Theenemywithin

THE POINT

Intelligent investing in Europe from Bridgepoint Issue 19 | May 20 11

The enemy within Combating the menace of cyber crime

Clocking out Complementary medicine Time for a rethink on Why health services need working lives the private sector bridgepoint.eu CONTENTS

2 INS & OUTS Investments and exits across Europe

6 MANAGEMENT FOCUS Pressing pause Living longer could mean adopting a very different attitude to work 12 TALKING POINT The raw truth Rising commodity prices affect us all. How can companies cope? 18 22 IN MY OPINION IN THE SPOTLIGHT A private diagnosis The enemy within As director of NHS Partners Network, Cyber crime threatens individuals, David Worskett is one of the most industries and even governments powerful voices in the UK health sector 28 FACE TO FACE Taking care Mike Parish runs Care UK and is at the cutting edge of seismic shifts in social care 33 MARKET INSIGHT Changing the landscape As government budgets come under pressure, will the private sector help fund infrastructure? 36 LAST WORD Can’t complain New Yorker Stryker McGuire compares the ability of nations to complain FOREWORD

Security questioned

In these extraordinary times of political change I’m reminded of H L Mencken’s comment that “Most people want security in this world, not liberty”. An interesting observation for the 21st Century. But the reverse would certainly appear to be true when it comes to IT. You only have to look at the number of incidents last year alone to realise that not only are individuals lax, but companies too underestimate the threat represented by ‘cyber crime’. It’s an issue for all of us and one that’s far bigger than most people realise. The danger posed by organised virus attacks and the efforts being made at national levels to ensure the right steps are being taken to avoid disaster are explored in our cover story (page 22). Across the world increased longevity is forcing people to rethink how they lead their lives, and to re-examine traditional work patterns. We examine this phenomenon, challenge the accepted view that our 30s and 40s are ‘the rush hour of life’ and investigate whether several careers later in our lives are a realistic alternative (page 6). Although it may be time to reassess traditional work patterns, employers may of course have other things on their mind. Ask any business owner what they are struggling with and in all likelihood they will cite the surge in raw material prices – everything ranging from cocoa to copper – over the past decade. In real terms they have more than doubled and the trend is accelerating. We outline which businesses have been hit most, and how, if at all, we can mitigate the negative effects of this super-cycle on our lives (see page 12). Bridgepoint’s interest and track record of investing in healthcare remains undiminished. In this edition we profile the chief executive of one of our investments, Mike Parish of Care UK, a seasoned healthcare professional we supported when we delisted the business last year from the London Stock Exchange (page 28). We also have the views (page 18) of David Worskett from the UK’s NHS Partners THE POINT Network. He argues strongly in support of the private sector’s role across Europe in assisting national healthcare systems to meet ever-increasing patient demands. In a similar vein, we explore how the downturn has forced governments to find May 2011 Issue 19 alternative ways of either funding infrastructure projects or realising value from their Published by sale. We also look at the private sector’s contribution to this vitally important part of the Bladonmore (Europe) Ltd Editor European public arena (page 33). Joanne Hart Our regular ‘Ins & Outs’ (page 2) has news on four new investments made by Design Bagshawe Associates UK LLP Bridgepoint funds in France, Germany and the UK. And finally, Last Word examines the Reproduction, copying or skill, or lack thereof, of complaining around Europe through the extracting by any means of the whole or part of this eyes of American commentator Stryker McGuire. publication must not be undertaken without the Enjoy the read I written permission of the publishers. The views expressed in The Point are not necessarily those of Bridgepoint. William Jackson www.bridgepoint.eu is managing partner of Bridgepoint

1 IN S &OUTS BRIDGEPOINT news across Europe

A definite chemistry A healthy option Bridgepoint has acquired CABB, a German chemical company with market-leading Bridgepoint has highlighted its commitment to the healthcare sector with the positions in a number of specialised areas. acquisition of a leading French hospital chain.

Médip ôle Sud Santé is a private intend to double the size of the hospital group in the south of group. France, operating in the cities of Benoît Bassi, partner responsible for Polyclinics’ Perpignan, Narbonne, Nîmes and Bridgepoint's investment activities in Avignon. The business is the sixth- France, says: “The strategy of the potential largest in France and has strong company thus far has enabled it to potential for growth. build a leadership position in the Médipôle Sud Santé currently Languedoc-Roussillon region, operates from 10 sites offering a providing the best local healthcare wide range of offering, and establishing Bridgepoint Development Capital, services including itself as an undisputed Bridgepoint’s lower mid-market medicine, player in the private business, has acquired Compagnie surgery, obstet - healthcare sector. Our Stéphanoise de Santé (‘C2S’), a rics and objective is to make healthcare specialist in the Rhône- gynaecology. The Médipôle the leading Alpes region of France. The company group has already private company in is the main operator of private established itself medicine, surgery, obstet - ‘polyclinics’ in its area, offering general and specialist medicine, as a leading rics and gynaecology in including cardiology, gynaecology, CABB is a global leader in the thickening agent for certain strategic value of the company.” player in the southern France in the orthopaedics and general surgery. manufacture of specialty foodstuffs and is a component in CABB has a leading position in private healthcare next five years.” C2S has 11 clinics, including one in chemicals. Based in shampoos. its markets, solid cash flow and is sector, acquiring clinics across the Marcel Hermann, founder and Lyon, acquired immediately Sulzbach/Taunus, near Frankfurt, CABB works extensively with expected to grow substantially south of France. Bridgepoint’s chief executive of Médipôle Sud following the Bridgepoint Develop - the company works with a range of companies in the agrochemical, over the next few years, as it acquisition of the company is Santé, says: “Healthcare companies ment Capital (BDC) investment. chemical products and delivers food, pharmaceutical and chemical pursues a more global strategy. expected to rely heavily on delivering consis - With 250 practitioners and annual “Our objective is to € custom-made manufacturing industries, providing tailor-made The company has a particularly strengthen this tently high-quality services and, revenues of around 110 million, make Médipôle the C2S enjoys a strong regional base solutions across a wide variety of solutions for new products as they strong presence in the agroprod - leading private position. given the economic and financial but there are opportunities to expand industries. CABB has four develop. The German group is also ucts sector and should benefit company in The firm issues involved in a business such the business, consolidate its leader - manufacturing sites in Germany, one of the world’s principal from the world’s growing popula - medicine, surgery, intends to as ours, we are pleased to welcome ship position and secure meaningful Switzerland and India and operates suppliers of chemical building tion and increasing demand for obstetrics and support Bridgepoint as a partner. With efficiency gains. from sales offices in Argentina, blocks based on chlorine and food. gynaecology in Médipôle Sud extensive experience in the health - Pierre Colasson, BDC partner in southern France in France, says: “With a sound manage - China, the UK and the US. It has acetic acid. The company’s Graham Oldroyd, the partner the next five years ” Santé in the care sector, the firm is well placed to 750 qualified employees and product portfolio covers reagents responsible for Bridgepoint’s acquisition of help us continue our growth plans.” ment team, strong regional profile and the financial resources from annual revenues of more than for chlorination, sulfonation and investment in the manufacturing Bridgepoint has invested in a new clinics as regulatory and Bridgepoint, C2S can become one of € 300 million. methylation. and industrials sector, says: “CABB technological trends evolve. The number of healthcare businesses the leading groups in the French CABB has a world-leading CABB chief executive Dr Martin has significant potential for further private hospital sector has across Europe in recent years private hospital sector.” position in the production of Wienkenhöver says: “CABB has earnings and profit growth by performed well in France, despite including Medica in France, Bruno Limonne, founder and monochloroacetic acid (MCAA), an lead positions in many of its becoming a more global market recent economic constraints. The Diaverum in Sweden, Terveystalo in group CEO of C2S, adds: “Bridge - essential component in products markets and a well-diversified leader through expansion and population is ageing and both Finland and Care UK in the UK. point’s investment will allow us to as wide-ranging as herbicides, product portfolio but we remain selective, targeted bolt-on acquisi - patients and health authorities are Médipôle is Bridgepoint’s second grow further in ways that would have personal care items and food. ambitious for the future growth of tions that Bridgepoint and attracted by the sector’s ability to investment in France in the last 12 been impossible on our own. They have demonstrated a clear MCAA is an essential ingredient in our business and look forward to management will be keen to provide high-quality, cost-effective months, following its acquisition and understanding of our business and the manufacture of synthetic working with our new investor, pursue.” I medical care. Over the next five merger of jewellery chains Histoire we share views on the prospects for caffeine for soft drinks, acts as a Bridgepoint, to realise the full years, Bridgepoint and Médipôle d’Or and Marc Orian last year I regional healthcare groups.” I

2 3 IN S &OUTS BRIDGEPOINT news across Europe

2 3 Bright future for Lumison and BAS Bridgepoint Development Capital has tapped into two rapidly growing markets with its latest acquisitions. A year of Bridgepoint Development Capital says: “We now have the firepower (BDC) has acquired IT services available to expand and accelerate positive activity group, Lumison and BAS, an energy the range of services we can offer, Bridgepoint’s latest annual review management solutions provider. thanks to this timely and strategically showed the group made seven new Lumison works with more than important development for our investments in 2010, committing 2,500 clients in the UK, managing business.” almost €950 million to businesses their IT infrastructure, hosting critical BAS specialises in supporting with a combined enterprise value of € building owners more than 1.6 billion. Of these investments, five were primary deals to control, in areas as wide-ranging as French monitor and jewellery and UK arts and crafts reduce their retailing. A number of exits were energy. The UK successfully completed too, building energy including the award-winning, €1.1 management billion sale of Pets at Home. Overall, € IT hardware in secure facilities, system (BEMS) market is estimated around 450 million of exit proceeds were generated for investors and providing cloud-based infrastructure to be worth £500 million a year and is several more sales are scheduled for services and offering network predicted to grow 6 per cent per this year and next. Bridgepoint- managed services. BDC intends to annum, as companies recognise the backed businesses now employ develop the business into a broad- growing importance of energy nearly 60,000 people in more than 40 based IT services group focused on efficiency. BDC hopes to maximise countries across the world. The firm the high-growth SME market. BAS’ exposure in this fast-growing has returned more than €7 billion to As a first stage in this buy-and- market and BAS managing director investors in the past 10 years I build strategy, Lumison has acquired Brin Sheridan says: “With an investor Blue Square Data, which provides such as BDC alongside manage - data centres for customers in south- ment and the original founders, we east England. now have the support and capital to

Lumison founder, Aydin Kurt-Elli, accelerate our growth aspirations.” I

Exiting safely Bridgepoint has sold its remaining stake in largest self-storage group in 2003 and Safestore, fully exiting the business after a successfully floated it on the London Stock partnership of more than seven years. Exchange four years later, retaining a Bridgepoint first invested in the UK’s minority share in the company. In January 2011, Bridgepoint sold its final 18 per cent share in Safestore, realising a total money multiple of more than four times its initial investment. Alan Lewis, who recently stepped down as a partner of Bridgepoint, has also been invited to stay on the Safestore board as a non-executive director, in recognition of his contribution to

the business over the last seven years I

4 Bright future for Lumison and BAS Bridgepoint Development Capital has tapped into two rapidly growing markets with its latest acquisitions. A year of Bridgepoint Development Capital says: “We now have the firepower (BDC) has acquired IT services available to expand and accelerate positive activity group, Lumison and BAS, an energy the range of services we can offer, Bridgepoint’s latest annual review management solutions provider. thanks to this timely and strategically showed the group made seven new Lumison works with more than important development for our investments in 2010, committing 2,500 clients in the UK, managing business.” almost €950 million to businesses their IT infrastructure, hosting critical BAS specialises in supporting with a combined enterprise value of € building owners more than 1.6 billion. Of these investments, five were primary deals to control, in areas as wide-ranging as French monitor and jewellery and UK arts and crafts reduce their retailing. A number of exits were energy. The UK successfully completed too, building energy including the award-winning, €1.1 management billion sale of Pets at Home. Overall, € IT hardware in secure facilities, system (BEMS) market is estimated around 450 million of exit proceeds were generated for investors and providing cloud-based infrastructure to be worth £500 million a year and is several more sales are scheduled for services and offering network predicted to grow 6 per cent per this year and next. Bridgepoint- managed services. BDC intends to annum, as companies recognise the backed businesses now employ develop the business into a broad- growing importance of energy nearly 60,000 people in more than 40 based IT services group focused on efficiency. BDC hopes to maximise countries across the world. The firm the high-growth SME market. BAS’ exposure in this fast-growing has returned more than €7 billion to As a first stage in this buy-and- market and BAS managing director investors in the past 10 years I build strategy, Lumison has acquired Brin Sheridan says: “With an investor Blue Square Data, which provides such as BDC alongside manage - data centres for customers in south- ment and the original founders, we east England. now have the support and capital to

