Private security contractors in the UK have been actively working on numerous government contracts. Some are running prisons, while others are responsible for managing immigrant asylum centres. However, after many years of working with and for the UK Government, many private security companies are witnessing a drop in their earnings.
The latest casualty is the private security contractor and outsourcer Capita. Capita witnessed a plunge in its earnings, and CEO Andy Parker was forced to resign due to the company’s poor performance.
Some experts believe that private security contractors are feeling the heat because the Government is no longer hasty in renewing contracts.
It appears that companies such as Capita are heavily dependent on the public sector for the majority of their revenues. Most contractors prefer working for the government because it cannot go bankrupt. However, any country’s government has to go through economic cycles and has the ability to publicly name and shame companies that do not live up to expectations.
Recently, G4S and Serco, the other two security contractors working for the UK Government, have been in the news due to their poor management of immigrant asylum centres. In Capita’s case, it was embroiled in a controversy involving charges for the tagging of offenders. It is believed that some of the so-called offenders that Capita had said that it had tagged were actually dead.
However, the main reason for Capita’s plunging earnings has to do with the contracts not being renewed quickly. This is because the Government is busy preparing for the EU exit and does not have the time to renew contracts at the same speed as before. This has had a rippling effect, with Parker resigning after a dismal company performance that saw profits dropping from £112 million to £75 million.