PRIVATISER Serco held private talks with Keir Starmer, Rachel Reeves and other shadow cabinet members before the election about getting more work from a Labour government, according to comments made by its chief executive at this month’s Labour conference. 

Reeves previously publicly condemned Serco and promised to reverse public-sector outsourcing, but it looks like Labour has now abandoned these positions.

Serco chief executive Anthony Kirby was addressing a Labour conference fringe meeting that his firm paid think tank Demos to organise. Thanks to funding the meeting, discussing Labour’s “missions” and “public services,” Kirby was on the panel for the event. He told the meeting, held in a 40-seater room in Liverpool’s Hilton hotel, that “before the election we were really excited by some of the conversations we had with Sir Keir and Rachel and some of the shadow cabinet.” By Rachel, he meant Rachel Reeves, so it looks like Serco’s boss is on first-name terms with the Chancellor.

Labour did not tell their members, or the media, that they were having “conversations” with this outsourcer.

The last time Reeves mentioned Serco in public was back in 2021. She condemned services like Covid Test and Trace “being outsourced to a large private company like Serco, which has a poor track record and known links to the Conservative Party.” In 2020 Reeves’s message was a two-word tweet — “Sack Serco.” 

In 2021 Angela Rayner also demanded to know “why Serco and other outsourcing companies are being rewarded for their failure.”

Reeves also promised to launch a wave of “insourcing,” to bring public services outsourced to firms like Serco back into public hands. This commitment didn’t make it into the main Labour manifesto, but their May 2024 election document “Labour’s Plan to Make Work Pay” still promised to “bring about the biggest wave of insourcing of public services in a generation,”  saying that “a Labour government will end the Tories’ ideological drive to privatise our public services.”

The Serco chief’s comments, and the holding of a Serco-sponsored meeting at Labour’s Liverpool conference, suggests the firm doesn’t need to worry about this “insourcing” — Kirby made clear that he thought his firm was still going to get plenty of contracts because, in his words, “I don’t think it is any longer the case that the public sector has all the skills and experience to deliver public services direct from the state.” 

He doesn’t think the public sector should develop or redevelop those skills — he wants the public sector to pay his firm for the job instead. He said Labour’s “missions” should involve “partnerships” with his firm to “reshape the delivery of public services.”

Kirby put emphasis on his wish that public-sector outsourcing should “move away from the rigid and transactional approach to contracting out of services and move to something built on trust, openness and continuous dialogue.”

It’s obvious why these kind of cosy, fuzzy “partnership” agreements might look good to Serco. But it is hard to see why the public sector should actually trust Serco. When Reeves and Rayner were condemning the firm it was because they had run Test and Trace, which traditionally is a medically led, locally grounded public-sector job, as a low-wage, remote “call centre” service. There is little evidence that this multimillion-pound contract was effective.

Serco has repeatedly proved itself not worthy of trust. Most famously, in 2013 Serco was found claiming money on a huge electronic tagging contract for prisoners released on licence who simply had not been tagged. In some cases the supposedly tagged prisoners were in fact dead. 

Serco had to repay £68.5 million to the government for its overcharging on the contract that year. In 2019, a fine of £19.2m was imposed on Serco following delayed legal action for fraud and false accounting on this Ministry of Justice tagging contract.

It is possible that Serco actually had some of those pre-election conversations with Labour at the last Labour conference, as the firm also funded fringe meetings there.

Labour was represented at the Serco-funded event by newly elected MP Josh Simons. He does not have a ministerial post, but as the former head of key Starmer-supporting organisation Labour Together, he reflects the views of at least some of Labour’s leadership. 

Simons responded to the Serco chief’s comments with some wonk-ish technocratic language about an “insurgent government” that works with an “epistemic humility” is both “iterative” in practice and driven by “storytelling.” Among these buzz-words, Simons said the government should be “clear about the ‘What’ but quite radical about the ‘How’” of public services, which suggests he would back Serco’s proposals for more “partnership” deals with the firm.

Lounge lizards

THE army of lobbyists who march to Labour conference are very visible if you care to look. Many erect “lounges” inside the conference grounds — essentially upmarket marquees where they can hold receptions, parties or meetings so that their clients can meet ministers.  

Lobbying companies that erected these “lounges” included Arden Strategies, PLMR and Connect Public Affairs. One such company, called iNhouse communications, is run by Boris Johnson’s former mayoral campaign team. 

They ran a “lounge” offering favoured conference delegates somewhere nice to sit with free coffee, snacks and phone recharging, or a free bar in the evening, which are premium services in a very crowded conference. It’s a clever piece of “soft diplomacy.” One of the key things it offered is a chance for Labour’s leaders to separate themselves from the crowd of ordinary delegates and have a little bit of guaranteed  personal space. It’s a bit like the roped-off VIP area in a club or festival. I spent just half an hour in the iNhouse marquee and saw six ministers (Darren Jones, Lisa Nandy, Yvette Cooper, Lucy Powell, Pat McFadden and Peter Kyle) enjoy the lounge, alongside executives from iNhouse clients like Juul vapes,  controversial care home giant HCA and the British Property Federation.