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Surely it’s time to read the last rites for the privatisation agenda

Carillion’s collapse gives the lie to the myth that ‘private is best,’ argues JOHN PHILLIPS

THE tragic collapse of Carillion should serve as a warning that the selling-off of public services for personal and private profit has had its day.

Privatisation has been the economic orthodoxy since the early 1980s when Margaret Thatcher sought to transfer the entrepreneurial spirit of a grocery store in Grantham into the market for public service provision. 

Since then, over two million workers have been transferred to the private sector and our prized national assets have been sold off at artificially reduced prices. 

For the past 40 years, we have been consistently told that the free market is the key to a vibrant and healthy economy and that the public sector cannot be trusted to deliver essential services.

Our experience as trade unionists, and more importantly that of our members, has been totally contradictory to the promise of more efficient public service delivery where improved quality is accompanied by cost savings for budget-squeezed public bodies. 

In contrast to the myth that “private is best,” we have found extra cost, inflexibility and no added value to characterise the outsourcing model of services provision. 

The reality has been that, where savings have been achieved, it is all too often due to reductions in the pay and other terms and conditions of workers.

Public-sector privatisation has, unsurprisingly, been used as a means by which the collective bargaining influence of trade unions has become undermined and weakened. No surprise really that the privatisation and deregulation of many industries has occurred in highly unionised sectors, with the inevitable adverse impact upon traditions of collectivism. 

As privatisation grew and legal emasculation of unions took its grip, the government cynically shifted its focus to politically challenging industries with well-defined systems for collective wage determination and well-organised trade unionism. 

This has sadly led in too many cases to a decline in the principal means of protecting labour standards within our public service workforces, despite any private provider being susceptible to paralysis from a well-structured and led trade union in much the same way as public bodies are. 

The harsh truth, maybe, is that the movement generally failed to recruit, organise and mobilise outsourced workers who became the employees of private profiteers. 

We must, then, learn that lesson and organise more effectively around those outsourced workers who desperately need union protection.

Public-sector outsourcing is now a £120 billion business, yet it costs public services money that they can ill afford to lose. 
PPI and analogous “public-private partnership” schemes used to finance public capital projects have been ruinously expensive, and often run by investors based in offshore tax havens who refuse to contribute to the state from which they draw their profits. 

PFI is often nothing more than an accounting sleight of hand, designed to keep spending off the balance sheet but at enormous expense to both taxpayers and, again, our members’ terms and conditions of employment. 

Even the National Audit Office now pronounces that PFI is a dereliction of public value for money.

The policy of privatisation has scaled new heights since 2010, with the selling off of further enterprises, the preparing of our nationalised banks for re-sale to the private sector and the facilitation of further NHS outsourcing by way of the Health and Social Care Act. 

Let’s not forget, either, that the Tories have not been the exclusive architects of a love-in with the private sector, as the last Labour government embraced capitalism within the health service and education system and attempted to privatise Royal Mail. 

Any further Labour regime must learn from the mistakes of the past.

While the government’s ideological fixation with all things private holds steady, many public bodies across the political spectrum are deciding to bring services back in-house as funding cuts continue to bite deeper. 

New forms of public ownership are emerging too, such as the decision of Bristol and Nottingham City Councils to establish wholly owned energy companies that provide tariffs in the public interest.

Why are so many public bodies cancelling contracts with the private sector? 

It seems that saving money and improved quality of services are the drivers, rather than any counter-ideology to the Thatcher creed. 

Unnecessary expense, standards failures and an absence of trust in the ability to deliver are all key reasons why public services are being returned to public ownership.

Our movement must continue to oppose any additional financing of PFI projects, support steps to end contracts early and resist creeping privatisation of our public services. 

Transferring power back to our local communities and away from contracting companies will restore the local democracy lost from outsourcing and offshoring services.

We should also press any future Labour government to use public ownership as an opportunity to improve working conditions, strengthen collective bargaining and cease the exploitation of agency and temporary workers.

Our policies have not changed in the past 40 years, but now the rest of the country seems to be catching up with our way of thinking.

The privatisation myth has been well and truly exposed and it’s surely time to read the last rites.

John Phillips is GMB Wales & South West Region regional secretary

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