Another immigration-related mess that Capita has been implicated in recently was the court interpreters contract. In December 2011, Capita acquired Applied Language Solutions Ltd (ALS) for £7.5 million on a cash-free, debt-free basis, with a further “contingent consideration” of up to £60 million over four years.
In August 2011, ALS was awarded a £300 million national contract with the UK Ministry of Justice to run a new Framework Agreement for the provision of all translation and interpreting services to the ministry. The agreement has been in effect since February 2012.
In the first month of the four-year monopoly deal, the company only fulfilled 58 per cent of service requests – against a target of 98 per cent – and received 2,232 complaints in the first quarter of the year. Media reports at the time talked of “courtroom chaos” as court proceedings were being held up or collapsing because interpreters had not shown up or did not have the necessary competence (see here, for example).
Giving evidence to the Commons justice select committee, the former CEO of ALS, Gavin Wheeldon, blamed the failures on interpreters' “resistance” to the new working conditions. According to one survey, up to 90% of the 1,206 interpreters who worked for ALS under the old system boycotted the new regime because they were unhappy with the dramatic pay cuts and poor travel expenses under the new arrangements.
Capita claims there have been “many recent improvements to the terms and conditions with which we offer interpreters who wish to work with us within the Criminal Justice Sector.” The current rates the company pays are £22 per hour for Tier 1 (specialist, such as those used by courts), £20 per hour for Tier 2, and £16 per hour for Tier 3. But this is still below the standard acceptable rates (see the UKBA's already-low rates, for example).
Mr Wheeldon admitted his company had relied on “extrapolated” figures to draw up its plans for the MoJ contract but blamed the “serious lack of management information” from the court service about its needs. However, when the new system started, out of the 1,200 specialist interpreters promised, only 280 were available.
The contract, seen by Corporate Watch, states that the contractor, ALS, “shall be responsible for the accuracy of all drawings, documentation and information supplied to the Authority by the Contractor in connection with the supply of the Goods or Services and shall pay the Authority any extra costs occasioned by any discrepancies, errors or omissions therein.”
At a Public Accounts Committee hearing in October 2012, it emerged that senior MoJ officials had not read the credit rating report that they themselves had commissioned, which warned the ministry not to award more than £1 million a year of business to ALS because the company was “too small” to shoulder bigger contracts. The framework agreement is worth £42 million a year.
It is understood that all face-to-face interpreting and document translation are provided by Applied Language Solutions itself, while sign language and telephone interpreting are outsourced to two separate subcontractors.
Inefficiencies and savings
The MoJ claims the contract with ALS will save it £15 million a year. Similarly, Capita boasts that the framework agreement “has been designed to be more efficient and will provide users and taxpayers with a better, more effective service over the term of the contract.” Other 'benefits' cited by the company include a single pricing matrix, one point of contact to book services, and a uniform measurement of service usage. The question is: What is exactly meant by 'efficiency' and how are these 'savings' made?
Following Capita's acquisition of ALS in December 2011 – which has now been re-branded as Capita Translation and Interpreting and forms a new stand-alone business within the Capita Group – there was a systematic programme of “restructuring and change” taking place behind the scenes. Capita claims this was to supply frontline staff with the “help” they need so that they work “more efficiently and effectively, while allowing departments across the public sector to save money.”
But as we have seen with numerous other private restructuring programmes, in the world of privatisation and outsourcing, efficiency means cutting any 'extra' costs, primarily labour costs. Thus, Capita's “reducing operational inefficiencies” in its new translation business simply meant cutting down on staff, wages, other staff expenses such as transport, social security and so on. The impact on the quality of public services is almost always similar to what we have seen with the court interpreters.
In its Tender Response, ALS promised the MoJ the following: “Our business model is tried and trusted and has delivered significant cost savings to a number of existing customers within the [ministry].” And this is how they did it: the introduction of a “more competitive national environment amongst the interpreters” by abolishing the three-hour minimum payment and only charging for the “actual work done.” “Interpreters that want to make a real career within this sector,” the document adds, “have been extremely flexible, understanding the new economic environment and pushing themselves forward for more professional development and more assignments.”
The company then sites as evidence its “tried and tested methods” used with police forces, which have allegedly delivered “dramatic cost savings and value for money across the board.” These include hourly rate reductions; abolishing the three-hour minimum for interpreting assignments and replacing it with a one-hour minimum, then charging by the minute after the first hour (or by the second with telephone interpreting and by word with translation); lower travels expenses; and technological alternatives to face-to-face interpreting (machine translation, for example).
Interestingly, ALS had anticipated “negative media coverage” of its contract with MoJ: “The UK press may report the annual spend on language services and can report, under the Freedom of Information Act, on payments made to suppliers of these services.” So the cautious company warns the ministry: “It is therefore essential that an agreement statement be in place to use in response to any questions around this topic, which will communicate the efficiencies that the framework agreement will deliver and in turn how these will equate to genuine cost savings for the MoJ.”
