the SNP is currently at risk of sleepwalking into another outsourcing crisis.”
But a spokesman for Brown said there is no immediate risk to Capita and added: “This is an embarrassing blunder from Labour, who have got their numbers wrong and should withdraw their claims.
“Capita is solvent and not at immediate risk, but in any case contract values don’t equate to any payments which would be required in the unlikely event the company did become insolvent – something Labour should understand. The reality is that Scotland has far less exposure on these issues than elsewhere in the UK. This is because we have not entered into the wholesale use of private firms to deliver public services in the same way the UK Government has, under successive Tory, Labour and LibDem administrations.”
Meanwhile, a union warned thousands of Carillion workers are facing “chaos and confusion” after 377 UK redundancies at the collapsed group were confirmed.
Some 919 workers have had their jobs protected at the giant construction and outsourcing firm, which went bust last month. But “despite best efforts” it has not been possible to save the jobs of 377 staff, a spokesman for the official receiver said.
The Unite union said the latest announcements meant “thousands of workers remain in limbo”. The staff whose jobs have been saved are involved in infrastructure projects, central and local government, and construction contracts and are transferring to new employers who have taken on this work.
The official receiver’s spokesman said: “Despite best efforts it has not been possible to secure the jobs of 377 staff, who will be made redundant.”
A Unite spokesman said: “The latest redundancy announcement has increased the feeling of chaos and confusion which has stalked Carillion since its collapse last month.
“Workers don’t know if they will get paid from one day to the next and could be made redundant or transferred to a new contractor on lower wages at a moment’s notice.”
A government spokesman said: “As with almost all insolvencies, there are unfortunately a number of redundancies. We continue to work hard to minimise the impacts of insolvency and ensure public services run safely.”
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