Using competition for taxpayer value in public services9

Fantastic news!

Welcome to the brave new world of public services delivered by the private sector.

I can’t wait until we have a private, profit-driven police force. Or child protection assessments done on a competitive, race-to-the-bottom basis. Or the fate of our dementia-suffering old folk decided on cost. Or libraries closed because they’re simply not profitable enough.

In order to squeeze out as much profit as possible, we’ll get a race to the bottom on wages, so that it will become harder and harder to attract the professionals needed to deliver services. And why build schools that are interesting places to learn in when it’s far cheaper to build a dull, breeze-block building?

When Bristol’s buses were deregulated in 1986, First group took over. Since then, fares have risen way over the rate of inflation, many services have been cut leaving whole communities without a service, smaller operators have been driven out of business, and bus patronage has plummeted as a result. It is now widely acknowledged that Bristol’s bus service is one of the most expensive and unreliable in the country.

Bristol has had its publicly-run bus monopoly replaced by a privately run monopoly. The beneficiaries? First’s shareholders. The losers? Anyone that wants to use a bus in the Bristol area.

This is exactly what happens when you allow large companies to take over public services. These large companies hate competition, they want to stifle it and entrench their own position as a monopoly provider.

And despite any well-meaning notions of using competition to make public services more efficient, this is exactly what will happen if all public services are opened up to large private companies. The state monopoly will b replaced by a private one and services will deteriorate.

Well, I can only agree with Steve and Blarg 1987 below. Amazing how efficient private capital is – after all they haven’t brought the country to its knees. I must have been dreaming the impact private speculation has had on public life. I thought the TPA was ‘non-partisan’?? However, theiTPA is clearly a neo-liberal organisation seeking to drive laissez faire economics into all aspects of public life. when will you realise that profit is not what drives good public service? Polly Toynbee also writes:

This is it, the last veil ripped away. In the Daily Telegraph today, David Cameron penned his preview of the long-delayed white paper on public services. The paper’s editorial saw the light: “For the first time he explains the full scope of his ambition to roll back the boundaries of an overweening state.” This is indeed the eureka moment for the country. Nothing like this was ever breathed before the election.
Every single public service will be put out to tender. Everything. Well, not MI5 or the judiciary – but everything else, including schools and the NHS. Forget the camouflage of localism and choice: however much local people like local services that work well, they will have no choice in the matter. A private company – or in theory a very large charity – can challenge any service they would like to run and bid to take it over. If Serco or Capita think they can turn a reasonable profit from cherry-picking anything the council or the government runs, they will have the right to demand it is put out to tender. If they bid below the current cost and claim that quality will not fall, it’s theirs for the asking. Not the people, not their elected representatives, nor the users of those services will be able to refuse. It will be taken out of their hands because competition law will decide. If local people want their council to hold on to a much-loved service, a company can take the council to court – at huge and wasteful expense – and almost certainly win the right to tender and win the contract.

The NHS bill now marching through parliament is the model. Behind the eyecatching GP commissioning, the real radicalism is in making any part of the NHS open to contract by “any willing provider”. Any company can claim the right to provide any part of the NHS – even if the local GP consortium is very happy with the NHS surgeons providing operations. Neither patients nor GPs will choose once competition law enforces tendering out. Cameron reveals his white paper on public services will lever open everything in the same way. EU competition law doesn’t currently apply to public services or the NHS, unless commissioners choose to put a service out to contract, in which case it must be opened up fairly across the EU. Now everything is open for business.

Democracy will scarcely get a look in. People can’t choose if services are contracted out. Once contracts are signed, nothing can change. You can throw out rascally councillors or governments, but the contracts will go on regardless. Like PFIs, they will be traded as financial instruments, sliced and diced according to risk and sold on. This sets a nuclear bomb under all public services, because there can never be any going back. If you don’t like the sound of this, Cameron’s government can be voted out but it will be virtually impossible to return services to a public realm that no longer exists. Ownership of the contracts and companies moves on, and the public sector loses any capacity to take them back.

