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Sold to the highest bidder, run for profit and given million-pound bailouts by the government. Clare Bayley asks just who signs the cheques for our public services?
In Britains public sector, a central paradox over money is at work. The public services need more of it to function properly, yet business still thinks it can make money out of them.
The rush towards privatisation shows little sign of slowing, let alone
stopping.
The commitment to foundation hospitals continues, though muted, despite
well-founded fears that they will lead to a two-tier health service, encourage
further private sector inroads into the NHS and, by introducing a commercial
market, will draw crucial staff away from hospitals without foundation
status.
Recent months have seen a continuing catalogue of PFI disasters, such
as the 20 minute power failure in Bishop Aucklands one-year old,
£67m PFI hospital, which left nurses manually ventilating life support
machines.
More than 500 new PFI schools are to be erected or refurbished in the
next three years at a cost of £2.4bn. Meanwhile Jarvis, the engineering
contractor at the centre of the police investigation into the Potters
Bar rail crash has, bafflingly, won a three-year, £1.9m contract
to help rescue failing secondary schools in England.
Few lessons seem to have been learned from the £100m NIRS2 project, the computer project developed by Anderson Consulting to calculate National Insurance.
Despite being 17 months late and seriously over budget, the system still wasnt working.
Now Inland Revenue is set to sign a PPP deal worth £3-£4bn
over 10 years to run National Insurance and Tax IT systems. If a new company
is brought in at the end of this year,NIRS2 will terminate at a cost of
£13m.
And all this at a time when the probity of the private sector is more compromised than ever.
First there was the Enron scandal, now continued anxiety over pension
schemes, scandals over fat cat salaries and rewards
for failure. The new chairman of the HSBC Bank
was welcomed into his job with a salary of £23m, plus £17,000
in fringe benefits.
The full obscenity of this was highlighted at the banks annual general meeting when Abdul Durrant, a cleaner at the banks Canary Wharf HQ, stood up and asked why he and his colleagues were paid only £5 an hour for night work.
Chair William Aldinger did not respond, and only 20% of shareholders,
including Mr Durrant, voted or abstained against the deal.
Some of the basic assumptions the government is making about the virtues
of private involvement in the public sector are flawed, to put it nicely.
First is the notion that private involvement is going to save money.
Since the private sector
is only involved in order to make profits.
If the contractors are making profits, its because theyre
cutting corners with pay, conditions and quality of materials. The link
between a badly paid workforce and a poor quality of services is well-documented,
let alone the morale of the service users and providers.
Fortunately, its not all bad news. The governments commitment to end the two-tier workforce in local government is a considerable victory for UNISON. It ensures that all staff taken on to privatised firms from now on will receive the same pay and conditions as directly employed staff.
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CASE STUDY: SOUTHWARK Two years ago, the multinational WS Atkins won
a £100 million five-year contract with Southwark to improve
its failing education system. WS Atkins had no experience in education, though its then chief executive, Robin Southwell, formerly of BAE Systems, tellingly said education was a target rich environment. But he has since resigned, WS Atkins failed to
make profits out of Southwark schools, and last September 80%
of the companys share value was wiped out. So last month
they pulled out of the Southwark contract. As there was no contingency plan in place for such an eventuality, staff and pupils will certainly bear the brunt of the chaos. Meanwhile, for want of any better ideas, the council
and the Department for Education and Skills are putting together
a tender for another company to run the schools for a year. Its been appalling, says branch secretary John Mulrenan. When it came to light that 80% of the companys share value had been wiped out, it was immediately clear that cuts were being made from the education services to bail out the rest of the company. There was a freeze on recruitment, with huge numbers of vacancies, including educational social workers, unfilled. Bills went unpaid. The council had to underwrite the utility bills because Atkins hadnt paid them. Since last September its been a downward
spiral from a very low base. Atkins has blamed its withdrawal on the fact that Southwark altered the terms of the deal, making it no longer financially viable. The council claims it was only acting on government guidance. The government claims they were only guidelines. But Local Education Authorities have to deal with
these kinds of complexities on a day-to-day basis, without the
privilege of being able to just walk away from a difficult situation. Atkins brought no benefit to the children of Southwark, so in that sense were happy to see them go, says John Mulrenan. But its appalling that they can just abandon the contract. They are not accountable to the local community. They are only accountable to their shareholders. |
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