Lumison founder, Aydin Kurt-Elli, accelerate our growth aspirations.” I

the business over the last seven years I

4 Manage ment focus

UK Prime Minister ‘‘ David Cameron and his Deputy, Nick Clegg, are classic examples of men stuck in what has been dubbed ‘the go with it. UK Prime Minister tive. Should young rush hour Pressing David Cameron and his Deputy, people be rushing of life’ ” Nick Clegg, are classic examples to find a job? After of men caught up in ‘the rush all, they will have plenty of time hour of life’. to work in later life and will pause Dutch economist Lans almost certainly be unable to Bovenberg has pointed out that retire much before the age of 75. For years we have been groomed to work our work is increasingly concentrated Change of pace hardest in our 30s and 40s, just when family in the period when family life is most busy, with babies and young Far-sighted economists believe it commitments are most demanding. But with children. Women frequently stop may benefit both workers and longevity increasing at alarming speed, it may be work or go part-time at this stage their employers if we could pace time to rethink traditional patterns. in their lives, causing them to ourselves a bit more and find new suffer professionally, while their ways of working that move away worked full-time, he was partners rise up the ranks by from the traditional career also extremely busy at home. nder a railway arch in putting in long hours at the office. structure. In other words, the “In my last job, I was leaving the Hackney, east London, If we are all living so much days when young people rushed house at 6am to get to west UBen Keane is having one of longer, however, why do we need straight from school to college to London for 6.45am. Then it was a the most exciting Friday nights of to try and cram our peak earning a job, all before they were 21, rush back to north London at the his year. But Keane is not years into a decade and a half? could be numbered. end of the day to pick up my partying until dawn – he’s Could we not take a more cyclical For baker Ben Keane, the daughter from nursery and then waiting for his croissants and approach? advantages of starting his own on to school at 5.45pm to pick up pastries to prove. Retirement ages are being business are all too clear. He has my son. It was a crazy year and a Keane has stepped off the pushed back across Europe. regained control of his profes - half,” Keane says. career treadmill and started his Germany, Holland and Spain sional life and can spend more Launching your own business own business, Yeastbakery. The have plans to raise their retire - time caring for his family. is one way to escape the rush long Friday night shift is when ment ages to 67 and Denmark is “I had been working in hour of life. For many more the 38-year-old makes French contemplating 72. The UK will marketing; first in the music people, the solution is to work butter pastries in time for the scrap the default retirement age business, for EMI, then for flexibly or part-time. weekend rush at the three local of 65 this year and will push back Paramount and latterly for Legislation that gives all cafes he supplies. the pensionable age to 66 by Burger King on promotions and parents of children under the age While Keane is not unusual in 2020. At the other end of the film tie-ins. I wanted to do of six the right to request flexible bohemian east London, in most scale, youth unemployment in something more fulfilling. working has helped to increase places across Europe men and Britain is now at record levels, “Working for big brands, the proportion of people working women still follow a conven - with one in five 16- to 24-year- particularly US brands, I felt that in this way. But women are much tional nine-to-five routine. olds out of work. But as average I had very little power. more likely to exercise their right In their 30s and 40s, men in life expectancy, now 77.7 years for Everything had to be referred to ask, and while some men do particular hit their professional men and 81.9 years for women, back to Miami,” he says. pose the question, many are stride. They have real responsi - continues to climb, maybe it is With two young children, aged turned down. bility at work and long hours to time to take a different perspec - 10 and six, and a wife who

6 7 Manage ment focus

6 7 Sharing childcare The rise of flexible working Professor Claire Wallace, chair of Childcare is high quality, enced lawyers to have the Stephen Overell, associate staff now return to work after sociology at the University of reasonably priced and everyone freedom of self-employment with director of policy at The Work taking maternity leave, saving on Aberdeen, has been leading takes advantage of it. the back-up of shared services Foundation, says that while recruitment and training costs, research into how families Elsewhere in Europe, more and colleagues at the other end flexible working is on the and the company believes it has combine work and caring across traditional norms apply. But of the line. increase, it is not always from cut fuel consumption by 12 Europe. “Whenever you ask there are signs of change: Nick For Plummer, the quality of choice. Many businesses have million litres a year, saving £10 fathers, they always say that they Plummer is a former lawyer who work he is now getting is just as taken advantage of requests to million in annual fuel bills. want to spend more time with dared to break the mould. The stimulating as at his previous work part-time or recruited new BT has also changed its their children. However, they 40-year-old left a hectic profes - employers, but he now has a level staff on a part-time basis to cut approach to older workers. The don’t do this. In fact, fathers sional and social life in London of control and freedom that was salary costs. traditional company retirement begin to work even longer hours for the Cotswolds several years just not possible in a City firm. “I Some businesses remain age of 60 has been scrapped but, than non-fathers. The reason is ago. Now he and his wife have a do spend much more time with resistant and the UK Institute of as the workforce has aged, it has that at this point in their life-cycle six-month-old boy and they share the family. I can dictate how Directors recently objected to the become more knowledgeable they need to maximise their the childcare while both working much work I want to do and it government’s proposal to extend and experienced. The telecoms earnings,” she says. part-time. would be possible to work for paternity leave, saying that it was group has also lifted the age Professor Wallace adds that Plummer, who previously Keystone from any location,” too big a burden for small restrictions on its graduate only in Scandinavia has there worked at a leading City firm and he says. businesses. scheme and has had at least one been a significant take-up of as in-house counsel at a biotech “When I see my old friends, Nevertheless, other companies, graduate in their 50s. flexible working by fathers. company, now works as a legal many of whom are now partners, such as telecoms giant BT, have British Gas is another company Sceptics may say that fathers consultant for Keystone Law, a and I see the long hours that they deliberately pioneered flexible that has removed the 25-year age prefer to be out of the family company that describes itself as have to work, I know I made the working. BT estimates it has limit on its apprenticeship home when there are trouble - “a law firm with long corridors” . right decision. Obviously, they saved more than £500 million in scheme – one-third of its appren - some toddlers and babies Keystone was set up nine years earn a lot more than me, but it’s property costs since 2000 tices are now older than 25. The around, but cultural reasons ago to meet a gap in the market not all about money. I want to be through flexible working. energy group’s oldest apprentice clearly play a part. for first-rate legal services at low around when my son is growing Widespread adoption of this to date, who joined after a career In Scandinavia, shared cost. But the company, which up,” he adds. model has also slashed staff change, was 57. parental leave in the first years of claims to be Britain’s fastest- The recession has done more turnover rates to just 3 per cent, German energy supplier RWE a child’s life has been part of the growing commercial law firm, than any legislation to increase compared to the industry average agrees that older workers have a social fabric for decades. also allows talented and experi - the number of parents working of 18 per cent. Most female BT role to play. “We have a small part-time. According to official statistics, just under a quarter of workers in Britain are now BT estimates it has part-time and ‘‘ saved more than £500 13 per cent are million in property self-employed. costs since 2000 through flexible working. Staff turnover rates have been slashed to just 3 per cent, and the company believes it has cut fuel consump - tion by 12 million litres a year, saving £10 million in annual fuel bills ” 8 9 Sharing childcare The rise of flexible working Professor Claire Wallace, chair of Childcare is high quality, enced lawyers to have the Stephen Overell, associate staff now return to work after sociology at the University of reasonably priced and everyone freedom of self-employment with director of policy at The Work taking maternity leave, saving on Aberdeen, has been leading takes advantage of it. the back-up of shared services Foundation, says that while recruitment and training costs, research into how families Elsewhere in Europe, more and colleagues at the other end flexible working is on the and the company believes it has combine work and caring across traditional norms apply. But of the line. increase, it is not always from cut fuel consumption by 12 Europe. “Whenever you ask there are signs of change: Nick For Plummer, the quality of choice. Many businesses have million litres a year, saving £10 fathers, they always say that they Plummer is a former lawyer who work he is now getting is just as taken advantage of requests to million in annual fuel bills. want to spend more time with dared to break the mould. The stimulating as at his previous work part-time or recruited new BT has also changed its their children. However, they 40-year-old left a hectic profes - employers, but he now has a level staff on a part-time basis to cut approach to older workers. The don’t do this. In fact, fathers sional and social life in London of control and freedom that was salary costs. traditional company retirement begin to work even longer hours for the Cotswolds several years just not possible in a City firm. “I Some businesses remain age of 60 has been scrapped but, than non-fathers. The reason is ago. Now he and his wife have a do spend much more time with resistant and the UK Institute of as the workforce has aged, it has that at this point in their life-cycle six-month-old boy and they share the family. I can dictate how Directors recently objected to the become more knowledgeable they need to maximise their the childcare while both working much work I want to do and it government’s proposal to extend and experienced. The telecoms earnings,” she says. part-time. would be possible to work for paternity leave, saying that it was group has also lifted the age Professor Wallace adds that Plummer, who previously Keystone from any location,” too big a burden for small restrictions on its graduate only in Scandinavia has there worked at a leading City firm and he says. businesses. scheme and has had at least one been a significant take-up of as in-house counsel at a biotech “When I see my old friends, Nevertheless, other companies, graduate in their 50s. flexible working by fathers. company, now works as a legal many of whom are now partners, such as telecoms giant BT, have British Gas is another company Sceptics may say that fathers consultant for Keystone Law, a and I see the long hours that they deliberately pioneered flexible that has removed the 25-year age prefer to be out of the family company that describes itself as have to work, I know I made the working. BT estimates it has limit on its apprenticeship home when there are trouble - “a law firm with long corridors” . right decision. Obviously, they saved more than £500 million in scheme – one-third of its appren - some toddlers and babies Keystone was set up nine years earn a lot more than me, but it’s property costs since 2000 tices are now older than 25. The around, but cultural reasons ago to meet a gap in the market not all about money. I want to be through flexible working. energy group’s oldest apprentice clearly play a part. for first-rate legal services at low around when my son is growing Widespread adoption of this to date, who joined after a career In Scandinavia, shared cost. But the company, which up,” he adds. model has also slashed staff change, was 57. parental leave in the first years of claims to be Britain’s fastest- The recession has done more turnover rates to just 3 per cent, German energy supplier RWE a child’s life has been part of the growing commercial law firm, than any legislation to increase compared to the industry average agrees that older workers have a social fabric for decades. also allows talented and experi - the number of parents working of 18 per cent. Most female BT role to play. “We have a small part-time. According to official statistics, just under a quarter of workers in Britain are now BT estimates it has part-time and ‘‘ saved more than £500 13 per cent are million in property self-employed. costs since 2000 through flexible working. Staff turnover rates have been slashed to just 3 per cent, and the company believes it has cut fuel consump - tion by 12 million litres a year, saving £10 million in annual fuel bills ” 8 9 When times are difficult, ‘‘ it is also cheaper to hire and fire part-time workers. Redundancy payouts to a generation who committed themselves to one firm for life have been a huge number of company may well want companies, of differing sizes and cost for businesses in people who to increase their working market sectors. The changing Europe in the last few continue to hours as their children world of work in the next few years work past 65, ” grow up, matching the decades may oblige more of us to particularly in company’s growing have portfolio careers, take side engineering – where this industry demand for staff. roads and embark on new has known skill shortages – and For Karen Ovenden, founder of endeavours at certain junctures in customer service. These staff British recruitment software in our life. know how to talk to our older business Hireserve, flexible After all, if we are going to be customers, they know what working has been at the core of working until the age of 70, there questions to ask and know how her company’s success. “When is plenty of time to try two if not to put them at ease.” we started the business, we could three different careers I In Germany, Siemens is one of only offer staff a few hours of the biggest companies that allows work a week, but we found there flexible and part-time working. were plenty of talented people About 4,000 employees at the out there who were looking for engineering group have taken up just that opportunity,” she says. the option. “At Siemens, we When times are difficult, it is evaluate our employees based on also cheaper to hire and fire performance and not on how part-time workers. Redundancy many hours they spend at the payouts to a generation who office,” a spokesman says. committed themselves to one But it’s not just corporate firm for life have been a huge cost giants such as BT, British Gas and for businesses in Europe over the Siemens that can use flexible past few years. The memory of working to their advantage. that may help to foster a shift Small and medium-sized away from employment for life in organisations have just as much favour of freelance contracts. to gain from a creative approach In recent years, it has been to working arrangements. For fashionable for leading business many small companies with executives to opt for so-called ambitions for future growth, a portfolio careers when they step flexible workforce is an ideal back from running a company on match. Parents of young children a daily basis. They typically who are keen to work fewer become non-executive directors hours when they join the of between two and five

10 When times are difficult, ‘‘ it is also cheaper to hire and fire part-time workers. Redundancy payouts to a generation who committed themselves to one firm for life have been a huge number of company may well want companies, of differing sizes and cost for businesses in people who to increase their working market sectors. The changing Europe in the last few continue to hours as their children world of work in the next few years work past 65, ” grow up, matching the decades may oblige more of us to particularly in company’s growing have portfolio careers, take side engineering – where this industry demand for staff. roads and embark on new has known skill shortages – and For Karen Ovenden, founder of endeavours at certain junctures in customer service. These staff British recruitment software in our life. know how to talk to our older business Hireserve, flexible After all, if we are going to be customers, they know what working has been at the core of working until the age of 70, there questions to ask and know how her company’s success. “When is plenty of time to try two if not to put them at ease.” we started the business, we could three different careers I In Germany, Siemens is one of only offer staff a few hours of the biggest companies that allows work a week, but we found there flexible and part-time working. were plenty of talented people About 4,000 employees at the out there who were looking for engineering group have taken up just that opportunity,” she says. the option. “At Siemens, we When times are difficult, it is evaluate our employees based on also cheaper to hire and fire performance and not on how part-time workers. Redundancy many hours they spend at the payouts to a generation who office,” a spokesman says. committed themselves to one But it’s not just corporate firm for life have been a huge cost giants such as BT, British Gas and for businesses in Europe over the Siemens that can use flexible past few years. The memory of working to their advantage. that may help to foster a shift Small and medium-sized away from employment for life in organisations have just as much favour of freelance contracts. to gain from a creative approach In recent years, it has been to working arrangements. For fashionable for leading business many small companies with executives to opt for so-called ambitions for future growth, a portfolio careers when they step flexible workforce is an ideal back from running a company on match. Parents of young children a daily basis. They typically who are keen to work fewer become non-executive directors hours when they join the of between two and five

10 1 1 0 2

Talking - 7 9

point 9 1 1 e 1 s - a 0 e 1 r 0 c 2 n i e s a e r c n i % 0 % 9 2 In real terms, commodities 2 4 ‘‘ The rawtruth prices have more than doubled + + since 1999.