Is contracting out necessarily value for money? An extensive trawl of the literature was done for John Hutton at the DTI by the pro-market economist DeAnne Julius only three years ago, but even she failed to find any decent evidence that contracting out works as a general proposition.

It’s not a perfect match, but thehistory of the PFI calamity is well-documented, on the left by Allyson Pollock and on the right in the Telegraph by Andrew Gilligan, and in Tory MP Jesse Norman’s campaign to reclaim some of the billions skimmed off these lucrative contracts. At the campaign site you can find plentiful cases of a PFI school charged £302 to fix one electric socket or how the M25 PFI cost an extra £1bn. Public servants negotiating big, inflexible and unchangeable contracts up against companies employing the sharpest lawyers and accountants will always be at a disadvantage. Gordon Brown and Baroness Shriti Vadera’s pig-headed determination, against expert advice, to put the London tube into a web of PPP contracts stands as the worst exemplar: it fell over and cost a fortune.

When I spoke to Norman, he said he’d warned his leader that “many PFI contracts provide an object lesson”. He says the danger is that contracts can be “very expensive, very inflexible and opaque”. The solemnly staid Chartered Institute for Public Finance and Accountancy expresses its concern: “Where is political accountability when the contracts are not aligned with the political cycle?” And, they wonder, if everything is broken up into small outsourced pieces, “how are authorities to pursue the shared services and efficiencies of scale urged on them?”

Cameron says his reforms will bring “openness, creativity and innovation”, but in fact these contracts are the closest you can get to a Stalinist five-year plan – opaque, undemocratic and unresponsive to change. Democratic politicians adapt public service priorities all the time – not always for the best, but fettered only by responsiveness to voters, not to badly drawn fixed contracts.

Cameron is taking an ideological blowtorch to anything branded “public”. He says this is the “decisive end of the old-fashioned, top-down, take-what-you’re given model of public services”. His mission is to “dismantle big government and build the ‘big society’ in its place”. But it may look more like big Serco than big society.

Labour is in a quandary, afraid Cameron is laying a trap. Opposing the plan risks wearing the cap of “old-fashioned, top-down” anti-reformers defending the unions’ self-interest. Besides, Tony Blair began all this – and public services will always need eternal effort to invigorate and renew. But these are changed times, and it’s not Labour who need to be afraid. All around people are starting to see the destruction of public services they had forgotten to appreciate. Libraries, Sure Starts, charities, after-school clubs, youth clubs, parks and gardens, old people’s care, hospitals, clinics, midwife visits, meals on wheels and a thousand other things once taken for granted are shrinking before their eyes. If ever there was a bad political time to privatise the lot, this must be it.

Cameron is setting his runaway ideology, speeding down the tracks on collision course with public sentiment. This only confirms that tell-tale moment of glee when the Tory benches shouted “More! More!” as Osborne ended his budget listing the deepest public cuts since the war. Political wisdom would advise them to engage in a little more hand-wringing anguish, but they just can’t resist following their animal instincts. Labour has nothing to fear in standing up for the public good.

The private sector is just shit at runing public services…..

Hospital cleaning contracted out to private sector…..result – MRSA in our wards.

School catering contracted out to the private sector…..result – ‘turkey twizzlers’

Rail services franchised to private sector……result – shoddy maintenance resulting in several fatal rail crashes. Main franchise (East Coast) failed twice and now in public ownership. Railtrack also failed.

Buses deregulated………result, main profit making routes clogged by buses causing congestion, loss making routes (often rural routes required by the elderly and the poor) ignored or scrapped unless heavily subsidised.

This is all just the usul Tory crap of outsourcing public services to private companies operated by party donors and supporters who’ll get rich off the contracts, paying their staff a pittance.

Who will ensure value for money? Private companies can and do charge more than LA services
What about the waste of taxpayers money in Academy conversions, setting up freee schools etc – all without any accountabilty for the taxpayer?
There is too much rhetoric from this government about saving taxpayers’money while they continue to waste public money on advisers , trips ,expenses, entertainment redundancy payments ,civil servants who seem very cavalier about spending our money ………