Mark Serwotka | ukwatch.net

The true cost of privatised public services

JamieSW — Thu, 10 Jul 2008 16:25:27 +0000

Today’s report by the free market economist DeAnne Julius celebrates the multibillion pound profits private companies are now making from our privatised public services.

Proving what PCS has been saying for some time – that New Labour has privatised more than the last two Tory governments combined – the report joyfully proclaims that what is sinisterly referred to as the “public services industry” is now worth an eye-watering £79bn, a 130% growth since 1995.

These figures are the stuff of dreams to economists and business leaders; and, it would now appear, Labour cabinet ministers.

But it is worth reflecting on what it means. What it shows is the ideological drive to sell off the vital public services on which this country relies has now gathered such pace that we are in a position to parade contracts around the world as a shop window to attract yet more buyers.

Instead of commissioning an economist to investigate how much can be sold off, the government should ask itself, what is the essence of public service? Instead of privatising workers who have won awards for the services they provide, it should reverse its obsession with prioritising profits over people’s needs.

The report offers no reliable evidence for the assertion that public services are improved by privatisation and outsourcing. It is fitting that it is published in the same week as the Commons public administration select committee confirmed PCS’s long-held view that there is no compelling evidence to support the government’s claim that the third sector is “transforming” public services.

If she had wanted evidence, Dr Julius could have looked no further than the report, Water as a Public Service [.pdf], by David Hall and Emanuele Lobina of Greenwich University’s public services international research unit, which leaves no room for doubt about the need for public provision of this most vital resource.

She could also read Allyson Pollock’s devastating analysis of private involvement in healthcare, NHS plc, which exposes the damage done by PFI.

Dr Julius might have thought twice about citing welfare reform as an area of success of marketisation, if she had read the Department for Work and Pensions‘ [.pdf] own research, which shows that non-contracted out job centre teams outperform private-sector teams.

As Steve Davies, of Cardiff University, points out in Contracting Out Employment Services to the Third and Private Sectors: A Critique, the evidence of the success of outsourcing is just not there.

As I said on Radio 4’s Today programme this morning, the fact this review was commissioned, and has been endorsed, by business secretary John Hutton sums up all that is wrong with this Labour government; a government which is now more obsessed with putting profits in the pockets of millionaires, than caring about the lives of the millions of people who rely on public services.

We now face the horrifying prospect of a Labour secretary of state jetting off round the world to persuade developing countries that they should follow suit and privatise their services.

My union, through the Public Services Not Private Profit campaign, will continue to lead the fight against this trend at every possible turn. I believe we enjoy the support of the majority in our opposition to this programme of so-called “reform”, which is ideological in intent and devastating in impact.

Raising the Stakes

Ellie Keen — Sun, 14 Oct 2007 00:47:30 +0000

The sight of Gordon Brown greeting Margaret Thatcher warmly at the door of Number 10 must have left most Labour supporters aghast.

It highlighted the extent to which the hated priorities of the Tories have been adopted wholesale by the government. Sadly, criticism from within the Labour Party was muted.

But where mainstream politics, and its obsession with pro-market solutions, has failed, PCS is taking action. Our national dispute actively opposes the public sector pay freeze, job cuts and the consequences of privatisation.

Everyone (apart from that tiny group who have made fortunes from it) hates privatisation. The majority of the public want rail renationalised. It’s TUC policy. It’s Labour Party policy. And yet it doesn’t happen. It’s the same with council housing. Tenants want public housing kept in public and accountable hands. Again it’s Labour Party policy but the government remains hostile.

On key issues like war, privatisation and workers’ rights there is little to choose between the main parties. When mainstream politics consists of a tussle for what is called the centre ground (but is in reality the right), it is hard to see how change can be brought about.

But recent events show that policies can be overturned overnight. A government unable to find funds to protect public servants’ earnings suddenly found billions of pounds to prop up Northern Rock – despite Mervyn King, governor of the Bank of England, having attacked other central banks for doing the same only days before.

Perhaps Gordon Brown should ask John Major round for tea next time. They could compare notes on being forced into embarrassing U-turns by the very markets they worship.

Of course government jumping to the tune of big business is scarcely a new development. Operating behind the scenes is working well for the fat cats, but it is clearly not effective for trade unions. Fortunately we have other means at our disposal.

CWU members in Royal Mail have been fighting very hostile management. It threatened major job cuts, and wanted to hold down postal workers’ pay increase to 2.5 percent – well below inflation. “The money on the table is the money on the table because that is what the business can afford” Royal Mail chair Alan Leighton told the BBC.

The CWU did not accept that, and took strike action. Management then offered 6.7 percent over two years. Although this offer also included tearing up agreements with the CWU (and is therefore unacceptable) it went beyond the 2 percent public sector pay limit being pursued by Gordon Brown.