Commodities ranging from cocoa to Increases in t m copper have surged in price over the earlier booms a u e

i never exceeded h

past decade, causing widespread n 60 per cent ” i w

problems for companies and m u

consumers. The trend is expected to l continue for several years but there are a ways to mitigate the situation.

ommodities are cyclical. The global economy is other factors also play a part. and riddled with pitfalls. Power of three booms included one or two of The prices of oil, wheat, weathering one of these super- Between 1985 and 2000, An increase in resource Super-cycles are relatively rare those segments but never all C aluminium and a range of cycles right now, thanks depressed commodities prices nationalism has imposed further and only three took place during three. The reconstruction effort raw materials move up and down principally to emerging market moved capital away from the pressure, as countries from the whole of the 20th century. that followed the Second World hand in hand with the global urbanisation and industrialisa - natural resources industry and Russia to Venezuela have The first occurred during the First War lifted metal prices, and bad economy. Cycles tend to be short tion. The financial crisis tested years of underinvestment demanded higher taxes for World War; the second, between harvests pushed up the cost of and sprinkled with occasional the resilience of this particular ensued. As investment dwindled, their vast natural resources, 1950 and 1957, was fuelled by the agricultural products. Oil was anomalies. While the price of one super-cycle. But soaring prices so did supply growth. raising wholesale prices on a reconstruction of Europe and unaffected. particular commodity – say last year have proved that the Higher prices are pushing worldwide basis. Japan after the Second World In the 1970s, oil prices spiked coffee – could spike at any given experience of late 2008 and early capital back into the natural “Raw materials shortages, War; and the third arose between and agriculture followed. But moment, the cost of another – say 2009 was just a temporary blip resources industry, but it can take infrastructure constraints and 1972 and 1975, during the oil and metals, after a brief jump, iron ore – could fall at exactly the within an upward trend, rather many years – in some cases as resource nationalism continue to food crisis. collapsed amid lower economic same time. than the conclusion of another much as two decades – for hamper production growth for The current super-cycle, which growth. The 1915-17 boom saw Every few decades, however, round of boom and bust in exploration to turn into commer - many commodities, while started around 2003, is metals and agriculture rising, but the commodities industry commodities markets. cial production. emerging market demand is somewhat different from these oil prices remained stable. This experiences something Discovering copper ore in a already soaring,” says Roger previous spells, dwarfing its time, all three sectors have been completely different from the The reasons why remote corner of Congo is one Jones, co-head of global predecessors in terms of swept upwards. normal boom and bust sequence: While strong demand in nations thing. Mining it, refining it and commodities at Barclays Capital. magnitude, duration and The sheer scale of the price a ‘super-cycle’, which abruptly such as China, India and Brazil is selling it is something else His views are shared by many breadth. rises also stands out. “The lifts the price of almost every raw the main factor propelling entirely. The road from one to other bankers and industry Raw materials cover energy, magnitude of commodities price material to a much higher level. commodities prices ever higher, the other can be long, arduous executives. metals and food, and previous increases during the current

12 13 1 1 0 2

Talking - 7 9

point 9 1 1 e 1 s - a 0 e 1 r 0 c 2 n i e s a e r c n i % 0 % 9 2 In real terms, commodities 2 4 ‘‘ The rawtruth prices have more than doubled + + since 1999.

Commodities ranging from cocoa to Increases in t m copper have surged in price over the earlier booms a u e

i never exceeded h

past decade, causing widespread n 60 per cent ” i w

problems for companies and m u

consumers. The trend is expected to l continue for several years but there are a ways to mitigate the situation.

12 13 1 1 1 1 - - 8 6 0 0 0 0 2 2 1 1 e e 1 1 s - s - a 0 a 0 1 e e 1 r r 0 0 c c 2 2 n n i i e e s s a a e e r r c c n n i i % % 0 % % 0 0 9 8 0 8 3 7 5 + + + + r l r i n e r a o p o g p c u o s c boom is without precedent,” says says Carlos Murilo Barros de control, and strengthening moving slowly up the learning systematic commodities hedging run on sugar in Portugal, which the World Bank. In real terms, Mello, a commodities banker at supply chains may avoid running curve, but more commodities are programmes, following the price left supermarkets empty, is a commodities prices have more Macquarie in Sao Paulo. short of critical raw materials. being hedged and hedging shocks of 2007 and 2008, which classic example. And there is a than doubled since 1999. By Many companies already buy periods are becoming longer. In left many of them reeling. Chief global shortfall in coking, or contrast, increases in earlier Dealing with rising costs insurance to mitigate the impact the past, hedging was palmed off executives are also seeking to metallurgical, coal after the booms never exceeded 60 per The strength, breadth and length of volatile foreign exchange or on the treasury division. Now the lock in prices for much longer recent severe flooding cent, according to the World of the current super-cycle pose interest rates so they are not new most sophisticated companies than in the past. Will Shropshire, in Australia. Bank’s estimates. multiple challenges for to the concept of hedging. But have put chief executives and head of agriculture business at The issue of shortages has Although speculators have companies, particularly in apart from sectors such as board members at the centre of JPMorgan in London, says some increased sharply over the past been widely blamed for soaring Europe and the US, where airlines and power plants, few their hedging policies. Hedging is companies are hedging sugar two decades as production has prices, a closer look at the market economic growth is still weak. A industries have tried to hedge also becoming consumption until as far as 2015 become concentrated on a few shows that the fundamentals of few businesses are benefiting: oil against commodity risk. The cost of more developed, to mitigate volatile prices. countries, with some exporters supply, demand and inventories and gas producers such as This may seem strange but, Arabica coffee in as companies Other companies are investing accounting for 30 to 40 per cent are at play. True, speculative ExxonMobil, BP and Royal Dutch until recently, chief executives ‘‘ the wholesale gain experience: in production, reversing recent of global shipments. Ivory Coast activity has added a bit of froth, Shell; miners including BHP dealt with rising commodities market has from physical trends to sell upstream assets. and cocoa; Brazil and sugar; the on both the upside and Billiton, Vale of Brazil and Rio prices by simply passing surged to a 34- forward buying Steelmakers, for example, are US and corn; Chile and copper downside. But some raw Tinto; and commodities traders increased costs to consumers. As year high so and the use of investing in iron ore and coking are some of the more extreme materials are not even traded on such as Glencore, Cargill and raw materials prices rise more roasters have primitive coal mines to cushion against pairings. Chief executives have financial markets and have still Vitol. But for most companies, and more, however, passing the hiked retail prices financial rising prices. Food producers discovered, in panic, that they are seen prices move sharply higher. the super-cycle is a problem. costs to consumers is proving three times over contracts, some have yet to start investing in not only exposed to price The cost of the CRB RIND index, Commodities procurement costs increasingly difficult, particularly the last 12 companies have farming but they are moving increases, but also that political, which tracks the cost of non- are rising, volatility is unprece - in fragile European economies. months ” moved to more closer to their suppliers, in some weather or operational problems exchange commodities, including dented and, in some cases, Now companies are learning complex cases providing credit to farmers could leave their business raw materials such as metal critical raw materials are in from airlines, which have system - policies, to secure output. without supplies. scrap, tallow and burlap, has desperately short supply. atically hedged against energy including the use of two- and The other area of action is the risen to an all-time high, above Commodities consumers can costs since the spike in oil prices three-way options. supply chain. Not only has the the peak of 2008. respond on two fronts: price during the Gulf War brought The food industry is a good price of commodities increased, “We are still ruled by Malthus: insurance, or hedging, should some of them to the brink of example of this trend. Large but some companies are also natural resources are scarce,” keep costs under reasonable bankruptcy. Companies are companies have launched facing localised shortages. The

14 15 1 1 1 1 - - 8 6 0 0 0 0 2 2 1 1 e e 1 1 s - s - a 0 a 0 1 e e 1 r r 0 0 c c 2 2 n n i i e e s s a a e e r r c c n n i i % % 0 % % 0 0 9 8 0 8 3 7 5 + + + + r l r i n e r a o p o g p c u o s c boom is without precedent,” says says Carlos Murilo Barros de control, and strengthening moving slowly up the learning systematic commodities hedging run on sugar in Portugal, which the World Bank. In real terms, Mello, a commodities banker at supply chains may avoid running curve, but more commodities are programmes, following the price left supermarkets empty, is a commodities prices have more Macquarie in Sao Paulo. short of critical raw materials. being hedged and hedging shocks of 2007 and 2008, which classic example. And there is a than doubled since 1999. By Many companies already buy periods are becoming longer. In left many of them reeling. Chief global shortfall in coking, or contrast, increases in earlier Dealing with rising costs insurance to mitigate the impact the past, hedging was palmed off executives are also seeking to metallurgical, coal after the booms never exceeded 60 per The strength, breadth and length of volatile foreign exchange or on the treasury division. Now the lock in prices for much longer recent severe flooding cent, according to the World of the current super-cycle pose interest rates so they are not new most sophisticated companies than in the past. Will Shropshire, in Australia. Bank’s estimates. multiple challenges for to the concept of hedging. But have put chief executives and head of agriculture business at The issue of shortages has Although speculators have companies, particularly in apart from sectors such as board members at the centre of JPMorgan in London, says some increased sharply over the past been widely blamed for soaring Europe and the US, where airlines and power plants, few their hedging policies. Hedging is companies are hedging sugar two decades as production has prices, a closer look at the market economic growth is still weak. A industries have tried to hedge also becoming consumption until as far as 2015 become concentrated on a few shows that the fundamentals of few businesses are benefiting: oil against commodity risk. The cost of more developed, to mitigate volatile prices. countries, with some exporters supply, demand and inventories and gas producers such as This may seem strange but, Arabica coffee in as companies Other companies are investing accounting for 30 to 40 per cent are at play. True, speculative ExxonMobil, BP and Royal Dutch until recently, chief executives ‘‘ the wholesale gain experience: in production, reversing recent of global shipments. Ivory Coast activity has added a bit of froth, Shell; miners including BHP dealt with rising commodities market has from physical trends to sell upstream assets. and cocoa; Brazil and sugar; the on both the upside and Billiton, Vale of Brazil and Rio prices by simply passing surged to a 34- forward buying Steelmakers, for example, are US and corn; Chile and copper downside. But some raw Tinto; and commodities traders increased costs to consumers. As year high so and the use of investing in iron ore and coking are some of the more extreme materials are not even traded on such as Glencore, Cargill and raw materials prices rise more roasters have primitive coal mines to cushion against pairings. Chief executives have financial markets and have still Vitol. But for most companies, and more, however, passing the hiked retail prices financial rising prices. Food producers discovered, in panic, that they are seen prices move sharply higher. the super-cycle is a problem. costs to consumers is proving three times over contracts, some have yet to start investing in not only exposed to price The cost of the CRB RIND index, Commodities procurement costs increasingly difficult, particularly the last 12 companies have farming but they are moving increases, but also that political, which tracks the cost of non- are rising, volatility is unprece - in fragile European economies. months ” moved to more closer to their suppliers, in some weather or operational problems exchange commodities, including dented and, in some cases, Now companies are learning complex cases providing credit to farmers could leave their business raw materials such as metal critical raw materials are in from airlines, which have system - policies, to secure output. without supplies. scrap, tallow and burlap, has desperately short supply. atically hedged against energy including the use of two- and The other area of action is the risen to an all-time high, above Commodities consumers can costs since the spike in oil prices three-way options. supply chain. Not only has the the peak of 2008. respond on two fronts: price during the Gulf War brought The food industry is a good price of commodities increased, “We are still ruled by Malthus: insurance, or hedging, should some of them to the brink of example of this trend. Large but some companies are also natural resources are scarce,” keep costs under reasonable bankruptcy. Companies are companies have launched facing localised shortages. The

