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What is organised crime doing disposing of rubbish?

Criminal gangs are growing rich on public-sector contracts

29 February 2020

9:00 AM

29 February 2020

9:00 AM

There were headlines recently about how more than half of local councils had recorded a large increase in the number of ‘fly-tipping’ incidents: cases where rubbish and waste are collected, then illegally dumped and left to rot in open fields. That practice normally has dire consequences for the local environment, and sometimes for the health of animals and people who live close by. Various sources were quoted claiming that organised criminal gangs were usually responsible for illegal fly-tipping. On the face of it, that is an astonishing claim. What is organised crime doing disposing of rubbish? But no one seems interested in finding out what lies beneath it.

When I worked at the Home Office, I was amazed to discover the existence of this criminal underworld — and government’s unintentional complicity in it. Some of the worst fly-tipping is committed by waste management companies working under contract for local councils. Dig deeper, and   many of these companies turn out to have been run by organised criminal gangs. They appear to be effective and respectable, and offer astonishingly low bids for disposing of the council’s rubbish. Their bids are irresistibly low because they skip the most important part of the contract: detoxifying the rubbish. They just dump it instead.

It isn’t only councils that have handed contracts worth large sums of public money to organised criminals offering suspiciously cheap rates. The police themselves have done so as well: one force I’ve spoken to discovered that it had awarded its own waste-disposal contract to a company affiliated to an organised criminal network.

Behind the increase in fly-tipping is a frightening development: the infiltration of public sector procurement by organised crime. It is happening on a very significant scale. ‘Waste management’ is just the start — as it was in Italy in the 1950s for the Mafia. What propelled the Italian Mafia from a relatively small-scale criminal gang into a nationwide organisation that could control politicians and parts of the legal process was its takeover of the waste-disposal business – and in particular of government contracts.

The lack of concern from central government is astonishing and alarming. A decade ago, Scottish police investigating a taxi company owned by a well-known (and very violent) gangster were surprised to discover that the taxi company had been given a contract worth more than £2 million by NHS Glasgow to take patients to and from hospitals. The discovery was particularly surprising as Glasgow police had warned Glasgow NHS that the taxi company was linked to organised crime.

The incident upset several senior Glasgow police inspectors. They wondered how many public sector contracts in Scotland were being awarded to what were either straightforwardly criminal enterprises or linked to companies that were ultimately controlled by criminals. So they obtained Scotland’s public sector procurement database, which lists each good or service that is purchased with the roughly £11 billion worth of public money that is spent every year in Scotland. The inspectors matched the information up with Police Scotland’s list of individuals and companies known to be involved in organised crime.


They were shocked by what they found: a significant portion — perhaps as much as 10 per cent — of the amount being spent every year on the purchase of services by the public sector in Scotland was going to criminal organisations. And that was just the companies known to the police. Their own list was not a comprehensive index of every criminal enterprise, and they knew it. But even using that list, it was clear that tens of millions of pounds of taxpayers’ money was being handed to criminals. Local councils, the NHS and other government agencies were purchasing transport, security, waste disposal and other services from criminal gangs. Criminals were growing rich on public sector contracts.

One might have thought that this discovery, which the Scottish inspectors shared with everyone they thought needed to know, including ministers in Westminster, would have led to an instant reappraisal of procurement practices across the UK. If the process of criminal infiltration is happening on anything like the same scale in England as it is in Scotland, then hundreds of millions of pounds of public money is being given to criminal organisations. The government would be actively aiding and abetting the growth of criminal enterprise on a huge scale. That is something that taxpayers might not be very happy about.

But there has been no reappraisal. Nothing significant has been done to address the problem. It hardly even seems to be recognised. There has been no announcement, no policy proposal, no speeches by the Home Secretary or the Justice Secretary. Search across police and government websites for ‘organised crime’, and you will find a lot of disturbing material about the consequences of allowing organised criminal groups to flourish unchecked. But you won’t find anything that suggests organised crime is quietly infiltrating public sector procurement and making a fortune from it.

That may be because the government, the police and the prosecuting authorities are all at a loss as to how to stop it. During my time at the Home Office, we discussed a forthcoming speech by Theresa May, then Home Secretary, about the dangers of organised crime. I was shown a police briefing about the scale of its infiltration of the public sector. It was so secret that I had to read it under the eye of a senior police officer before he took it back.

It seems this is a battle ministers have chosen not to fight, but why? What makes them so reluctant to try to defeat a development that poses a moral threat to the integrity of government? Procurement rules and regulations are complicated and difficult to enforce, but is it really beyond the combined intelligence of ministers and officials to prevent companies known to be controlled by criminals from being handed contracts worth hundreds of millions of pounds?

It would surely not be hard to require organisations spending public money to check with police before awarding a contract. CRB checks are compulsory for anyone applying for a job that involves working with children: why couldn’t similar checks be done with companies tendering for public sector contracts? The short answer is: EU Directive 2004/18/EC, Article 45. In the UK, it’s taken to mean that companies can only be excluded from being awarded government contracts if one or more of their directors have been convicted of a serious offence. Police intelligence that a company is suspected of involvement in racketeering or some other form of criminal enterprise cannot legally be used to prevent it from winning a public sector contract.

But now we have left the EU and the jurisdiction of the European Court, that regulation should not be a problem — at least in theory. Practice may be very different. Supposing parliament gets around to repealing EU Directive 2004/18/EC, Article 45 (and we have incorporated all EU law into our own statute book, so it will have to be explicitly repealed), it will then require a great deal of activity on the part of public sector procurement officials to start checking whether a company that has won, or is now tendering for, a government-financed contract is linked with organised crime, and should thus be barred from receiving any government money. Criminal organisations have successfully sued councils for cancelling their contracts. Even when EU Directive 2004/18/EC, Article 45, is gone, they may still be able to do so.

It will also require officials to show a considerable degree of personal courage. Although organised crime’s infiltration of government doesn’t usually involve explicit threats of violence, there certainly have been cases of officials being told by thugs that: ‘We know where your children go to school — bear that in mind when you make the decision on who to award this contract.’

Generally, however, the process by which the integrity of government is corrupted is much more insidious. It is through the corruption of lawyers and accountants and associated professionals who provide cover for what the criminals do and make exposing it much harder. Lies, deception, intimidation, cheating and above all waste of public money are the characteristics of organised crime as it moves in on the public sector, rather than the explicit violence depicted in movies and TV shows. That is one reason why it is so hard to deal with it.

Every individual who is part of a criminal organisation knows that ‘he who has the gold makes the rules’. We are handing criminals a great deal of gold. Sooner or later, we shall find that we have to play by their rules. It is hard to overstate what a catastrophe for the integrity, the honesty, and the efficiency of our government that will be.

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