Is the end in sight for Serco?

I remember a time when nearly every military establishment, or council, contracted out its grounds maintenance services to Serco.

I lived in a garrison town with further army and RAF establishments in the adjoining towns and villages. Serco vans and mowers were everywhere. Teams of Serco workers would be seen dashing around with strimmers in the summer, or carrying out tree work in the winter.

But it seems as though Serco is now going through some very sough times, to the extent that even its existence is threatened.

The company's share price crashed by a third on Monday as the company revealed 'a forensic examination of its books uncovered a raft of loss-making contracts'.

Back in 2000, I got an insight into how poorly after I took on an ex-Serco manager - who had been made redundant after +30 years of service - to manage the day-to-day running of our commercial grounds maintenance division.

Our manager told me stories of how Serco would deliberately pitch for contracts at under market value, in the hope that any profit would be made up from extras throughout the contract duration.

In my view it would be good for our free market economy if Serco was forced into a best value/best practice mentality.

I guess we will have to watch this space to see if they survive.

Its the "loss leader" technique that supermarkets use in abundance. cheap products to get you in the store, then everything else is regular price or expensive. The problem with many larger firms is the chap with the suit and clipboard putting the quotes together is so far removed from those actually doing the graft that they dont realise the loss will never be made back, even if all the "extra work" is done at premium rate. Thats why you can have a sole trader turning over 100k+ while much bigger companies couldnt even come close to turning over 50k per employee.

Jason Conway said:

I worked for a company called Cliff Evans when I first started out gardening they done exactly the same thing just to get contracts, Putting in prices well below the average. They are now no longer because the extras didn't cover what they were losing.
The company that bought them out started doing exactly the same although they are still with us but on a very smaller scale and deal mainly with catering now ( which is what they were anyway)
Why people would undercut so much it bankrupts them is way beyond me.

Replies

Jason Conway November 11, 2014 at 11:59am

I worked for a company called Cliff Evans when I first started out gardening they done exactly the same thing just to get contracts, Putting in prices well below the average. They are now no longer because the extras didn't cover what they were losing.
The company that bought them out started doing exactly the same although they are still with us but on a very smaller scale and deal mainly with catering now ( which is what they were anyway)
Why people would undercut so much it bankrupts them is way beyond me.
Ben Marshall November 11, 2014 at 2:41pm

Its the "loss leader" technique that supermarkets use in abundance. cheap products to get you in the store, then everything else is regular price or expensive. The problem with many larger firms is the chap with the suit and clipboard putting the quotes together is so far removed from those actually doing the graft that they dont realise the loss will never be made back, even if all the "extra work" is done at premium rate. Thats why you can have a sole trader turning over 100k+ while much bigger companies couldnt even come close to turning over 50k per employee.

Jason Conway said:
I worked for a company called Cliff Evans when I first started out gardening they done exactly the same thing just to get contracts, Putting in prices well below the average. They are now no longer because the extras didn't cover what they were losing.
The company that bought them out started doing exactly the same although they are still with us but on a very smaller scale and deal mainly with catering now ( which is what they were anyway)
Why people would undercut so much it bankrupts them is way beyond me.
James Brett November 11, 2014 at 8:45pm

Most of the Colchester stuff is done by a branch of Sodexo or one a the subs! I was seeing horticultural services around for a while, but I think its changed hands again!
PRO

Nathan - Plews Garden Design November 12, 2014 at 8:01am

They'll be fine. They're a huge multinational with their tentacles in all the dark places of the world - such as imprisoning refugees for Australia.
James Brett November 12, 2014 at 8:23am

They will probably survive in other areas but their grounds maintenance is probably a no
Lawncare-4u.co.uk November 12, 2014 at 10:07pm

in Shropshire/ Staffordshire /stoke are? my brother worked for them and a mate! they dug graves as one job.......

Jason Conway said:
I worked for a company called Cliff Evans when I first started out gardening they done exactly the same thing just to get contracts, Putting in prices well below the average. They are now no longer because the extras didn't cover what they were losing.
The company that bought them out started doing exactly the same although they are still with us but on a very smaller scale and deal mainly with catering now ( which is what they were anyway)
Why people would undercut so much it bankrupts them is way beyond me.