Industry news

CapeView Capital and Henderson Global Investors have decided to wager against G4S this year. Both firms have set up short positions in the troubled security firm’s shares.

The two London hedge funds’ strategy is undoubtedly justified by the turbulence endured by the company in the last few years since it failed to provide adequate security standards for the 2012 London Olympics.

When setting up short positions in a company’s shares, firms are loaning these out for a defined period of time with the intention of buying them back later, at a lower price.

The two firms join another hedge fund giant, Ako Capital, which has been shorting the security firm’s shares for more than two years.

The majority of the City’s biggest hedge funds, however, has taken the opposite course and closed out their short positions in the company during the last year.

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Related: G4S booted out of the FTSE 100 for first time since 2007

Ed Vaizey, the digital economy minister, announced the government is seeking suggestions from the public and private sectors to continue the digital transformation of both public and private sectors.

The use of more digital technology not only simplifies all sorts of administrative tasks and services, but also offers an environmentally friendly approach, with the substitution of paper-based systems for digital-based ones.

The government seeks to make the relationship between the state and the citizens more efficient and faster with the digitalisation of some many services, including the NHS, driving licence or paying tax bill.

The digitalisation of their services, so far, has also helped to save money, the government adds.

“We need to work hard to make sure we continue to take advantage of the benefits digital transformation has to offer”, Ed Vaizey adds.

The new digital strategy aims to shape the forthcoming digital era as well as to ensure the role of the UK as the global digital leader.

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Related: Digital strategy at heart of public savings in 2014

China’s stock markets have closed early today after shares took a sudden and sharp fall. On the first day of trading of 2016, trading was halted 90 minutes earlier than scheduled.

The Shanghai Composite Index hit a three-month low, falling by 6.9%. The Shenzhen Composite fell by more than 8%.

Today’s sudden plunge in stocks set off a “circuit breaker” system for the first time, which immediately halts trading when activated. The system is aimed at checking volatility in the Chinese stock market.

According to the BBC’s Karishma Vaswani, today’s performance hints at "volatile trading for the rest of the year [in China]".

"Retail investors in the Chinese stock market are often driven by sentiment and tend to follow the crowd. When they hear of some bad news from brokers or their friends, and other people start selling - they start selling too", Ms. Vaswani continues.

Financial analysts believe that reports of a contraction in China’s factory activity may have been one of the factors triggering investors’ sudden change in expectations.

In reaction to Shanghai and Shenzhen’s sudden suspension, the London’s FTSE 100 had fallen by 2% only minutes after opening.

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Related: UK outsourcing to benefit from China stock market woes

The High Court has ruled that the Cornwall Council is allowed to terminate its outsourcing contract with BT.

The ruling comes after the Council expressed its desire to terminate the contract this June due to the British telecommunications giant’s failure to deliver services properly or on time.

The announcement followed a Strategic Partnership Review released earlier in the year which read, “At present, of the guaranteed new jobs in Cornwall, BT has delivered less than a third of the figure promised and no additional jobs over and above the contractual guarantee, but which were committed to, have been created”.

BT denied any breach of contract and took the issue to court in an attempt to retain the deal, taking the two companies to court earlier in December; however, Mr Justice Knowles ruled that BT “faced problems of its own making and did not provide to the defendants the service it had promised, to the standard it had promised”.

The council intends to issue termination notice before Christmas.

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Related: BT seeks High Court injunction to prevent Cornwall Council contract termination

Three East Midlands police forces have rejected outsourcing their control rooms management to security giant G4S after being approached by the latter.

In November, the forces announced that G4S had been asked to carry out a study on the feasibility of contact management; however, Leicestershire Police, Northamptonshire Police and Nottinghamshire Police abandoned talks with G4S early this week after having agreed amongst themselves to form a “strategic alliance” and coordinate their work instead.

Leicestershire Police and Crime Commissioner Sir Clive Loader proclaimed that the three forces “would prefer to be the masters of our own destiny."

The three forces firmly deny that the alliance is a merger. In a joint statement, the forces state that, "It is all about protecting the quality of local policing services in each force area as a result of maximising efficiencies ... and each force will retain its own identity."

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Related: G4S booted out of the FTSE 100 for first time since 2007

Capita leads the ranking of the British government’s biggest suppliers of the year 2015 with $14.5bn in sales to the UK government.

The failures in delivering public services of companies as Serco and G4S – who got their reputation damaged after being referred to the Serious Fraud Office for overcharging for tagging offenders in 2014 – paved Capita’s way to engage in major deals with the British government.

John Keppel, the North European president for the Information Services Group, said that Capita was the biggest winner because it was “seen as a safe option” hence they “had a stellar year”.