Meanwhile RMT members working for Metronet went on strike, forcing Transport for London to close nine tube lines. Their demands for guarantees on jobs and pensions for the workers (whose privatised employer had gone bust) were met.

This caused the Economist to point out that other private companies were unlikely to bid for Metronet’s contracts, thus securing their return to the public sector – in line with RMT policy. The Economist probably did not mean it as a compliment to say that “the RMT is powerful whereas the government is weak”, but the RMT should take it as one.

Just because the government seems wedded to a public sector pay freeze and continuing privatisation, it does not mean we cannot shift them. None of the savers queuing outside Northern Rock believed the government when they said that all was well in financial services.

I doubt that they believe Brown’s assertion that squeezing the pay of benefit clerks, street cleaners and nurses will control inflation. They are more likely to be concerned with the £1.3 million paid to the Northern Rock chief executive last year, or his 10 percent pay increase agreed in April.

My own union is balloting over another strike of our members in the civil service and associated organisations. We want it to have as much political impact as possible – maybe by acting alongside local government workers, and postal workers, if they have not settled.

But in any case, we will accompany national action with targeted action in different sections aimed at maximising the industrial effect. We have seen that when the stakes are high enough, the government will change direction. Our job is to raise them.

Mark Serwotka is general secretary of the PCS, the civil service workers’ trade union.

Call Time On Privatisation

Alex Doherty — Wed, 03 May 2006 20:58:25 +0000

Railways, school meals, water, hospital cleaning. Who would argue that they were better off for being privately run? Certainly not those of us who have to live with the consequences. But measured by their ability to deliver wealth to the already privileged, rather than the quality of what they deliver, these services are highly successful.

Should this be the role of our public services? In his foreword to the green paper on welfare reform published in January, the work and pensions secretary, John Hutton, set out some aims for the welfare state that few of would disagree with: supporting those unable to support themselves, or helping them to acquire new skills, for example. But when he said its role is to help UK companies succeed, it rang alarm bells.

We are increasingly seeing public policy developed with the interests of business in mind, with serious consequences for public services, jobs and society as a whole. However, the government’s hostility to public provision and enthusiasm for the private sector is not shared by the general public.

This means that ever more creative approaches are needed so that handing over the state to big business looks like something else. In health, education and defence, we have had the private finance initiative. On the tube it was public-private partnership.

A Public and Commercial Services union conference on privatisation this week heard how the CWU postal union faced privatisation by stealth of Royal Mail, beginning with a proposed issue of shares to the workforce.

The third sector

We already have full frontal privatisation of civil service jobs in areas like defence (where, for example, a 25-year contract for all training is to be given to a private consortium), and a tide of expensive private consultants. But now the talk is of the “third sector”. The emphasis is on the supposed advantage that voluntary sector contractors offer – of expertise, closeness to users, and flexibility.

This has been lobbied for by organisations representing those who could benefit. The Association of Chief Executives of Voluntary Organisations (Acevo), for example, joined the Confederation of British Industry and the Department of Trade and Industry-funded National Consumer Council in a campaign for “a consumer-led reform agenda” for public services, which naturally includes a greater role for private and voluntary sectors.

Acevo has also been keeping an eye on the pay of its members, commenting: “The competitive salaries we are now able to offer reflect the sector’s growing professionalism. It’s time to stop apologising for them.”

They are joined in their lobbying by the newly-formed Employment Related Services Association. A study of ERSA founder members conducted for PCS found that they already received £300m of government funds. It also found that their larger members were companies with multi-million turnovers.

Some charity members also had high incomes, and “competitive” salaries to match – two of training charity the Shaw Trust’s executives, for example, earned over £110,000.

Business links

There were other business links – ERSA founder Tomorrow’s People was set up by directors of drinks giant Diageo, who are joined on the trustee board by a private consultant, a senior CBI official and former directors of BT and finance company Cazenove.

The welfare green paper proposes that private and voluntary sector providers will expand the Pathways to Work programme for getting people into work from incapacity benefit. What can such organisations bring to assisting ordinary people into work that experienced job advisers from the Department for Work and Pensions cannot?

When DWP management were asked this by trade unions they were told that the main reason for using contractors was that massive Treasury-inspired job cuts meant that the capacity no longer existed in Jobcentres. PCS members in DWP will be striking next week against the continuation of these cuts. They are defending not only their jobs and conditions, but the whole concept of publicly controlled services.

This fight needs to be broadened. PCS, together with a dozen other unions, has launched a campaign against the domination of our services by the profit motive. Under the slogan of “Public Services NOT Private Profit”, we are organising a mass rally and lobby of parliament on June 27.

Everyone who wants to call a halt to privatisation, whatever it is called, and get back to services run with an eye to the benefits to society rather than the bottom line, should join us.

Mark Serwotka is general secretary of the Public and Commercial Services union, which this week hosted a forum on protecting public services.