Another anticipated risk was the “potential lack of interpreter engagement”: “In the Northwest, we have encountered a group of interpreters who have attempted to resist the outsourcing by the Police Services and have refused to accept assignments via Applied Language Solutions or any other agency.” But it goes on to reassure the ministry: “We do not envisage this causing any problems for the provision of the contract” because, “through targeted recruitment and sponsorship of linguist training, we have fully mitigated this problem.”
The other aim of Capita's taking over ALS, which had just won the MoJ contract, appears to be establishing a near-monopoly in the public interpreting and translation services market. This, in turn, would make the introduction of drastic measures, such as those mentioned above, easier for the company, as there would not be many competitors that unhappy staff could switch to.
Indeed, according to Capita, the 'contingent consideration' of extending the ALS acquisition deal to £60 million over four years is based on “ALS achieving growth targets in line with the successful roll-out of the MoJ contract and greater penetration of the UK language services market.” In a press release, Capita Group's chief executive said at the time: “By combining ALS's specialist skills and proprietary technology with Capita's operational expertise and balance sheet, we believe that this will allow us to become a very strong player in the language services industry. There are excellent opportunities for organic growth both in the UK and internationally.”
ALS had made an operating loss of £0.3 million in the financial year to May 2011, on turnover of £10.6m.
Given that the MoJ contract with ALS resulted in “total chaos’’ while providing an “appalling” service, to quote the Commons public accounts committee's report on the fiasco, have any remedial measures been taken by the MoJ against the company?
The framework agreement, seen by Corporate Watch, states that the contractor “shall employ at all times a sufficient number of Contractor’s Personnel to fulfil its obligations under the Contract. All Contractor’s Personnel shall possess the qualifications and competence appropriate to the tasks for which they are employed.” This was clearly not the case, at least in the first few months of the contract, by the company's own admission.
Under 'Particular Conditions' attached to the contract, this is emphasised again: “The Contractor will recruit sufficient numbers of interpreters/translators to provide 24-hour cover 365 days per year. The Authority [the MoJ] cannot guarantee the volume of Service requirements under this Contract.”
In other clauses of the agreement, the contractor should have taken “reasonable care to ensure that in the performance of its obligations under the Contract it does not disrupt the operations of the Authority, its employees or any other contractor employed by the Authority” and should have “satisfied itself that it has sufficient information to ensure that it can provide the Goods or Services” – these being the “timely supply” of interpreters and translators in accordance with the “quality standards” specified in the agreement.
Now, if the contractor failed to provide these services, or provided them inadequately, the agreement states that the MoJ may reduce payment, deduct a sum of money from any scheduled payment due to the contractor or terminate the whole contract. The latter requires the authority to be “of the reasonable opinion” that the contractor is “in default” or “material breach” of the contract and has not “remedied the default to the satisfaction of the Authority within 10 working days” (or such other period specified by the authority). Alternatively, the authority may supply or procure the services somewhere else until the contractor “has demonstrated to the reasonable satisfaction of the Authority that the Contractor will once more be able to supply all or such part of the Services in accordance with the Contract.” The MoJ does not appear to have had the will to take any of these measures.
As far as Corporate Watch is aware, ALS, or Capita Translation and Interpreting, has only been fined £2,200 for “disrupted services.” No other penalties have apparently been levied against the company during the first few months of the contract, when disruption was at its worst. Both Capita and the MoJ declined to confirm or deny whether this is the case.
Furthermore, it can be argued that knowingly disrupting court services for private interest is tantamount to contempt of court. The legal definition of 'contempt of court' covers a wide variety of conduct which undermines, or has the potential to undermine, the course of justice and the procedures designed to deal with it.
According to the public accounts select committee, ALS knew it was “clearly incapable of delivering” the MoJ contract, and when Capita took over ALS in late 2011, it “had no hope of recruiting enough qualified interpreters in time to start the service.” Shouldn't the company and its new owner be held responsible for this?
In its Tender Response submitted to the MoJ, ALS had claimed that 2,500 of its 4,500 registered freelance interpreters were “suitably experienced and qualified” for the MoJ's needs, and promised its criminal justice services team would “expand considerably to accommodate the requirements of the framework agreement.” It even proposed a service that would “exceed all the key deliverables demanded by the Authority.” It turns out that many of the 'available' interpreters had merely registered an interest on the company's website and had not been subject to any official checks as to whether they possessed the required skills and experience.
Then, there are the 'lessons' learnt by government and the assurances that things have now 'improved'. The justice minister Helen Grant had this to tell us in December 2012: “We have now seen a major improvement in performance – more than 95 per cent of bookings are now being filled, complaints have fallen dramatically and we are continuing to push for further improvement.” Margaret Hodge MP, chair of the public accounts committee, said: “This is an object-lesson in how not to contract out a public service.” Similar lessons were supposedly learnt in the aftermath of the G4S Olympics shambles last year.