Only in it for the money...

If anyone wants to project what the current Tory efforts to privatise everything they can lay their hands on will lead to, take a look at the rake's progress of defence technology firm QinetiQ.

The company hit the headlines this week because of its particularly nasty plan to derecognise the trade unions that operate within the company, PCS, Unite, GMB and Prospect.

It has been a long march for the company since its launch in June 2001, when it was split off from the government establishment within which it was known as the Defence Evaluation and Research Agency, and set up as a public company with a "golden share" of 56 per cent retained by the MoD, 13 per cent by the staff, mainly upper management, and 31 per cent flogged off at a cut rate to the US-based private equity Carlyle Group.

QinetiQ was floated on the London Stock Exchange in February 2006. The company was valued at £1.3 billion, with the MoD holding estimated to be worth £700 million, the Carlyle Group's share £400m and staff holding worth about £170m.

This made headlines across the press, given that the Carlyle Group had purchased its slice from the taxpayer for a paltry £42m.

Mind you, while the taxpayer might have been understandably miffed at this, the company's top 10 managers certainly weren't. They saw the value of their holdings in QinetiQ rise from £537,000 in 2003 to £107m just three years later.

Commons public accounts committee chairman Edward Leigh MP later said: "The senior public servants managing QinetiQ behaved dishonourably.

"They sold the idea to the MoD of privatising the business without explaining they stood to benefit - a serious conflict of interest - and later negotiated their own incentive scheme with Carlyle before that firm was appointed preferred bidder.

"The design of the scheme contributed towards the top 10 managers receiving a return on their own investment of 200 times.

"This is nothing less than profiteering at the expense of the taxpayer. Never again should public servants be permitted to pursue such a self-interested stratagem."

This didn't seem to disturb QinetiQ chairman Sir John Chisholm however. He declared that the creation of QinetiQ was "the greatest achievement of my working life."

Well he might. He personally trousered around £26m from the privatisation.

That's the shabby start to QinetiQ's history, a sordid catalogue of private equity profiteering and individuals amassing personal fortunes at the expense of the taxpayer.

It didn't stop there, of course. Capitalism never does when it locates a nice few bob there for the taking.

QinetiQ embarked on the usual grubby cycles of takeovers and buyouts that mark expanding companies paying their way into new markets.

In this case it was generally US companies, some with less than savoury reputations, but all with juicy US government contacts and contracts.

And in tandem with all that it launched the usual war against its staff.

In 2007, QinetiQ announced 400 intended job cuts at the same time as trumpeting a 9 per cent rise in pre-tax profits to nearly £30m for the first half of the year.

In May 2009, QinetiQ unions were forced to ballot for industrial action when the company announced a year-long pay freeze despite underlying profits of $155m.

Then chief executive officer Graham Love said in the 2009 annual report that "this has been another good year of all-round progress for the Group. We have delivered good organic growth, enhanced by targeted acquisitions, improved operating margins and very strong cash generation."

In 2010 it launched yet another round of job cuts, at the time expected to total nearly 800, although interim figures in March that year showed profits of £145.4m.

This apparent drop was perhaps best explained by a reduction in working debt that year from £457m to £261m.

In 2011 yet another chief executive officer, one Leo Quinn, was reported to be in discussions with the government to ease the "golden share" arrangement which was retained when the company was floated to prevent any foreign takeover that might "imperil national security."

It's not yet clear quite what the upshot of those discussions was, or why they were held, but perhaps Mr Quinn senses the possibility of another nice little earner for the shareholders in a foreign takeover.

That's only a guess, of course, but it might explain the latest gambit by this dodgy and untrustworthy management.

Foreign investors are notoriously averse to trade union recognition agreements and the existence of at least four such agreements within QinetiQ might well be seen as a huge disincentive to a sell-off.

Only speculation at the moment, but watch this space. It would certainly be an unsurprising end for a cycle which has gone from government department via private equity to voracious high-tech military wheeler-dealers in little over a decade.

And the whole sordid saga should act as a warning to all those working in the NHS, in the prison service or, given the news of the privatisation of a Lincolnshire police station, in almost any service that the government can sell off to its profiteering mates.

Don't let the speculators in or you will be facing the same decade-long battle that QinetiQ employees have suffered.

Because the simple truth is that they're only in it for the money.