14 15 1 1 - 0 1 0 2 e s a e r c n i 1 1 - 1 0 0 2 e s a e % r c n i 5 5 % + 0 l e 0 k c i 4 n + a Direct impact largest home appliances maker, o

c The surge in commodities prices announced in early February

o is not an abstract – they have an retail price increases of up to 10

c actual impact on consumers and per cent to cope with higher steel companies’ margins. Take wheat: prices. Other companies are the cost of bread has surged more following suit. than 10 per cent over the last year Fortunately, even in the midst and some companies, such as UK- of this prolonged commodities based Hovis, have to fight with super-cycle, it is worth supermarkets such as Tesco to remembering that in the world of Production has increase prices. The cost of raw materials, as in all other ‘‘become concen - Arabica coffee in the wholesale markets, cycles do turn. At some trated on a few market has surged to a 34-year point in the future, prices will single countries, high. The result? Roasters have stop moving higher. Experts with some exporters increased prices. For example, disagree on how long it will take, accounting for 30 to J.M. Smucker, which is behind and most believe the upward 40 per cent of global the popular Folgers coffee brand trend will last at least another shipments. Ivory and is seen as a price trendsetter, five years. Ultimately though, the Coast and cocoa; has hiked retail prices three times pattern will change: but by that Brazil and sugar; the over the past 12 months and has time, the plateau will almost US and corn; Chile warned a fourth increase could certainly be considerably higher and copper are be coming soon. than it was before the current some of the more But the impact goes beyond cycle began I extreme pairings ” food. The surge in iron ore – more than double over the past year – has filtered into higher steel costs and is putting huge pressure on everyday goods, from cars to washing machines. Electrolux, the world’s second-

16 1 1 - 0 1 0 2 e s a e r c n i 1 1 - 1 0 0 2 e s a e % r c n i 5 5 % + 0 l e 0 k c i 4 n + a Direct impact largest home appliances maker, o

c The surge in commodities prices announced in early February

o is not an abstract – they have an retail price increases of up to 10

16 In my opinion

Enter the private sector There is a long tradition of mistrust emanating from the NHS towards private companies, chiefly because supporters of publicly funded healthcare believe it is somehow immoral or inappropriate to combine health with profit. This argument has an emotional resonance but it simply does not stand up to scrutiny. As anyone involved in healthcare knows, all health providers are paid for their services and the best of them try to make a profit, although they may call it ‘a surplus’. The difference between state- owned providers, charities and privately operated companies is not how much capital they receive but what they do with the profit (or surplus) they generate. State-owned hospitals plough the money back into the business, charities reinvest it and the private sector distributes at least part of it to investors. But of course, the more profitable a business appears to be, the more support it will European health services face challenges receive from investors and the more it will be able to on every front. Populations are ageing, invest in improving its products and services. This is treatments are increasingly expensive and not sophisticated economics: it is common sense. state budgets are under pressure. The status quo is no longer an option. Some people believe healthcare is somehow David Worskett is the director of NHS Partners Network, which represents different from other industries. But there is no reason why it should be. Indeed, customer feedback private providers working with the UK’s NHS. He explains how the suggests most patients have little interest in the future could – and perhaps should – look. nature of the hospital they are visiting – they are far more concerned about the nature of the treatment they will be receiving. n 1948, when the UK National Health Service associated with hospital-acquired infections, The private sector has actually supported the NHS (NHS) was founded, most people did not live waiting lists, bad food and variable care. for decades. Hospices have always had a private Ibeyond the age of 70 and, when they fell acutely This is not a new problem; nor is it confined to the sector focus, private dental surgeries have supple- ill, little could be done for them. Hospitals did what UK. All across Europe, governments are grappling All across Europe, mented the NHS for many years and privately run they could but treatment was limited and, to put it with one fundamental issue: how to reconcile the governments are hospitals have a long tradition of helping large, bluntly, inexpensive. increasing demands of rising numbers of patients ‘‘ grappling with one public sector bodies when the need arises. Today, demographics are changing at an with the dwindling supply of state capital to fund fundamental issue: What has changed in the UK over the past few alarming rate. People routinely live until they are their needs. how to reconcile years is the introduction of Independent Sector well over 80 and the ability to treat chronic or acute Different countries are responding in different the increasing Treatment Centres (ISTCs), offering routine, non- conditions has improved dramatically. But these ways – and some seem to be far more successful demands of rising emergency surgical procedures, such as hip changes, laudable as they are, come at a price – a than others – but in every part of Europe change is numbers of replacements, cataract operations or MRI scans. rather high one. under way. The key challenge for governments and patients with the In theory, patients visiting their GP in the UK The NHS is creaking at the edges. Once held up as public health providers is how to manage that dwindling supply of should be offered a choice of treatment centres an example of publicly funded healthcare at its change in such a way that everyone, including the state capital to fund when a choice is available. This has taken time to finest, the UK health service is now too frequently end-user (the patient), derives maximum benefit. their needs ” come into effect, but there are signs that momentum

18 19 In my opinion

18 19 Countries such as Denmark, France and ‘‘ the Netherlands have is increasing. GPs were initially wary of The food is better, car parks have all adopted a much next year, and there are bound to be teething are more likely to remain rooted in and geared to recommending the unknown but, as time has gone sufficient spaces for patients and more pluralist problems, the mere fact that an economic regulator the past. But so much has changed in terms of what on and feedback has been positive, referrals have visitors, and patient feedback approach: some has been appointed should bring three huge health systems are required to do, and the money picked up. In 2010, for example, some 400,000 indicates that doctors, nurses treatment centres are benefits. available for them to do it, that the past can no patients chose to go to a private hospital or an ISTC and other healthcare staff tend state owned, some are First, it will make existing private sector operators longer be a guide to the future. for treatment. to be more sympathetic. Why? charitable institutions far more confident that they can plan for the long The private sector has a meaningful role to play in Because the staff are properly and some are privately term. Second, it will encourage new operators to national health systems and over time services such Numerous benefits incentivised, the centres tend to owned. Choice come into the sector, as barriers to entry are as the NHS will, hopefully, recognise the benefits This should not come as a surprise. Time and again, be efficiently run and the promotes competition lowered and a fair playing field is established. Third, that choice confers. Private operators will never patient response shows the private sector coming up managers know that if their and competition healthcare in the UK will begin to look more like dominate the health service but they can – and must promotes improvement. trumps. A recent survey indicated that 95 per cent of service is not of the highest other regulated industries, and will therefore – provide innovation in areas as wide-ranging as the It is not rocket science patients in private centres rated their care as calibre, they will lose business become easier for potential investors to evaluate in procurement of supplies, the provision of care and but it does work ” excellent or very good. NHS hospitals, on the other and, ultimately, go bust. terms of risk. Given the inevitable need for future the process by which care is delivered. hand, were rated excellent, very good or good by 87 The countries in Europe investment, and the strain on traditional public If we are to preserve the per cent of patients. offering the best healthcare know this. Countries financing models, this positive shift in the sector’s things we value in the This is not to downplay the role of large, full- such as Denmark, France and the Netherlands have appeal to investors may be the most significant NHS, we need to service hospitals, offering Accident & Emergency all adopted a much more pluralist approach: some change of all. have a far more services and all the back-up facilities that these treatment centres are state owned, some are balanced mix New operators, disciplined by necessitate. But specialist centres have certain charitable institutions and some are privately Bringing new perspectives between public the need to generate investor advantages that are only dreamed of by these owned. The state is the biggest purchaser but it will The involvement of new operators is absolutely and private ‘‘ returns, are much more likely monolithic organisations. buy from the provider offering the best value and critical. The NHS is a pretty good technical operators. And to spot these opportunities Specialist centres do not have to respond to the the best service. Choice promotes competition and innovator. But, like most large incumbents, NHS we have to have and help publicly funded unexpected. They can plan operations in advance competition promotes improvement. It is not rocket providers often tend to believe in doing things the an economic and healthcare services keep and deliver them on schedule. And they do not have science but it does work. way they have always been done – process innova - regulatory pace with increased hospital-acquired infections floating through their And the hope is it will begin to work in the UK, tion is not part of their DNA. Yet process innovation framework that is demands and costs. Large, wards. They are also invariably better particularly following the government’s is desperately needed to make the healthcare distanced from monopolistic incumbents are designed, more conveniently located decision to create a new health sector system more efficient and cost-effective. And this is political whims and more likely to remain rooted and more convivial economic regulator, Monitor, which will where new operators can really make a difference. prejudices so that in and geared to the past ” establishments. oversee the provision of NHS care, Coming to the industry with fresh eyes, they can private sector ensure continuity of essential devise new approaches that will, literally, save operators will feel services, set prices for billions of pounds. comfortable and investors will feel prepared to treatment and promote The start made by relatively new entrants on invest. Other countries in Europe have proved the competition where moving care out of hospitals and into people’s pluralist model works and the UK simply has to join appropriate. homes is a good example. A study of the effects of them if we want our health service to retain – or This is one of doing just four procedures at home across the UK regain – the reputation for excellence enjoyed for so the most suggests that this could cut NHS costs by £1.25 many decades. important develop - billion a year. That’s just four procedures. Of course, If the reforms initiated by the government bear ments in the UK many treatments still require hospital care but fruit, the health service could be more robust, more healthcare increasing numbers do not – certain forms of effective and more caring in 10 years’ time than it is system for chemotherapy, for example, which once required today. The buy-side will be able to procure more decades. Even several days in hospital, can now be done at home. efficiently and obtain better value, there will be though the new New operators, disciplined by the need to more innovation, and customers, be they the health sector generate investor returns, are much more likely to government or the patient, will have more choice. regulator will spot these opportunities and help publicly funded This is the only logical way forward – for the not become healthcare services keep pace with increased public sector, for the private sector and, of course, operational until demands and costs. Large, monopolistic incumbents for patients I

20 21 Countries such as Denmark, France and ‘‘ the Netherlands have is increasing. GPs were initially wary of The food is better, car parks have all adopted a much next year, and there are bound to be teething are more likely to remain rooted in and geared to recommending the unknown but, as time has gone sufficient spaces for patients and more pluralist problems, the mere fact that an economic regulator the past. But so much has changed in terms of what on and feedback has been positive, referrals have visitors, and patient feedback approach: some has been appointed should bring three huge health systems are required to do, and the money picked up. In 2010, for example, some 400,000 indicates that doctors, nurses treatment centres are benefits. available for them to do it, that the past can no patients chose to go to a private hospital or an ISTC and other healthcare staff tend state owned, some are First, it will make existing private sector operators longer be a guide to the future. for treatment. to be more sympathetic. Why? charitable institutions far more confident that they can plan for the long The private sector has a meaningful role to play in Because the staff are properly and some are privately term. Second, it will encourage new operators to national health systems and over time services such Numerous benefits incentivised, the centres tend to owned. Choice come into the sector, as barriers to entry are as the NHS will, hopefully, recognise the benefits This should not come as a surprise. Time and again, be efficiently run and the promotes competition lowered and a fair playing field is established. Third, that choice confers. Private operators will never patient response shows the private sector coming up managers know that if their and competition healthcare in the UK will begin to look more like dominate the health service but they can – and must promotes improvement. trumps. A recent survey indicated that 95 per cent of service is not of the highest other regulated industries, and will therefore – provide innovation in areas as wide-ranging as the It is not rocket science patients in private centres rated their care as calibre, they will lose business become easier for potential investors to evaluate in procurement of supplies, the provision of care and but it does work ” excellent or very good. NHS hospitals, on the other and, ultimately, go bust. terms of risk. Given the inevitable need for future the process by which care is delivered. hand, were rated excellent, very good or good by 87 The countries in Europe investment, and the strain on traditional public If we are to preserve the per cent of patients. offering the best healthcare know this. Countries financing models, this positive shift in the sector’s things we value in the This is not to downplay the role of large, full- such as Denmark, France and the Netherlands have appeal to investors may be the most significant NHS, we need to service hospitals, offering Accident & Emergency all adopted a much more pluralist approach: some change of all. have a far more services and all the back-up facilities that these treatment centres are state owned, some are balanced mix New operators, disciplined by necessitate. But specialist centres have certain charitable institutions and some are privately Bringing new perspectives between public the need to generate investor advantages that are only dreamed of by these owned. The state is the biggest purchaser but it will The involvement of new operators is absolutely and private ‘‘ returns, are much more likely monolithic organisations. buy from the provider offering the best value and critical. The NHS is a pretty good technical operators. And to spot these opportunities Specialist centres do not have to respond to the the best service. Choice promotes competition and innovator. But, like most large incumbents, NHS we have to have and help publicly funded unexpected. They can plan operations in advance competition promotes improvement. It is not rocket providers often tend to believe in doing things the an economic and healthcare services keep and deliver them on schedule. And they do not have science but it does work. way they have always been done – process innova - regulatory pace with increased hospital-acquired infections floating through their And the hope is it will begin to work in the UK, tion is not part of their DNA. Yet process innovation framework that is demands and costs. Large, wards. They are also invariably better particularly following the government’s is desperately needed to make the healthcare distanced from monopolistic incumbents are designed, more conveniently located decision to create a new health sector system more efficient and cost-effective. And this is political whims and more likely to remain rooted and more convivial economic regulator, Monitor, which will where new operators can really make a difference. prejudices so that in and geared to the past ” establishments. oversee the provision of NHS care, Coming to the industry with fresh eyes, they can private sector ensure continuity of essential devise new approaches that will, literally, save operators will feel services, set prices for billions of pounds. comfortable and investors will feel prepared to treatment and promote The start made by relatively new entrants on invest. Other countries in Europe have proved the competition where moving care out of hospitals and into people’s pluralist model works and the UK simply has to join appropriate. homes is a good example. A study of the effects of them if we want our health service to retain – or This is one of doing just four procedures at home across the UK regain – the reputation for excellence enjoyed for so the most suggests that this could cut NHS costs by £1.25 many decades. important develop - billion a year. That’s just four procedures. Of course, If the reforms initiated by the government bear ments in the UK many treatments still require hospital care but fruit, the health service could be more robust, more healthcare increasing numbers do not – certain forms of effective and more caring in 10 years’ time than it is system for chemotherapy, for example, which once required today. The buy-side will be able to procure more decades. Even several days in hospital, can now be done at home. efficiently and obtain better value, there will be though the new New operators, disciplined by the need to more innovation, and customers, be they the health sector generate investor returns, are much more likely to government or the patient, will have more choice. regulator will spot these opportunities and help publicly funded This is the only logical way forward – for the not become healthcare services keep pace with increased public sector, for the private sector and, of course, operational until demands and costs. Large, monopolistic incumbents for patients I