The second in the ranking is Carillion, a construction and support services company that earned $10.8bn in deals to the UK government. Serco made it to the number seven with $1.1bn in sales, whereas the world’s biggest security company, G4S, failed to reach the top 10.

The last past five years have been very positive for the outsourcing sector as the number of government contracts handed to the private sector has more than tripled.

In addition, the forthcoming year looks very promising as the Ministry of Defence aims to engage in a huge deal to outsource the running of the military’s fire and rescue services, which employs 2,200 staff at 78 defence fire stations worldwide.

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Related: G4S and Serco keep hold of Ministry of Justice criminal tagging contracts

Airwave Solutions withdrew its injunction that was preventing the UK government to award a contract for the mobile network for the emergency services.

Despite withdrawing the legal challenge that was affecting the contract for the lot three of the Emergency Services Mobile Communications Programme, Airwave Solutions admits to continue with the necessary legal actions to protect its position.

The company claims that they “do not believe that bidders, including Airwave, were given equal treatment under relevant procurement laws…”. However, they decide “not pursuing the continuation of a suspension as we do not wish to delay the procurement process, but remain fully committed to our claim related to the lot three process”.

Other bidders for the lot three were the UK Broadband Networks, Vodafone and Telefonica. However, the contract has been awarded to EE.

The minister for policing, Mike Penning, said that these were very positive news as the Government decided to allocate an additional £1 billion – to the original emergency services network budget – in the spending review in order to improve this services.

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Related: Government reveals G-Cloud 7 Supplier list

Serco has announced it will hold on to its environmental services and leisure operations instead of selling them like it had previously planned.

The move is part of Serco’s wider strategy to refocus business towards the public sector. The company informed in a statement that the two units “provide frontline services to public sector customers”, and that Serco feels “there is real merit in retaining a broad offering to these important customers.”

Serco’s environmental services unit provides rubbish collection, recycling and waste collection services for 17 local authorities in the UK; its leisure operations encompasses 70 leisure centres through the country.

The announcement comes right after another of the outsourcing giant’s operations, the Caledonian Sleeper rail between Scotland and London, was rocked by a worker’s strike over malfunctioning trains.

According to the RMT union, trains operated by Serco were found to have more than 200 defects such as disconnected smoke detectors, inoperable toilets, and lightening and heating systems not working.

Last week, Serco revealed that profits for 2016 would be lower than expected. The sale of the company’s offshore BPO division in India and its lack of new contracts win were advanced as the cause for the discouraging 2016 forecast.

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Related: Serco shares crash after announcement that profit will halve in 2016

Barnet Council decided to move forward with its plan to transfer 120 education staff to Cambridge Education, an independent global education services company.

This outsourcing deal affects 120 posts related to the school admissions and services for students with special needs areas as well as 340 catering staff that will have their jobs transferred to another company.

The Professional Outsourcing Magazine (PO Magazine) says that this deal is being “framed as a strategic partnership rather than straightforward outsourcing” process.

“This appears to be the way with many outsourcing arrangements at the moment”, the PO Magazine adds.

The Conservative council incumbents defend this kind of deals, as some in-house services are becoming not viable for some entities. A vision not shared by their counterparts from the Labour party.

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Related: £165 million worth of savings expected from Barnet’s “easyCouncil” outsourcing deals

IBM has announced it will open a global headquarters for its Watson Internet of Things (IoT) in Munich, Germany. The new unit is part of IBM’s effort to advance connected devices and cognitive computing.

Cognitive computing platforms use natural language processing and machine learning to reveal insights from large amounts of unstructured data.

The Munich unit, the first of its kind in Europe, will be located in the HighLight Towers. The campus is expected to house a total of 1000 IBM developers, consultants, researchers and designers.

IBM’s IoT software is developed through the company’s Watson IoT cloud. IBM had previously announced it intends to broaden Watson’s capability in order to allow developers to operate with a new set of cognitive API’s, technologies and artificial intelligence tools through the cloud.

The American technology giant will give customers who wish to develop and create next generation cognitive IoT apps direct access to the cloud-based platform - a move IBM has baptised “Industry 4.0 Innovation”.

Harriet Green, general manager of the Watson IoT, has high hopes for the cognitive computing software "The Internet of Things will soon be the largest single source of data on the planet, yet almost 90 percent of that data is never acted upon".

"With its unique abilities to sense, reason and learn, Watson opens the door for enterprises, governments and individuals to finally harness this real-time data, compare it with historical data sets and deep reservoirs of accumulated knowledge, and then find unexpected correlations that generate new insights to benefit business and society alike," she added.

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