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ALEX BRUMMER: Testing times for outsourcing sector

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alex brummer testing times for outsourcing sector

Given that the UK Government has allocated £12bn to build a ‘world-beating’ test and trace system to halt progress of the pandemic it is not surprising that every breakdown leads to an endless search for scapegoats. 

Mistakes were made from the start of lockdown when trained tracers mysteriously were let go and when some bright spark thought that a home-grown app, which was tested on the Isle of Wight, would be superior to one built by digital giants Google and Apple and road-tested in Germany. 

The arrival of private sector skills in the shape of Dido Harding, formerly of telecoms firm Talktalk was meant to rescue the situation from the incompetence of Public Health England. 

Boost: Suspicion of profiteering has been reinforced by strong third-quarter numbers from Serco, one of firms brought in to help with coronavirus testing

Boost: Suspicion of profiteering has been reinforced by strong third-quarter numbers from Serco, one of firms brought in to help with coronavirus testing

That hasn’t quite worked either and more recently Mike ‘We’re in the Money’ Coupe, formerly of grocer Sainsbury’s, was drafted in to help. 

Adding to the dissonance was disclosure this month that some 16,000 files containing positive test results failed to be uploaded because the data sheet was overcrowded. 

Harding has plenty of experience of system breakdowns given it was a cyber-breach which triggered her departure from Talktalk. On test and trace the Government critics have been quick to blame outsourcers. They provide an easy target because of past foul-ups. 

Suspicion of profiteering has been reinforced by strong third-quarter numbers from Serco, one of firms brought in to help with testing. 

Revenues were revised up to £3.9billion, underlying profits to £165m and the shares shot up almost 17 per cent. 

Labour MP Rachel Reeves couldn’t resist piling in, accusing Serco of ‘raking in the profits’ while ‘people are paying the price for its failure’. 

Serco describes Covid-19 income as ephemeral and points out that its role in test and trace was to set up and manage test sites. 

It firmly rejects charges it is involved in the NHS app or the IT. 

The targeting of Serco by Labour comes at a moment when outsourcing firms are fighting to escape a chequered past. 

Security group G4S is under siege from one hostile bidder, Canada’s Garda World, and a US firm, Allied Universal Security Services, which has yet to show its hand. 

Garda has not held back arguing that G4S is deeply troubled. The hedge funds are betting on a deal, with Mason Capital grabbing a 1.7 per cent stake in G4S and Canyon Capital now controlling 1.4 per cent. 

In recent UK hostile takeovers, such as the Kraft deal for Cadbury and the Melrose purchase of GKN, the hedgies played a decisive role. 

Given the terrible record of the outsourcing sector it is hard to make a public interest argument in favour. 

But it is worth asking whether the UK should be entirely happy at the idea of farming out prisons, coronavirus testing centres and security at nuclear facilities to overseas buyers. 

The estimable Rupert Soames, chief executive of Serco, might even consider ramping up a white knight merger with his bigger rival G4S.

White matter 

The parade of financial results in the last week show how online retailers are streaking ahead of rivals. Asos in fashion, Just Eat Takeaway in prepared foods and white goods platform AO World have produced stonking results. 

Sharon White, the new chairman of John Lewis, who knows about digital trends from her sojourn at Ofcom, is rising to the challenge. First priority in her £1billion, five-year transformation is to ramp up online so that 60 per cent to 70 per cent of sales come through the digital channel, against 40 per cent before Covid. 

At the core will be a hub-and-spoke system, making use of the Waitrose network of stores to ramp up click and collect, although that won’t help much with the new freezer. 

That begs the question of why John Lewis would still need 40-plus department stores. As popular as its famed haberdashery may be, that isn’t going to pay the costs. 

The idea is to turn stores into something else – multi-use centres with apartments to let filled with John Lewis goodies. It’s a plan. Were John Lewis a public company there would be questions about the profit target of £400m in five years. 

That’s a big turnaround from the loss of £635m last year after big property write-offs. But with many competitors on their uppers, White has a fighting chance. 

This post first appeared on dailymail.co.uk

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Sunak’s bailout package sends budget deficit towards £400bn 

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sunaks bailout package sends budget deficit towards 400bn

Rishi Sunak’s latest bailout package for businesses could push Britain’s annual budget deficit above £400billion, experts warned last night.

