Evidence shows MoJ has created a monopoly
Recent correspondence with the Ministry of Justice regarding the monopoly position they created, when handing the FWA to one company (Applied Language Solutions owned by Capita plc), gleaned the following response from Kenneth Clarke:
"I do not accept that the introduction of this Framework Agreement creates a monopoly or reduces competition. The UK market for language services is worth around £940m annually and the justice sector currently represents around 7% of that market. Within the UK there are a large number of companies buying and providing language services in addition to a significant number of independent freelance interpreters. Companies and freelance interpreters providing services to the remaining 93% of the sector remain unaffected by the provisions of the Ministry of Justice Framework Agreement."
However, the above analysis is fundamentally flawed. Independent studies demonstrate that on-site interpreting only makes up around 14% of the total language services market:
On-site interpreting includes conference interpreting as well as public service interpreting. Hence, the market for the services which relate to the Framework Agreement (and for which NRPSI interpreters are qualified), is worth somewhat less than £132m (14% of £940m).
Since the MoJ has stated that the spend on interpreters was some £60m, the Justice Sector represents somewhat more than 45% of the total UK on-site public service interpreting market.
Hence in the FWA, the MoJ has created a monopoly by giving one company a market share of somewhat more that 45% in this market segment.
Such monopolies threaten our free market. Economists call it Government supported mono-supply. Such incomplete competition causes a deadweight social loss, i.e. overall, the Government pays a higher price for the service than would exist under pure competition.
We can see the effect of this in the wasted costs that the MoJ is incurring due to the low standard of service being offered.
