Grenfell Tower contractor’s hiring for new project in London highlights neoliberal outsourcing nightmare

News that the principal Grenfell Tower contractor won a new contract worth almost £100 million to redevelop a London council estate might seem shocking, but really it’s unsurprising given the way the system operates in the UK.

You couldn’t make it up, could you?

Despite the secretary of state saying it should not bid for public works until investigations into the Grenfell fire had been completed, and London Mayor Sadiq Khan signing an order to that effect, Rydon – the principal contractor for Grenfell – has just been awarded a new contract worth almost £100 million ($129 million) for more redevelopment work from Ealing Council in London.

Ealing says it selected Rydon as a ‘partner’ for their project to demolish the 264-home High Lane estate and replace it with 450 homes in April 2017, i.e. two months before the Grenfell Fire. But why couldn’t they have put the decision on hold until after the inquiry into the fire which, lest we forget, caused the death of 72 people?

What this highlights is how outsourcing in the neoliberal era allows councils and companies to evade proper responsibility.  Only last month, Sir Martin Moore-Bick, the judge in charge of the Grenfell Inquiry, said in his report into the first phase of the fire that the aluminium composite material cladding on the outside of the tower was the ‘primary cause’ of the flames spreading up the building. He said the external facade failed to comply with building regulations.

So, who’s responsible? Kensington and Chelsea London Borough Council? They contracted Kensington and Chelsea TMO to manage the Grenfell building, who then commissioned another company to manage the refurbishment project. Rydon was given an £8.7 million ($11.2 million) contract for the refurbishment. But they subcontracted the cladding installation to another firm, Harley Facades, who got their panels from another company.

The survivors’ lawyer said the refurbishment turned the building into a ‘death-trap.’ But who should we hold to account?

a) Kensington & Chelsea Council
b) Kensington & Chelsea TMO
c) Rydon
d) Harley Facades
e) other companies/sub-contractors who were involved in the refurbishment

or a combination, or all, of the five?

See how tricky it is?

The mania for outsourcing, which began in the 1990s as an adjunct to privatization, which began around a decade earlier, means that it’s so easy for government, public authorities and private companies to pass the buck on to someone else. “It wasn’t our fault, it was the sub-contractors.” Then the sub-contractor blames the company they’ve sub-contracted to. And so it goes on, leaving the consumer perplexed and not knowing who to complain to.

What kind of world are we living in if the main Grenfell contactor is able to still get lucrative public sector contracts while the inquiry into the fire is still ongoing, you might well ask.

‘A neoliberal world’ is the answer. Before neoliberalism, it was much clearer where the responsibility lay when things went wrong. Today, profit maximization means that companies prefer to pay other companies or individuals to carry out work that they themselves have been contracted to carry out rather than employ people directly to do the work. 

The old saying that a fish rots from the head down definitely applies here. The government, instead of setting an example, is the worst culprit. The UK government spends a mind-boggling £251 billion ($324 billion) a year on outsourcing and contracting.

It was only this month that the government included Rydon on its list of approved contractors for high-rise accommodation work in the south of England! 

You can understand why survivors of Grenfell would be upset about that. 

The outsourcing system is absolutely rife in the construction industry, as the FT highlighted in a 2018 report. 

The paper gave the example of the construction of a new 24-story London skyscraper nicknamed ‘The Can of Ham.’  Mace, “an international consultancy and construction company,” won the £135 million $174 million) contract to build the project. But of the 400 people working on the construction site, only 40 were employed directly by Mace.

“The remaining 360 workers work for more than 40 subcontractors, or for sub-subcontractors, and some have been hired on a weekly, daily or even hourly basis,” the FT noted.

The report quoted one Mark Farmer, who led a government review of the construction industry, as saying that the outsourcing/subcontracting system was ‘broken’ and unsafe. It was also noted that outsourcing happens more in Britain than in any other country in the world. It’s worth mentioning here that a director of Rydon, Andrew Goldman, could not say what type of cladding was used at Grenfell when asked in a TV interview.

It’s not just construction where there are major problems of accountability. Britain’s privatized utilities operate under the same, or a very similar, model. Your water company will contract someone else to mend your leak. The telephone company will do likewise. And if the job’s not done properly? Well, who do you blame?

The fact that the Grenfell contractor is still being awarded lucrative contracts (and in addition to the High Lane job, it has been reported that Rydon is also working on a £155 million ($200 million) joint venture contract to regenerate Ealing’s Green Man Lane estate), surely signals to us that we need an urgent review of an out-of-control outsourcing and subcontracting system, which goes way beyond the tragedy of June 2017.  

We actually need a new economic model, where people always come before profits.

Follow Neil Clark @NeilClark66

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