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Private-sector parasites

Even Justice Secretary Chris Grayling is embarrassed enough to pull the plug on a privatisation

When even Justice Secretary Chris Grayling feels embarrassed enough to pull the plug on a privatisation too far, it's an indication of the toxicity of the Serco brand.

Grayling's decision over Hatfield, Moorland and Lindholme prisons in Yorkshire ought to herald fresh consideration of the role of private corporations' infiltration of the public sector in search of easy profits.

In common with its "competitor" G4S, Serco has lived well off the taxpayer, with 25 per cent of its contracts arriving courtesy of the government.

Service conglomerate Serco confessed earlier this week to claiming huge amounts of public finance in respect of tagging of offenders that it never carried out.

The company called this "ethically wrong," which is an interesting formulation.

A more prosaic description of its systematic financial claims for work it had not done would be fraud.

The government ought to have referred the activities of Serco and G4S to the Crown Prosecution Service, as it would have done any small company or individual suspected of attempting to defraud the public purse.

But it appears that these companies are too big to be charged just as the major private banks that provoked the financial crisis were deemed too big to fail.

The only sanction preferred against Serco and G4S was to bar from them taking on new government contracts pending a wider review of their operations.

This smacks of opportunistic crisis management by the government's privatising zealots, keeping these dodgy companies at arm's length for a while until the scandal runs its course before welcoming them back without fanfare.

Cabinet Office Minister Francis Maude has already hinted that this will happen, forecasting that G4S and Serco will emerge "renewed and stronger" from the government's "rigorous and extensive" review.

It is in the interest of both privateers and privatisers to suggest that the scandal over tagging was a one-off, but whistleblowers suggest that this is far from the case.

Emails and internal documents woud seem to indicate that a joint Serco-London Probation Trust contract to supervise community service projects has thrown up inaccuracies in reporting cases of offenders failing to attend.

Ministers are addicted to payment-by-results contracts with private providers because of their ideological conviction that profit-motivated schemes must be more efficient.

That has been the false premise rolled out across the public sector where publicly owned and operated national monopolies have been replaced by either private monopolies or an oligopoly that tends to operate as a cartel.

The public is far ahead of the politicians in drawing conclusions from the evidence of their eyes and expressing their preference for a public-sector solution.

Campaign for Public Ownership co-founder Neil Clark revealed recently that even Hungary's right-wing Prime Minister Viktor Orban is taking action against power companies far stricter than anything floated by Ed Miliband.

Orban is imposing a 20 per cent cut in energy bills and drafting a Bill to ban utilities from paying dividends, with the aim of returning natural monopolies to the public sector to operate on a non-profit basis.

He hasn't turned overnight from a conservative to a communist, but he understands that the electorate is fed up with seeing private parasites ripping them off.

Growing voter realisation that prisons, like gas, electricity, rail and water, belong in the public sector should find stronger reflection in Parliament rather than the current all-party worship of private profit.

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