Sale_sign

Under the current market-orientated regime of the Coalition Government, we have slowly been witnessing the endless sale of our state services to private companies. The provision of public services are now increasingly in the hands of private suppliers, thanks to the governments ruthless obsession with privatisation. The Con-Dems’ list of give-aways began with bookmaker, The Tote, and currently ends with Royal Mail. From a sale that made the government an estimated £3.3 billion, the 500 year old public service is the latest public service to belong to private institutional investors.

However, Royal Mail is only the latest on a very long and ever expanding list. The sad reality is that private contractors have been slowly and quietly taking over just about every state service imaginable for a while now. Through attempts to outsource services funded by government into the private sector, our public institutions are progressively becoming privatised bit by bit.

So far private contractors have taken over employment provisions traditionally run by the Department of Work and Pensions; the delivery of adult social services; call handling and other duties formally carried out by the police service and asylum support services on behalf of the UK Border Agency. The prison service has also be conquered, with now 13 prisons in the UK currently being run by private companies according to the Ministry of Justice.

The National Health Service is no stranger to this privatising frenzy either. So far, the national NHS direct helpline has been replaced by private providers who have their own regional contracts, and February saw the introduction of Britain’s first  (but probably not last) privately run NHS hospital.  More and more NHS hospitals are also providing private/ self-funded treatments to the public according the British Medical Journal, and as speculation has it, the government is even considering privatising part of the NHS Blood and Transplant service!

There remain few state services not yet conquered, but don’t worry – plans are in place.

70% of the UK’s 106 year old public probation service is set to be outsourced into the private sector, with bidding for contracts already taking place. Parts of the education system, child social services, London fire brigade and the UK road network are all to be outsourced very soon. And, as if all of this wasn’t enough, most recently it was announced that a £1.6bn deal with an American company will see the RAF’s helicopter Search and Rescue service (one of Britain’s most admired services) taken over.

The government is even talking about outsourcing the provision of defence – a private contractor could soon be responsible for managing the Ministry of Defence’s entire UK defence programme! Now it’s become quite clear that the government is privatising pieces of every possible state service, and as new public suppliers are taking over the reins, what we are ending up with is a public sector made up of publicly owned, but privately operated services.

The government truly believes that private operators ‘do’ public service better. They say this approach brings in competition –they think service providers will compete for contracts leading consequently to a better service delivery. For example, outsourcing NHS services to competing private contractors will apparently give service providers more of an incentive than there is now to deliver the best service to patients. Privatising the probation service will apparently ensure better reductions in reoffending because of the competition between alternative rehabilitation providers.

Cost efficiency is another justification.  The assumption here is that private contracts will be able to do more for less, whilst also curbing public spending (and we know how much the collation like doing that). In the eyes of the government, this is merely a form of modernisation – moving from our outdated public service approach towards the more efficient private/public combination model used in other parts of Europe.

However, it looks rather doubtful that privatisation will lead to better services or lower costs.

Some services previously privatised in the past may have been successful in terms of delivering better services; BT for example saw real improvements, but the services being privatised this time round are different. We are not talking about telecommunications, banks, airways, railways and water. Services like prisons, probation, the NHS and search and rescue are currently being run by experts who focus on and meet the needs of the public. How could private contracts possibly to a better service? If anything, they will be led by profit driven companies competing over costs to the detriment of the service. Money making will be put before the needs and wants of the public.

It’s also unlikely that competition will create incentives to be more efficient and cut costs. History has shown us that without the regulation of government, costs can actually increase. Outsourcing may mean that most of these services remain government owned, but this doesn’t mean they will remain government regulated. Public spending may fall for now. But, it’s important to remember that as the government spends money on public services it also generates money in return; this is called the multiplier effect. So, if all funding is lost from public services, this positive feedback is lost.

The Con-Dems are merely making instant cash through new contracts, and the reason for it is probably much more to with the run up to 2015 than anything else. By 2015, as you can imagine the government will have made a fair bit of money, so they can adopt a positive spin, saying  ‘look what a great job we have done!’ They will boast about how much they have supposedly reduced the deficit through their austerity policies and welfare reforms that have curbed public spending.

However, the short sweet reality will be that they actually sold off half of Britain! We may just be witnessing outsourcing now, but there is no doubt this is the first step towards full privatisation in the near future. What happens then, when we have no state assets left and the quick cash made from sales has been consumed?

BY: Rachael Davey