The UK government is facing renewed pressure to dismantle what a leading transport union brands an outsourcing "racket" on the railways. Fresh analysis reveals that a handful of private contractors providing cleaning, security, and catering services extracted substantial profits last year, funds the union argues should be reinvested into the network.
Profits Protected, Costs Passed to Taxpayer
Research commissioned by the National Union of Rail, Maritime and Transport Workers (RMT) has cast a spotlight on the financial dynamics of rail outsourcing. The study estimates that six major facilities management companies operating across the national railway and London Underground achieved aggregated profits of £152 million in the past year.
The firms named are Mitie, OCS, Bidvest Noonan, Churchill, Carlisle Support Services, and ABM. According to the RMT, these companies enjoy average profit margins of around 11% on their contracts. The union further alleges that many contracts contain clauses ensuring that increased costs, such as rises in the national minimum wage or employer National Insurance contributions, are passed back to the government.
"In effect, the outsourcing firms' profits are protected at the expense of the taxpayer," the RMT stated. One of the named companies, Carlisle Support Services, is ultimately owned by the former Conservative peer, party donor, and tax exile Michael Ashcroft.
Minister Urges Fresh Thinking as Union Sees 'Historic Opportunity'
The debate over outsourcing is intensifying as the government progresses with its plans to reform the industry under the new public body, Great British Railways (GBR). While Labour's manifesto pledged the "biggest wave of insourcing of public services in a generation," the party's current plans for GBR focus on nationalising passenger train operations, not necessarily the vast web of support service contracts.
Rail Minister Lord Peter Hendy acknowledged the complexity, stating the railway is "absolutely stuffed full of big and small contracts, all with different terms." He expressed a desire for GBR to "think afresh" about how to best serve passengers and the economy, including reassessing what should be outsourced.
However, for the RMT, the creation of GBR presents a pivotal moment. The union's General Secretary, Eddie Dempsey, declared: "Outsourcing on the railway is a racket that needs to be brought to an end by a comprehensive programme of insourcing." He revealed that since 2016, contractors have, by the union's calculations, "siphoned over £1.6bn out of our railway."
"This is money meant for staff and services to benefit passengers, not to line the pockets of hedge funds and private equity firms," Dempsey added.
Contractors Defend Their Role and Value
The contractors named in the report have defended their operations. A spokesperson for Mitie, whose CEO received £20.5m in remuneration over two years, said the company was "proud to support the UK’s rail network" by providing essential services "safely, securely and efficiently" while delivering value for taxpayers.
ABM UK, which provides cleaning services on the London Underground, disputed the RMT's figures but stated it was "committed to a collaborative relationship" with the union. OCS, Bidvest Noonan, and Churchill were approached for comment. Carlisle Support Services did not provide a direct statement but referenced in its annual report a belief that supply chains would "remain in place for the foreseeable future."
The confrontation sets the stage for a significant policy decision for the Labour government. It must balance its manifesto commitment against the practicalities of restructuring a deeply embedded system of private contracts, all under the watchful eye of a union demanding transformative change for its members and the travelling public.