20 21 In the spotlight

he internet has transformed ment in a quiet moment. They The enemy within the way we work and live. are attacks with serious financial T But it has also transformed implications, such as lost bank Cyber crime is the most virulent form of the criminal underworld. Cyber details, sensitive customer warfare has become one of the records and intellectual property. organised criminal activity today, targeting most dangerous tools in the Large companies reported an governments, companies and individuals. criminal armoury – a modern average of 45 breaches each last The consequences of an attack can be menace feared by governments year with the worst incidents, and industry worldwide. Policy - which can include allowing devastating, yet many of those affected do makers across the globe view clients’ personal or financial not even know they have been invaded. cyber crime as a serious threat to details to fall into the hands of national security; industry criminals, costing nearly leaders understand this form of £700,000. Just two years earlier, illegal activity can lead to the average number of breaches financial, reputational and was 15 and even the worst commercial losses. incidents cost less than Such is the danger posed by £200,000. The overall cost of cyber crime that some estimates cyber crime in the UK alone is £27 put the global cost to business at billion per year, and £21 billion of around $1 trillion annually. And, this loss is attributable to as reliance on the internet business, according to a recent increases worldwide, cyber crime government report conducted by is likely to become even more information consultants Detica. pervasive. Yet many businesses give little The Information Security thought to cyber security. Despite Breaches Survey 2010, carried the growing number of horror out by consultancy firm PwC, stories, companies still think they showed that 92 per cent of large are not a target. Their companies and 83 per cent of insouciance provides cyber small businesses had security criminals with the perfect incidents in the past year. environment to steal whatever These are not viruses which they want or need. can be rectified by the IT depart -

22 23 In the spotlight

22 23 Almost everyone has something of value to a cyber thief. If you have access to a ‘‘ company or personal bank account, information on new business tenders or customer information you have been entrusted to keep private, then your Websites information is valuable and your identity is ‘‘ themselves can worth stealing ” be compromised, either to steal data or spread malicious code. One well-known retailer, for example, recently suffered a huge The changing nature of they are highly Hackers tend to The risk to companies it has almost certainly breach of examples include cyber threats indiscriminate. exploit vulnerability This is not a problem limited to a lost customers who security, when attacks on Amazon Cyber attacks started out as ad At least they in a piece of few naive individuals: it is a feel they cannot trust it hackers invaded and PayPal, following hoc viruses designed primarily to seem to be. In reality however, software and install a virtual problem for companies, organisa - any more. its IT system to their decision to cause disruption, such as almost everyone has something backdoor in a computer, granting tions and governments. Perhaps In Britain, the steal customer withdraw support crashing computers or deleting of value to a cyber thief. Anyone them access and control. Once a the most serious form of attack is Information Commis - credit card details from the Wikileaks files – incidents that were with access to a company or vulnerability is discovered and a that of APT (Advanced Persistent sioner’s Office (ICO) over a suspected website. The group annoying but rarely devastating. personal bank account, informa - suitable invasion method Threat). This uploads code from now has the power to four-month responsible, which But in the past decade, as the tion on new business tenders or designed, the process is quickly rogue emails, websites or fine companies up to period, including called itself Christmas internet has come to underpin all customer information they have automated so an attack can be portable devices (such as mobile £500,000 for loss of ” Anonymous, claimed aspects of business and personal been entrusted to keep private mounted even by those without phones or BlackBerries) to gain personal data. Adding a DDoS attack was a life, the potential to profit from has valuable information and an specialist knowledge. continual intelligence on individ - insult to injury, the names of modern means of demonstration. cyber attacks has mushroomed identity worth stealing. Even Common attacks include uals or companies. Governments those it has fined are then and the approach has changed. those who do not have access to emails inviting the unsuspecting use such methods to monitor the displayed in an e-hall of shame, New technology means Attacks have become highly such information may still be computer user to click on a link, activities of groups they consider accentuating reputational loss. new threats sophisticated operations, aimed using a computer that can itself which takes them to a suspect a threat. Cyber criminals use the Direct Denial of Service The incidence and severity of at exploiting vulnerabilities in be used to launch untraceable website, or to a legitimate same methods to monitor (DDoS) attacks have also become attacks are increasing across software and using it surrepti - attacks on others who have even website via a suspect website. In confidential company or increasingly common over recent Europe and beyond, partly tiously to steal any data which more valuable data. the process, a malicious code is customer information and their months. These are more overt thanks to the quickly evolving has value. This includes credit Worryingly too, cyber crime is downloaded and access is attacks can be operational for attacks, whereby botnets (a nature of business technology. card details, company secrets much simpler than most people gained. Many attacks are fright - years without discovery. network of compromised Many businesses are critically that rivals will pay for, personal realise, even if it does require a eningly unsophisticated. One of Websites themselves can be computers – now in excess of 30 dependent on externally hosted information to enable identity certain level of expertise. the simplest, and still shockingly compromised, either to steal data million machines) inundate a software services accessed over theft or private information that Techniques evolved over the effective, methods is the phishing or spread malicious code. One website with information to the the internet. Social networking can be used for targeted social years allow hackers to access email claiming to be from a bank well-known retailer, for example, point where it cannot cope. Given sites are increasingly important engineering attacks. thousands of computers at a and requesting account details. recently suffered a huge breach companies’ reliance on websites to business. Many companies use These attacks are designed to time, acquiring administrative of security, when hackers for business, making a site Voice Over IP telephony, which be undetectable. They sit on a privileges, which give them the invaded its IT system to steal unavailable, even for a few hours, enables them to transmit computer quietly sending power to do whatever they like customer credit card details over can be very costly. telephone calls over the internet, information out to servers that with other people’s machines – a suspected four-month period, DDoS has become the and even more businesses use are placed on the internet specifi - usually using them to attack or including Christmas. Not only did preferred tool of activists (or wireless networks. cally to receive it. They do it night spam others or to monitor their the retailer lose valuable online hacktivists) protesting against New systems are introduced to and day; week in, week out; and data for anything of value. business while its site was down, corporate behaviour. Recent meet changing demands, but in

24 25 Almost everyone has something of value to a cyber thief. If you have access to a ‘‘ company or personal bank account, information on new business tenders or customer information you have been entrusted to keep private, then your Websites information is valuable and your identity is ‘‘ themselves can worth stealing ” be compromised, either to steal data or spread malicious code. One well-known retailer, for example, recently suffered a huge The changing nature of they are highly Hackers tend to The risk to companies it has almost certainly breach of examples include cyber threats indiscriminate. exploit vulnerability This is not a problem limited to a lost customers who security, when attacks on Amazon Cyber attacks started out as ad At least they in a piece of few naive individuals: it is a feel they cannot trust it hackers invaded and PayPal, following hoc viruses designed primarily to seem to be. In reality however, software and install a virtual problem for companies, organisa - any more. its IT system to their decision to cause disruption, such as almost everyone has something backdoor in a computer, granting tions and governments. Perhaps In Britain, the steal customer withdraw support crashing computers or deleting of value to a cyber thief. Anyone them access and control. Once a the most serious form of attack is Information Commis - credit card details from the Wikileaks files – incidents that were with access to a company or vulnerability is discovered and a that of APT (Advanced Persistent sioner’s Office (ICO) over a suspected website. The group annoying but rarely devastating. personal bank account, informa - suitable invasion method Threat). This uploads code from now has the power to four-month responsible, which But in the past decade, as the tion on new business tenders or designed, the process is quickly rogue emails, websites or fine companies up to period, including called itself Christmas internet has come to underpin all customer information they have automated so an attack can be portable devices (such as mobile £500,000 for loss of ” Anonymous, claimed aspects of business and personal been entrusted to keep private mounted even by those without phones or BlackBerries) to gain personal data. Adding a DDoS attack was a life, the potential to profit from has valuable information and an specialist knowledge. continual intelligence on individ - insult to injury, the names of modern means of demonstration. cyber attacks has mushroomed identity worth stealing. Even Common attacks include uals or companies. Governments those it has fined are then and the approach has changed. those who do not have access to emails inviting the unsuspecting use such methods to monitor the displayed in an e-hall of shame, New technology means Attacks have become highly such information may still be computer user to click on a link, activities of groups they consider accentuating reputational loss. new threats sophisticated operations, aimed using a computer that can itself which takes them to a suspect a threat. Cyber criminals use the Direct Denial of Service The incidence and severity of at exploiting vulnerabilities in be used to launch untraceable website, or to a legitimate same methods to monitor (DDoS) attacks have also become attacks are increasing across software and using it surrepti - attacks on others who have even website via a suspect website. In confidential company or increasingly common over recent Europe and beyond, partly tiously to steal any data which more valuable data. the process, a malicious code is customer information and their months. These are more overt thanks to the quickly evolving has value. This includes credit Worryingly too, cyber crime is downloaded and access is attacks can be operational for attacks, whereby botnets (a nature of business technology. card details, company secrets much simpler than most people gained. Many attacks are fright - years without discovery. network of compromised Many businesses are critically that rivals will pay for, personal realise, even if it does require a eningly unsophisticated. One of Websites themselves can be computers – now in excess of 30 dependent on externally hosted information to enable identity certain level of expertise. the simplest, and still shockingly compromised, either to steal data million machines) inundate a software services accessed over theft or private information that Techniques evolved over the effective, methods is the phishing or spread malicious code. One website with information to the the internet. Social networking can be used for targeted social years allow hackers to access email claiming to be from a bank well-known retailer, for example, point where it cannot cope. Given sites are increasingly important engineering attacks. thousands of computers at a and requesting account details. recently suffered a huge breach companies’ reliance on websites to business. Many companies use These attacks are designed to time, acquiring administrative of security, when hackers for business, making a site Voice Over IP telephony, which be undetectable. They sit on a privileges, which give them the invaded its IT system to steal unavailable, even for a few hours, enables them to transmit computer quietly sending power to do whatever they like customer credit card details over can be very costly. telephone calls over the internet, information out to servers that with other people’s machines – a suspected four-month period, DDoS has become the and even more businesses use are placed on the internet specifi - usually using them to attack or including Christmas. Not only did preferred tool of activists (or wireless networks. cally to receive it. They do it night spam others or to monitor their the retailer lose valuable online hacktivists) protesting against New systems are introduced to and day; week in, week out; and data for anything of value. business while its site was down, corporate behaviour. Recent meet changing demands, but in