Business leaders hailed the generosity of the compensation package, which will support struggling firms hit by Tier Two restrictions.

The Chancellor unveiled changes to the Job Support Scheme, which replaces the Job Retention Scheme when it closes on October 31. 

Handouts: Chancellor Rishi Sunak has unveiled changes to the Job Support Scheme, which replaces the Job Retention Scheme when it closes on October 31

Handouts: Chancellor Rishi Sunak has unveiled changes to the Job Support Scheme, which replaces the Job Retention Scheme when it closes on October 31

Under the revised scheme, employers will have to pay a smaller portion of wages of furloughed staff who have returned to work part time. 

Staff will also have to work fewer hours to qualify for support. At the same time, taxpayer subsidies have doubled – with the Government funding 62 per cent of the hours not worked.

And the Chancellor said the Treasury would provide grants for struggling companies in areas under Tier Two restrictions. 

They will be worth up to £2,100 each month and will focus on companies in the hospitality, accommodation and leisure sectors. 

The Treasury refused to provide any guidance on how much the new lifelines will cost. A Whitehall source said it depended on take-up of the scheme.

But it is thought the extra support could cost more than £22billion in total over six months. 

This includes roughly £1billion a month for every 2m people signed up for the scheme. 

The Treasury has previously indicated that between 2m and 5m will be supported by the wage subsidies. 

This suggests it could cost up to £15billion over six months. 

The bailout could push the annual deficit above £400billion, according to Capital Economics, which had predicted government borrowing was already on course to hit £390million even before the latest compensation package was announced.

Paul Dales, its chief UK economist, said: ‘The combination of the darkening of the economic outlook due to the latest Covid-19 restrictions and the Chancellor’s more generous Job Support Scheme mean there is every chance the budget deficit will top £400billion this year.’

This post first appeared on dailymail.co.uk

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Nationwide to issue credit cards made from recycled plastic

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nationwide to issue credit cards made from recycled plastic

Nationwide is to issue debit and credit cards made from recycled plastic, in a move it estimates will save 35 tonnes of carbon emissions a year.

The building society, which issues 5.4m cards annually, said it is the first major UK bank or building society to take such a step.

Nationwide, which is the UK’s largest building society, has pledged to eliminate single-use plastics by 2025.

Eco-friendly: Nationwide said it is the first major UK bank or building society to issue cards made from recycled plastic

Eco-friendly: Nationwide said it is the first major UK bank or building society to issue cards made from recycled plastic

The cards made from recycled PVC materials will be rolled out from next spring.

They will be issued to current account members first, before being rolled out across Nationwide’s product range. The society said the move is part of a wide focus on sustainability.

Claire Tracey, chief strategy and sustainability officer at Nationwide, said: ‘Our members tell us that, despite the tough times right now, they still want to make the world a greener place.

‘We’ve also set aside £1billion for our members to borrow at a special low interest rate if they want to make their homes greener.’

This post first appeared on dailymail.co.uk

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Airbnb hires Sir Jony Ive for redesign ahead of a £23bn float

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airbnb hires sir jony ive for redesign ahead of a 23bn float

Airbnb has hired famed former Apple designer Sir Jony Ive to lead a redesign of the company ahead of a £23billion float later this year.

The home rental site has hired Ive’s company, LoveFrom, to revamp its app and website, as well as create new products in a ‘special collaboration’ that will last for several years.

Ive, who is British and was knighted in 2012, was lauded for overseeing the creation of the iPhone. 

Airbnb has hired Sir Jony Ive's company, LoveFrom, to revamp its app and website, as well as create new products in a 'special collaboration' that will last for several years

Airbnb has hired Sir Jony Ive’s company, LoveFrom, to revamp its app and website, as well as create new products in a ‘special collaboration’ that will last for several years

The 53-year-old was a close colleague of Apple founder Steve Jobs and was head of the company’s design from the 1990s until June 2019, and Apple is one of LoveFrom’s major clients.

Airbnb has rebounded from the Covid pandemic, which at its peak wiped out 80 per cent of its bookings. 

It cut a quarter of its workforce, raised £1.5billion of debt and cancelled all marketing in a bid to stay afloat.

Since June, analysts believe bookings in some areas have surpassed 2019 levels.

This post first appeared on dailymail.co.uk

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