24 25 Business is changing rapidly ‘‘and the area with the most potential – and the greatest security risk – is mobile technology” the rush to bring them to market do they know if they are, and always be encrypted and The future is mobile they are not always secure. Add how should they deal with the password protected. We do not just have to worry to this the ease of developing threat? Sadly, there is no simple Companies must also be aware about cyber attacks in the here new tools, from iPad apps to answer and no way to be 100 per their actions can have and now but also prepare for the open source software services, cent secure. But businesses can consequences online just as in the future. Business is changing and companies face a security substantially reduce the chance real world. Poor ethical records, rapidly and the area with the minefield full of thousands of of attack and mitigate the controversial decisions or actions most potential – and the greatest vulnerabilities that offer covert damage if an attack occurs. that upset other countries, security risk – is mobile ways into their IT systems. Anti-virus software and companies or individuals can technology. firewalls remain an essential part lead to damaging cyber attacks, Mobiles are increasingly used Staying safe online of the armoury, but they are not a which can be impossible to for business and pose many of the In 2010 the first European cyber complete solution. Instead, a top- rebuff. These days, diplomacy is same threats as existing technolo - exercise was staged. Supporting down security policy is increasingly important in a gies. But, more than any desktop, cyber-security preparedness is an recommended, implemented company’s public actions. they blur the boundary between EU priority, but the level of pan- throughout the company and Underpinning all this activity is work and personal life. European preparedness was mandated by a member of the a serious commitment to cyber Outside the working environ - mobile devices, found to be low and the exercise board delivering adequate security, which requires time and ment, phones, BlackBerries and represents a huge clearly showed the need for sanctions for failure. money. While the cost of iPads are often used to download security threat. A decade engagement with industry. Installing secure networks and breaches is huge and rising, unknown applications, visit ago this was the security This paints a worrying picture correctly disposing of storage expenditure to prevent them is unknown sites and click on links profession’s worst nightmare. for businesses. The latest devices are essential and must be decreasing – a risky strategy for in suspect emails, all of which can Now it is the de facto way technology is essential to modern done to an acceptable standard business. Cyber attacks are much transfer malicious software. If business works. business practices; a smart by qualified professionals. Not cheaper to address before they these devices are connected to Many companies invest time, website, a cool Facebook page clicking on suspect links or happen than afterwards, and the user’s workplace network, effort and capital developing and seriously. Across governments, and an informative Twitter feed emailing bank details, however, organisations responsible for that software can easily be protecting new products, and companies and other organisa - enhance reputation and drive is everyone’s responsibility. sensitive data about themselves transferred to the company work hard to ensure their tions, political and industry sales. Yet any of these sites could People need to understand the and their customers need to systems. An excellent example of customers have confidence in leaders need to ensure staff at at any moment cost the company value of data. Minimal copies realise this. this is Stuxnet – a self-replicating them by respecting their every level are educated about millions of pounds or do should be kept, and sensitive worm that derailed the Iranian confidence. This can be maligned the dangers of cyber crime. The irreparable damage to its reputa - information should not be stored nuclear programme after being with one click of a mouse. The fundamental point is simple: tion. on a portable device or open uploaded from a memory stick. danger is all too real so as cyber knowledge is power and it cannot So how do companies guard network unless absolutely Increased connectivity, security threats increase, it is slip into the wrong hands. Data against being compromised, how necessary. Where it is, it should combined with increasing use of imperative they are taken must be kept secure I

26 27 Business is changing rapidly ‘‘and the area with the most potential – and the greatest security risk – is mobile technology” the rush to bring them to market do they know if they are, and always be encrypted and The future is mobile they are not always secure. Add how should they deal with the password protected. We do not just have to worry to this the ease of developing threat? Sadly, there is no simple Companies must also be aware about cyber attacks in the here new tools, from iPad apps to answer and no way to be 100 per their actions can have and now but also prepare for the open source software services, cent secure. But businesses can consequences online just as in the future. Business is changing and companies face a security substantially reduce the chance real world. Poor ethical records, rapidly and the area with the minefield full of thousands of of attack and mitigate the controversial decisions or actions most potential – and the greatest vulnerabilities that offer covert damage if an attack occurs. that upset other countries, security risk – is mobile ways into their IT systems. Anti-virus software and companies or individuals can technology. firewalls remain an essential part lead to damaging cyber attacks, Mobiles are increasingly used Staying safe online of the armoury, but they are not a which can be impossible to for business and pose many of the In 2010 the first European cyber complete solution. Instead, a top- rebuff. These days, diplomacy is same threats as existing technolo - exercise was staged. Supporting down security policy is increasingly important in a gies. But, more than any desktop, cyber-security preparedness is an recommended, implemented company’s public actions. they blur the boundary between EU priority, but the level of pan- throughout the company and Underpinning all this activity is work and personal life. European preparedness was mandated by a member of the a serious commitment to cyber Outside the working environ - mobile devices, found to be low and the exercise board delivering adequate security, which requires time and ment, phones, BlackBerries and represents a huge clearly showed the need for sanctions for failure. money. While the cost of iPads are often used to download security threat. A decade engagement with industry. Installing secure networks and breaches is huge and rising, unknown applications, visit ago this was the security This paints a worrying picture correctly disposing of storage expenditure to prevent them is unknown sites and click on links profession’s worst nightmare. for businesses. The latest devices are essential and must be decreasing – a risky strategy for in suspect emails, all of which can Now it is the de facto way technology is essential to modern done to an acceptable standard business. Cyber attacks are much transfer malicious software. If business works. business practices; a smart by qualified professionals. Not cheaper to address before they these devices are connected to Many companies invest time, website, a cool Facebook page clicking on suspect links or happen than afterwards, and the user’s workplace network, effort and capital developing and seriously. Across governments, and an informative Twitter feed emailing bank details, however, organisations responsible for that software can easily be protecting new products, and companies and other organisa - enhance reputation and drive is everyone’s responsibility. sensitive data about themselves transferred to the company work hard to ensure their tions, political and industry sales. Yet any of these sites could People need to understand the and their customers need to systems. An excellent example of customers have confidence in leaders need to ensure staff at at any moment cost the company value of data. Minimal copies realise this. this is Stuxnet – a self-replicating them by respecting their every level are educated about millions of pounds or do should be kept, and sensitive worm that derailed the Iranian confidence. This can be maligned the dangers of cyber crime. The irreparable damage to its reputa - information should not be stored nuclear programme after being with one click of a mouse. The fundamental point is simple: tion. on a portable device or open uploaded from a memory stick. danger is all too real so as cyber knowledge is power and it cannot So how do companies guard network unless absolutely Increased connectivity, security threats increase, it is slip into the wrong hands. Data against being compromised, how necessary. Where it is, it should combined with increasing use of imperative they are taken must be kept secure I

26 27 Face to face

ike Parish, chief executive of Care UK, was always looking ahead and they liked that. So I was in south London recently, opening was able to combine a bit of vision with operational Mone of the company’s new medical sites, nitty-gritty, which I took for granted but which I the Junction Health Centre. Shortly after glad- discovered over the years was quite an unusual handing with local dignitaries, he took a wander combination,” says Parish. round the area and found himself outside Battersea The combination worked. National Freight Social Club. Corporation floated on the London Stock Exchange, “It was very nostalgic because I used to go there eventually becoming Exel, a FTSE 100 company. when I was a kid. I ended up meeting the chairman Parish moved swiftly up the ranks, ultimately sitting of the club and going inside, where we reminisced on the main board as divisional chief executive of about hiding under the snooker tables and messing the global industrial sector. around at the bar. I bought him a drink. It was 11 in In 2001, he left this global, well-resourced and the morning so I didn’t have one,” says Parish. well-managed business to become chief executive of Parish describes himself as “a working-class boy Care UK, a small, quoted company with a turnover made good”, brought up on council estates in of just £70 million. Brixton and Battersea and now running a social care and healthcare group with a £450 million turnover. “My Dad was a bit of a ‘Del Boy’ and my brothers and cousins were in and out of trouble and even jail. But I had a different personality and influences, I guess,” he says. The different personality took Parish from Battersea Grammar School to Leicester University, where he studied politics and became deputy president of the Students’ Union. “I actually got some good business experience there. It was a very services-based union,” he explains. After graduating, Parish If you are going to spent nearly 20 years at the be an outsourcer global logistics group Exel, ‘‘ with any kind of working with businesses ambition, you including Tesco, Volkswagen need to “I was getting bored. I wanted to be a chief and the brewer Bass. understand your executive, not a divisional head. I wanted a change; Taking care Starting out as a graduate I wanted to be stimulated and I wanted to move to a customer’s sector Mike Parish used to handle global logistics for large multinationals. trainee at the newly privatised at least as well as different sector with real growth potential,” says firm, National Freight Corpora - they do ” Parish. Now he is chief executive of UK social and healthcare company tion, he was running his own “It was probably arrogant or naive of me to want Care UK, spending time at hospitals and homes for the elderly. truck depot at 22, thanks to an entrepreneurial to move to a new industry but I guess the trade-off business culture where he found he could thrive. was size,” he adds. “I was a bit of a high-flier in that world. I could Ten years ago, when Parish joined Care UK, it was mix with the rough-and-tough employees and the an underdeveloped business, a bit player in the work-hard, play-hard managers of the transport fragmented UK social care industry. industry. And I guess most of all I was always very “It was homespun, quite paternalistic and comp- empathetic with my customers and very strategic. I letely lacking in corporate structure,” says Parish.

28 29 Face to face

28 29 We give our staff very strong ‘‘ glasses so they can’t see properly. We put white noise in their ears. He set about inculcating some basic changes, into people’s homes and We put popcorn in 80:20. Now it is more like 50:50 and, in future, another, whether it be colour, creed, social or even appointing a new finance director, appointing the administering a range of their slippers so Parish believes it will be 40:60. capability prejudice. I don’t want to sound evangel - first ever human resources director at the company services. they can’t walk “Our ambition is to provide care for those self- ical but eradicating prejudice spurs me on. Helping and reviewing strategy. “When I first came into and strap their funders so we want to double the number of care disabled people do normal things like shopping or “Social care may have been a new sector for me this industry, I wanted to fingers together homes we have from 60 to 120 in the next five years. enabling them to get jobs can really bring them joy,” but during my years at Exel, I had become very good learn about it so I went and as if they have We will mostly do this by building new homes as the he says. at analysing markets. If you are going to be an listened to people who did arthritis. People quality of existing homes is not particularly good,” Parish is the first to admit that running a business outsourcer with any kind of ambition, you need to know about it. Everyone said tend to have says Parish. catering for the physically and psychologically understand your customer’s sector at least as well as there were too many of the multiple unwell or disabled is not for everyone. they do and, if you are involved in supply chain wrong type of care home. conditions so it Quality is of paramount importance “It can be a bit unsettling and some people will management, probably better than they do. So I There were lots of people in helps our carers “There has been a tradition of trying to contain find it too uncomfortable. You can’t be a high- knew how to analyse industries and work out strat- homes who could have been to understand people with Alzheimer’s either by ‘the chemical falutin’ chief executive, who doesn’t want to get egies. Being an operator all my life, I knew how to supported by domiciliary what it feels like ” cosh’ or isolating them. This is really inhuman. If involved. You have to be able to be very natural. run businesses and, critically, I always knew how to care but there were not you embrace people’s needs and deal with them Dementia can be off-putting but people want to get under customers’ skin and find out what issues enough top-notch homes. Homes were typically positively and productively, you can help them communicate and often crave physical contact. You and objectives they faced. These were all very converted Edwardian properties, that were not and really improve their quality of life and reduce the have to be very patient and genuinely interested in transferable skills,” says Parish. are not suitable for the really frail. Against that, the confusion and frustration they feel,” he explains. them as individuals. I found it difficult at first, but ageing population and the increase in dementia Helping people with dementia is not easy but now I’m my natural self when they put their arms The biggest issue was the size of meant there was a greater need for modern, Parish believes staff need to empathise with their round me,” he says. the business purpose-built homes, catering for people with a patients, so training sessions often involve Not that Care UK is a charitable enterprise. It is “It was like going back 20 years. I’ve never been a higher degree of dependency,” says Parish. replicating at least some of the physical symptoms run for profit and Parish admits caring for patients remote manager and never bothered much with the Parish decided to focus Care UK on homes for suffered by the elderly. with dementia makes sound trappings of corporate life. I was quite happy people with the highest level of needs because “We give them very strong glasses so they can’t commercial sense. We are signifi - making the tea and still do but even so, it was a big he firmly believed less dependent senior citizens see properly. We put white noise in their ears. We “It is a must-buy, which cantly the best change. Overnight, I became the company expert at would be encouraged to stay in their own homes as put popcorn in their slippers so they can’t walk and makes it very defensive and ‘‘ rated large PowerPoint – most people had only ever worked in time went on and public funding became less strap their fingers together as if they have arthritis. provider. I believe people with dementia tend very small companies,” he says. available. But he chose to offer high-quality domicil - People tend to have multiple conditions so it helps quality is the to stay in care for longer so Nonetheless, Parish says there were a lot of iary care as well – “so we could follow the market in our carers to understand what it feels like,” Parish number one differ - our residents are with us for talented people in the organisation and around half both directions”. explains. entiator in all an average of two and a half the senior management stayed on for several years At first he was lambasted by rival care providers industries but years while other care after he joined. New people were brought in but a but his team’s farsightedness proved correct. As The strategy works particularly in this providers typically have number were promoted from within. local authority budgets have come under growing “According to the independent regulator, the Care one. And quality average stays of about nine “It is always better developing people in a pressure, the elderly have to be both poorer and Quality Commission, 97 per cent of our homes are costs less too. If months,” he says. business than constantly chopping and changing,” frailer before the public sector will pay for their excellent or good. We are significantly the best- you invest This combination of says Parish. residential care. This has prompted an increase in rated large provider. I believe quality is the number resources at the pragmatism and vision took Over the past 10 years, Parish has developed both self-funded care and another strategic development one differentiator in all industries but particularly in beginning, you are Parish into a brand new the people at Care UK and the business itself. The for Care UK. this one. And quality costs less too. If you invest less likely to be sector just a few years ago – company is now a leading provider of health and “More and more people are funding their own resources at the source of problems, you are less confronted by healthcare. social care in the UK, working extensively with the care or their relatives are helping them. This has likely to be confronted by the distress and cost of challenging “I bluffed my way into a public sector and building a reputation for high- prompted a greater expectation of quality and high challenging behaviour,” says Parish. behaviour ” presentation being given by quality, cost-effective care. standards. Our strategy has evolved with this trend Care UK also cares for people with severe learning Tony Blair on introducing Just over half the group’s turnover comes from and we are moving to embrace the self-funder, disabilities and the mentally ill, including former more competition into the health service. social care, which centres primarily on people with alongside publicly funded care,” says Parish. prisoners or drug abusers. Parish applies the same Afterwards, he started a tender process to build new dementia. Care UK has 60 homes dedicated to the In the past, the ratio of publicly-funded to self- philosophy of quality and empathy to these divisions. hospitals and we were the largest winner from that elderly and provides domiciliary care as well, going funded care among elderly people was around “We all live with prejudices of one kind or procurement process, despite having no direct

30 31 We give our staff very strong ‘‘ glasses so they can’t see properly. We put white noise in their ears. He set about inculcating some basic changes, into people’s homes and We put popcorn in 80:20. Now it is more like 50:50 and, in future, another, whether it be colour, creed, social or even appointing a new finance director, appointing the administering a range of their slippers so Parish believes it will be 40:60. capability prejudice. I don’t want to sound evangel - first ever human resources director at the company services. they can’t walk “Our ambition is to provide care for those self- ical but eradicating prejudice spurs me on. Helping and reviewing strategy. “When I first came into and strap their funders so we want to double the number of care disabled people do normal things like shopping or “Social care may have been a new sector for me this industry, I wanted to fingers together homes we have from 60 to 120 in the next five years. enabling them to get jobs can really bring them joy,” but during my years at Exel, I had become very good learn about it so I went and as if they have We will mostly do this by building new homes as the he says. at analysing markets. If you are going to be an listened to people who did arthritis. People quality of existing homes is not particularly good,” Parish is the first to admit that running a business outsourcer with any kind of ambition, you need to know about it. Everyone said tend to have says Parish. catering for the physically and psychologically understand your customer’s sector at least as well as there were too many of the multiple unwell or disabled is not for everyone. they do and, if you are involved in supply chain wrong type of care home. conditions so it Quality is of paramount importance “It can be a bit unsettling and some people will management, probably better than they do. So I There were lots of people in helps our carers “There has been a tradition of trying to contain find it too uncomfortable. You can’t be a high- knew how to analyse industries and work out strat- homes who could have been to understand people with Alzheimer’s either by ‘the chemical falutin’ chief executive, who doesn’t want to get egies. Being an operator all my life, I knew how to supported by domiciliary what it feels like ” cosh’ or isolating them. This is really inhuman. If involved. You have to be able to be very natural. run businesses and, critically, I always knew how to care but there were not you embrace people’s needs and deal with them Dementia can be off-putting but people want to get under customers’ skin and find out what issues enough top-notch homes. Homes were typically positively and productively, you can help them communicate and often crave physical contact. You and objectives they faced. These were all very converted Edwardian properties, that were not and really improve their quality of life and reduce the have to be very patient and genuinely interested in transferable skills,” says Parish. are not suitable for the really frail. Against that, the confusion and frustration they feel,” he explains. them as individuals. I found it difficult at first, but ageing population and the increase in dementia Helping people with dementia is not easy but now I’m my natural self when they put their arms The biggest issue was the size of meant there was a greater need for modern, Parish believes staff need to empathise with their round me,” he says. the business purpose-built homes, catering for people with a patients, so training sessions often involve Not that Care UK is a charitable enterprise. It is “It was like going back 20 years. I’ve never been a higher degree of dependency,” says Parish. replicating at least some of the physical symptoms run for profit and Parish admits caring for patients remote manager and never bothered much with the Parish decided to focus Care UK on homes for suffered by the elderly. with dementia makes sound trappings of corporate life. I was quite happy people with the highest level of needs because “We give them very strong glasses so they can’t commercial sense. We are signifi - making the tea and still do but even so, it was a big he firmly believed less dependent senior citizens see properly. We put white noise in their ears. We “It is a must-buy, which cantly the best change. Overnight, I became the company expert at would be encouraged to stay in their own homes as put popcorn in their slippers so they can’t walk and makes it very defensive and ‘‘ rated large PowerPoint – most people had only ever worked in time went on and public funding became less strap their fingers together as if they have arthritis. provider. I believe people with dementia tend very small companies,” he says. available. But he chose to offer high-quality domicil - People tend to have multiple conditions so it helps quality is the to stay in care for longer so Nonetheless, Parish says there were a lot of iary care as well – “so we could follow the market in our carers to understand what it feels like,” Parish number one differ - our residents are with us for talented people in the organisation and around half both directions”. explains. entiator in all an average of two and a half the senior management stayed on for several years At first he was lambasted by rival care providers industries but years while other care after he joined. New people were brought in but a but his team’s farsightedness proved correct. As The strategy works particularly in this providers typically have number were promoted from within. local authority budgets have come under growing “According to the independent regulator, the Care one. And quality average stays of about nine “It is always better developing people in a pressure, the elderly have to be both poorer and Quality Commission, 97 per cent of our homes are costs less too. If months,” he says. business than constantly chopping and changing,” frailer before the public sector will pay for their excellent or good. We are significantly the best- you invest This combination of says Parish. residential care. This has prompted an increase in rated large provider. I believe quality is the number resources at the pragmatism and vision took Over the past 10 years, Parish has developed both self-funded care and another strategic development one differentiator in all industries but particularly in beginning, you are Parish into a brand new the people at Care UK and the business itself. The for Care UK. this one. And quality costs less too. If you invest less likely to be sector just a few years ago – company is now a leading provider of health and “More and more people are funding their own resources at the source of problems, you are less confronted by healthcare. social care in the UK, working extensively with the care or their relatives are helping them. This has likely to be confronted by the distress and cost of challenging “I bluffed my way into a public sector and building a reputation for high- prompted a greater expectation of quality and high challenging behaviour,” says Parish. behaviour ” presentation being given by quality, cost-effective care. standards. Our strategy has evolved with this trend Care UK also cares for people with severe learning Tony Blair on introducing Just over half the group’s turnover comes from and we are moving to embrace the self-funder, disabilities and the mentally ill, including former more competition into the health service. social care, which centres primarily on people with alongside publicly funded care,” says Parish. prisoners or drug abusers. Parish applies the same Afterwards, he started a tender process to build new dementia. Care UK has 60 homes dedicated to the In the past, the ratio of publicly-funded to self- philosophy of quality and empathy to these divisions. hospitals and we were the largest winner from that elderly and provides domiciliary care as well, going funded care among elderly people was around “We all live with prejudices of one kind or procurement process, despite having no direct

30 31 Market insight Changing the experience. It was incredibly challenging but we really worked at it, much harder than most other contenders,” landscape he says. Six years on and Care UK is the largest independent health care provider to the NHS, providing more hip and Roads, ports and nfrastructure is the plumbing Petersburg, which cost €1.25 knee replacements than any power stations used of the pan-European economy. billion and was Russia’s first ever public or private organisation to be considered dull IIt makes the EU function. PPP. There are projects affected in England. and boring. Not any Unglamorous, mainly. Vital, by financial or economic “Typically, we are lower mor e. Nowadays, without a doubt. Sometimes its challenges: the Catalonian cost and better quality than infrastructure is importance is forgotten but today shadow toll road Cedinsa in the NHS. Over the past five or the metaphorical plumbers, or at Spain, funded during the six years, for example, we coming into its own. least their managers and downturn at a time of falling have done well over 100,000 Investors are warming financiers, have become sexy. traffic volumes or, in telecoms, joint replacements and we to the asset class It is difficult to open the the GSM upgrade on 14,000 have not had a single case of while governments financial pages and not read kilometres of the French RFF rail MRSA. Partly, that is because are increasingly keen about an infrastructure fund network, complicated by the our operations are scheduled Name: Mike Parish to involve the private either being launched or raising insolvency of the telecoms so we can ensure patients are Age: 51 capital. The number of infrastruc - hardware provider. Nationality: British sector in their large- free of MRSA before they scale, costly projects. ture funds in the EU is literally There have been instances of come in but mostly it is just Education countless, including listed, political complication too, such better quality and hygiene in Battersea Grammar and Care UK was taken private by Bridgepoint last unlisted and private entities. as the signing of the Birmingham hospital,” says Parish. Leicester University year and the strategy is to develop the business These funds need something to highways PFI, securing the Parish believes the NHS First jobs by rolling out more care homes and expanding feed on: the infrastructure future maintenance of the UK could be run far more slickly Delivering post, flipping the healthcare division. projects of the future, those city’s streets. This was beset with if certain changes were burgers, packing clothes “Bridgepoint has a genuine belief in quality, currently in planning and uncertainty at the last moment, and loading them on to introduced and, particularly, my Dad’s van which is absolutely essential for me. Now that construction and those already in when both the national govern - if vested interests were less they have invested in us, we can plan for the operation. And there is no ment and local council changed. Family powerful. Three children long term and get on with developing care shortage of them. The stand-out Each had fundamentally “I am not anti-union, aged 23, 21 and 18 homes and our strategy for healthcare, which I infrastructure investments of different funding imperatives doctor or NHS management Car am convinced is the right thing to do. The timing recent months not only indicate from their predecessors, causing by any means but I am anti- None at present, is good as well, because other players have been the great variety of projects being tension on several levels. self interest and bad Porsche 911 on order sidelined by their own issues,” says Parish. undertaken across the EU but Ultimately though, the deal was behaviour and there is too Finest achievement When Parish first joined Care UK, one of the also give an insight into what is done and is now seen as a much of it in the NHS. We Embedding a culture at attractions was running a company small driving markets, and the pitfalls template for other regional hubs. actually think about our Care UK that combines enough that he could shape the culture. that can affect investors. But infrastructure funds also patients. We have to earn our quality and “I wanted it to be meritocratic, informal, There are the staples of cover energy, ranging from commercialism right to exist every single day genuine, non-political and committed to good traditional infrastructure: the traditional carbon fuels to wind because we are dispensable Greatest lesson quality. When I look around the business today, Portuguese end of the Lisbon to farms and other sustainable Never allow good so we have to be better and returns in the past to that ethos is embedded in the culture and that Madrid high-speed rail link or the energy schemes. The Nord more cost-efficient,” Parish make you complacent makes me very proud. I don’t want to lose it and I public-private partnership- Stream gas pipeline under the explains. about the future think with Bridgepoint, we will retain it,” he says I funded airport at Pulkovo, St Baltic Sea between Russia and

32 33 Market insight Changing the experience. It was incredibly challenging but we really worked at it, much harder than most other contenders,” landscape he says. Six years on and Care UK is the largest independent health care provider to the NHS, providing more hip and Roads, ports and nfrastructure is the plumbing Petersburg, which cost €1.25 knee replacements than any power stations used of the pan-European economy. billion and was Russia’s first ever public or private organisation to be considered dull IIt makes the EU function. PPP. There are projects affected in England. and boring. Not any Unglamorous, mainly. Vital, by financial or economic “Typically, we are lower mor e. Nowadays, without a doubt. Sometimes its challenges: the Catalonian cost and better quality than infrastructure is importance is forgotten but today shadow toll road Cedinsa in the NHS. Over the past five or the metaphorical plumbers, or at Spain, funded during the six years, for example, we coming into its own. least their managers and downturn at a time of falling have done well over 100,000 Investors are warming financiers, have become sexy. traffic volumes or, in telecoms, joint replacements and we to the asset class It is difficult to open the the GSM upgrade on 14,000 have not had a single case of while governments financial pages and not read kilometres of the French RFF rail MRSA. Partly, that is because are increasingly keen about an infrastructure fund network, complicated by the our operations are scheduled Name: Mike Parish to involve the private either being launched or raising insolvency of the telecoms so we can ensure patients are Age: 51 capital. The number of infrastruc - hardware provider. Nationality: British sector in their large- free of MRSA before they scale, costly projects. ture funds in the EU is literally There have been instances of come in but mostly it is just Education countless, including listed, political complication too, such better quality and hygiene in Battersea Grammar and Care UK was taken private by Bridgepoint last unlisted and private entities. as the signing of the Birmingham hospital,” says Parish. Leicester University year and the strategy is to develop the business These funds need something to highways PFI, securing the Parish believes the NHS First jobs by rolling out more care homes and expanding feed on: the infrastructure future maintenance of the UK could be run far more slickly Delivering post, flipping the healthcare division. projects of the future, those city’s streets. This was beset with if certain changes were burgers, packing clothes “Bridgepoint has a genuine belief in quality, currently in planning and uncertainty at the last moment, and loading them on to introduced and, particularly, my Dad’s van which is absolutely essential for me. Now that construction and those already in when both the national govern - if vested interests were less they have invested in us, we can plan for the operation. And there is no ment and local council changed. Family powerful. Three children long term and get on with developing care shortage of them. The stand-out Each had fundamentally “I am not anti-union, aged 23, 21 and 18 homes and our strategy for healthcare, which I infrastructure investments of different funding imperatives doctor or NHS management Car am convinced is the right thing to do. The timing recent months not only indicate from their predecessors, causing by any means but I am anti- None at present, is good as well, because other players have been the great variety of projects being tension on several levels. self interest and bad Porsche 911 on order sidelined by their own issues,” says Parish. undertaken across the EU but Ultimately though, the deal was behaviour and there is too Finest achievement When Parish first joined Care UK, one of the also give an insight into what is done and is now seen as a much of it in the NHS. We Embedding a culture at attractions was running a company small driving markets, and the pitfalls template for other regional hubs. actually think about our Care UK that combines enough that he could shape the culture. that can affect investors. But infrastructure funds also patients. We have to earn our quality and “I wanted it to be meritocratic, informal, There are the staples of cover energy, ranging from commercialism right to exist every single day genuine, non-political and committed to good traditional infrastructure: the traditional carbon fuels to wind because we are dispensable Greatest lesson quality. When I look around the business today, Portuguese end of the Lisbon to farms and other sustainable Never allow good so we have to be better and returns in the past to that ethos is embedded in the culture and that Madrid high-speed rail link or the energy schemes. The Nord more cost-efficient,” Parish make you complacent makes me very proud. I don’t want to lose it and I public-private partnership- Stream gas pipeline under the explains. about the future think with Bridgepoint, we will retain it,” he says I funded airport at Pulkovo, St Baltic Sea between Russia and

32 33 Germany is an example of the made a valuable contribution to power generation greener,” he At the same time, private sector part-privatisation, it helps the operators are asking for more former. Costing €6.4 billion, it these schemes and will almost says. investment appetite presents an Spanish finances and represents reassurance or even direct was an enormous undertaking in certainly continue to do so, Some commentators have attractive opportunity to sell a rare opportunity for infrastruc - subsidies. scale and cost and a major provided projects are asset- suggested the financial crisis existing assets to new owners. ture investors. This is particularly “Risk allocation has always strategic milestone, the comple - backed and offer long-term, undermined the appeal of Governments can see it as an pertinent as the financial crisis been a key issue, never more so tion of which involved stable returns. But, if many infrastructure investment but has underlined than now,” says Williams. The overcoming logistical and projects have been completed in Williams points out that, rather The €6.4 billion Nord Stream gas pipeline under infrastructure’s shape of infrastructure project political hurdles and satisfying recent years, many more are in than hindering the market, the ‘‘ the Baltic Sea between Russian and Germany relative funding is also shifting, he says. stakeholders as diverse as the pipeline, highlighting the economic downturn has concen - was an enormous undertaking strategically, in resilience as an “Infrastructure investment has London bankers and Polish huge demand for new and trated the minds of governments scale and in cost. It was achieved by overcoming asset class. traditionally been leveraged. fishermen. improved infrastructure across and investors. “Things have logistical and political hurdles and satisfying “The sector Debt will always have a sensible At the more exotic end of the Europe. changed a lot in the last decade, stakeholders as diverse as London bankers and has not been role to play but ideally deals energy market, there are the Bridgepoint director Adrian not least in the financial markets. Polish fishermen ” immune during should be debt-enabled rather emerging plays in greentech or Williams says the downturn debt-driven. We have no doubt cleantech: the sprawling solar the last few The downturn has put many governments in a opportunity to free themselves but many infrastructure assets there will continue to be innova - power fields of the Andromeda years have ‘‘ situation where they might have to find alternative from spending commitments and have performed well and the tion around deal structuring but and Rovigo projects in Italy and identified a real ways of funding infrastructure. At the same time, simultaneously raise cash,” availability of debt finance has investors always need to think the giant €1 billion C-Power wind infrastructure private sector interest presents an attractive opportu - explains Williams. remained strong. There is an hard about appropriate levels of farm off Belgium, which in time backlog in both nity to sell existing assets to third-party investors ” For example, the Spanish understanding that infrastructure debt and the resilience of assets will be dwarfed by other massive developing EU government intends to sell a 49 has defensive qualities and, over being acquired.” projects planned off the eastern markets and the mature markets There has been a recognition that per cent stake in Aena, the state- the last 10 years, asset valuations Overall, however, infrastruc - coastlines of England and of Western Europe. the risk-reward profile of controlled airports authority. have continued to rise,” says ture has emerged as a meaningful Scotland. “In Western Europe, we partic - infrastructure projects fits neatly While this may not be good news Williams. investment class. It suits fund In Turkey, infrastructure ularly need to upgrade and with many investors’ long-term for Costa-bound Nonetheless, the financial managers’ investment needs. It projects are helping the economy renew existing infrastructure. In liability requirements. Canadian holidaymakers crisis has wrought a change in suits governments’ financial and as it evolves into a European the emerging markets of Eastern and Australian pension funds and caught up in attitudes. Governments are economic needs of certainty. It powerhouse: from the privatisa - Europe, lots of greenfield investment funds have long strikes by keener than ever to use the suits private sector project tion of the electricity grids and infrastructure projects are identified infrastructure as a airport private sector to help fund their managers and, more often than networks to the €1.2 billion 200- required, such as airports, ports good investment vehicle. Now workers projects but banks have become not, it suits end-users too I metre-high Boyabat dam on the and roads. There is a large other institutions are coming to opposed more wary. In some cases, Kizil River, the country’s largest element of catch-up, so invest - the same conclusion.” to the therefore, private sector hydroelectric project. ment is needed to back higher This realisation is timely for In other words, infrastructure GDP, unlock capacity backlogs national and regional authorities. covers a vast array of projects, and fund capital investment. In “The downturn has put many each of which needs to be built, more mature markets there is a governments in a situation where funded, and managed. lot of demand to upgrade ageing they need to find alternative Infrastructure funds have already water works or make European ways of funding infrastructure.

34 35 Germany is an example of the made a valuable contribution to power generation greener,” he At the same time, private sector part-privatisation, it helps the operators are asking for more former. Costing €6.4 billion, it these schemes and will almost says. investment appetite presents an Spanish finances and represents reassurance or even direct was an enormous undertaking in certainly continue to do so, Some commentators have attractive opportunity to sell a rare opportunity for infrastruc - subsidies. scale and cost and a major provided projects are asset- suggested the financial crisis existing assets to new owners. ture investors. This is particularly “Risk allocation has always strategic milestone, the comple - backed and offer long-term, undermined the appeal of Governments can see it as an pertinent as the financial crisis been a key issue, never more so tion of which involved stable returns. But, if many infrastructure investment but has underlined than now,” says Williams. The overcoming logistical and projects have been completed in Williams points out that, rather The €6.4 billion Nord Stream gas pipeline under infrastructure’s shape of infrastructure project political hurdles and satisfying recent years, many more are in than hindering the market, the ‘‘ the Baltic Sea between Russian and Germany relative funding is also shifting, he says. stakeholders as diverse as the pipeline, highlighting the economic downturn has concen - was an enormous undertaking strategically, in resilience as an “Infrastructure investment has London bankers and Polish huge demand for new and trated the minds of governments scale and in cost. It was achieved by overcoming asset class. traditionally been leveraged. fishermen. improved infrastructure across and investors. “Things have logistical and political hurdles and satisfying “The sector Debt will always have a sensible At the more exotic end of the Europe. changed a lot in the last decade, stakeholders as diverse as London bankers and has not been role to play but ideally deals energy market, there are the Bridgepoint director Adrian not least in the financial markets. Polish fishermen ” immune during should be debt-enabled rather emerging plays in greentech or Williams says the downturn debt-driven. We have no doubt cleantech: the sprawling solar the last few The downturn has put many governments in a opportunity to free themselves but many infrastructure assets there will continue to be innova - power fields of the Andromeda years have ‘‘ situation where they might have to find alternative from spending commitments and have performed well and the tion around deal structuring but and Rovigo projects in Italy and identified a real ways of funding infrastructure. At the same time, simultaneously raise cash,” availability of debt finance has investors always need to think the giant €1 billion C-Power wind infrastructure private sector interest presents an attractive opportu - explains Williams. remained strong. There is an hard about appropriate levels of farm off Belgium, which in time backlog in both nity to sell existing assets to third-party investors ” For example, the Spanish understanding that infrastructure debt and the resilience of assets will be dwarfed by other massive developing EU government intends to sell a 49 has defensive qualities and, over being acquired.” projects planned off the eastern markets and the mature markets There has been a recognition that per cent stake in Aena, the state- the last 10 years, asset valuations Overall, however, infrastruc - coastlines of England and of Western Europe. the risk-reward profile of controlled airports authority. have continued to rise,” says ture has emerged as a meaningful Scotland. “In Western Europe, we partic - infrastructure projects fits neatly While this may not be good news Williams. investment class. It suits fund In Turkey, infrastructure ularly need to upgrade and with many investors’ long-term for Costa-bound Nonetheless, the financial managers’ investment needs. It projects are helping the economy renew existing infrastructure. In liability requirements. Canadian holidaymakers crisis has wrought a change in suits governments’ financial and as it evolves into a European the emerging markets of Eastern and Australian pension funds and caught up in attitudes. Governments are economic needs of certainty. It powerhouse: from the privatisa - Europe, lots of greenfield investment funds have long strikes by keener than ever to use the suits private sector project tion of the electricity grids and infrastructure projects are identified infrastructure as a airport private sector to help fund their managers and, more often than networks to the €1.2 billion 200- required, such as airports, ports good investment vehicle. Now workers projects but banks have become not, it suits end-users too I metre-high Boyabat dam on the and roads. There is a large other institutions are coming to opposed more wary. In some cases, Kizil River, the country’s largest element of catch-up, so invest - the same conclusion.” to the therefore, private sector hydroelectric project. ment is needed to back higher This realisation is timely for In other words, infrastructure GDP, unlock capacity backlogs national and regional authorities. covers a vast array of projects, and fund capital investment. In “The downturn has put many each of which needs to be built, more mature markets there is a governments in a situation where funded, and managed. lot of demand to upgrade ageing they need to find alternative Infrastructure funds have already water works or make European ways of funding infrastructure.

34 35 Last word

Can’t complain No one loves a good whinge more than the British. But, when it comes to real complaining, they are outdone by almost every other nation in the Western world. Newsweek contributing editor Stryker McGuire delves deeper …

One evening I walked into remembering that Massachusetts at the time was still London Waterloo, the UK’s quite British. Which means that, essentially, the ‘stiff busiest railway station. upper lip’ is distinctively British. Even the Brits This was not long after I acknowledge that. arrived in Britain from the I’ve made a habit of consulting pop psychologists, United States with my family in 1996. It was about six pub pundits and black-cab drivers about this over the o’clock, the height of what should have been the rush years. I’ve heard a number of explanations. Britain has hour. And yet the cavernous waiting hall was eerily endured so much war and conflict over the centuries quiet. Before me stood several thousand people. Calm, that its people seek refuge in cocoons of quiet erect, alert, their heads tilted upwards, they resembled whenever they can. Britain, especially England, is so a huge rookery of penguins. Their eyes were fixed on damned crowded that you can’t afford to have sharp the vast departures and arrivals board, which was elbows. The British class system has encouraged completely blank: no departure times, no arrival times, deferential behaviour. no track numbers, nothing. Time had stopped, along There is also the matter of the British sense of with the trains. humour. Thomas Kielinger, a German who first came to Anywhere else, the scene would have been very the UK in 1960, taught at Cardiff University for a bit and different. There would have been a range of emotions – has been Die Welt ’s correspondent in London for a indignation, unease, anger. Not at Waterloo. What dozen years. He is a great admirer of the British and struck me there was the total silence: nobody believes that when Brits deal with adversity, their complaining, no one demanding their money back, no weapon of choice is humour. “They thrive on one threatening to take Network Rail or South West congratulating themselves for how good they are at Trains to court. Just that eerie quiet, the sound of confronting the slings and arrows of outrageous silence emanating from the proverbial stiff upper lip. fortune. I often wonder whether the British sense of I’m smiling to myself now, trying to imagine a similar humour is not in itself one of the biggest impediments to scene in New York, where I was born and where I’ve more rapid improvement of, say, public services in lived on three different occasions. Forget it: New York general, because a nation given to shrugging off the doesn’t do silence. If you walked into Grand Central maladies of their daily existence creates a strong Station and the signboards were down and the trains disincentive to those responsible to do anything about weren’t running, the noise would be deafening. them,” he says. Litigation would be widely threatened and silence is the Underlying all of these explanations is, I think, the last thing you’d hear. In Madrid or Rome, there would be great bedrock of British character: a yearning for civility. an explosion of noise, arms flailing, fingers jabbing. In The French put civilisation above civility, the Italians Paris, there would be hell to pay by the ticket takers and have forgotten what civility is, the Spanish don’t care station employees. In Zurich ... well, in Switzerland it and the Germans, says Kielinger, are too busy worrying wouldn’t happen in the first place. about their health to complain about much else. Even when the British do complain, they complain in an So what is it about the British? orderly fashion; they write a polite letter to The Times or The phrase ‘stiff upper lip’, according to some they slip a well-mannered note through the neighbour’s etymological sources, is actually of American origin. Its letterbox. The British are determined to put civility earliest known usage was in a publication called the above all else, even if it means the trains don’t run on Massachusetts Spy in 1815 – but then it’s worth time – or at all I