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TUC 2018 Years of neoliberal austerity have left Britain crying out for an alternative

Outsourcing and market fundamentalism have failed the country and the public, writes LEN McCLUSKEY

I ARRIVED here in Manchester angry. Angry at the failure of a neoliberal dogma that has resulted in the spectacular collapse of four high-profile outsourced and privatised projects, for which no-one is being held accountable or punished.

Carillion — two much-needed new hospitals in Liverpool and Birmingham lie mothballed, while the failed construction and outsourcing giant’s apprenticeship programme appears to have been a sham scheme.

Birmingham Prison — the government forced to take over from G4S after the chief inspector of prisons said it had fallen into a “state of crisis.”

Virgin Trains East Coast Main Line — taken back into public ownership after the third complete failure of a private operator on the line.

Northamptonshire County Council — outsourced everything, down to a handful of in-house staff, unable to provide even core services and finally voting to scrap itself in an apparent attempt to remove itself as an embarrassment to the government.

How many failures of privatisation will it take for the Tories to recognise the utter bankruptcy of outsourcing and abandon their ideological obsession with market fundamentalism? 

With billions of pounds of NHS contracts in the hands of private contractors, including at least £2 billion held by Richard Branson’s Virgin empire, how catastrophic must that failure be?  

When will they accept the evidence that outsourcing does not work and that keeping work and jobs in house saves money and, in the case of east coast railways, improves passenger satisfaction and profits?

When multibillion-pound contracts are abandoned by private companies as unprofitable or those companies fail so utterly to deliver that the state is forced, time and again, to step in, ministers have clearly lost the non-intervention argument.  

Trade unions have, for decades, been a lone voice in warning that the private sector was not fit to run our public services. 

Services that save our lives, care for our sick and our elderly, educate our children, punish criminals, keep our streets safe and clean and get us from A to B are not there to be monetised by boardrooms and subject to short-selling by spivs and speculators.

We haven’t been listened to, including in the past by many in our own party, but surely now enough must be enough. No longer should government be handing over public money to companies that head to the casino intent on gambling on the fate of our public services. 

What kind of a Britain do the Tories want? Clearly one where profit is always put before people, to the extent that the directors who broke Carillion, with the result that thousands of workers lost their jobs, over 300 apprentices were made redundant at a time of severe skills shortages in the construction sector and companies in the supply chain went to the wall, have kept their bonuses and got top new jobs in industry.

Far from being punished for their grotesque failure to spot the warning signs of Carillion’s imminent crash, senior partners at the big four accountancy firms are to enjoy a share of nearly £590 million in revenues. 

And former Carillion managing director Mark Davies has been rewarded with the position of MD for HS2 by the private sector firms Balfour Beatty and Vinci.

But we shouldn’t be surprised. Ten years after the bankers broke the banks, big business bonuses are back and the government still refuses to regulate, so another 2008-style Lehman Brothers meltdown is possible. 

At any less lunatic time in British politics, the Carillion scandal alone would have brought a government down. 

Yet ministers are acting as though it’s business as normal and, in doing so, are risking the further collapse of companies with public-sector contracts, with yet more workers losing their jobs and the taxpayer picking up the tab.

As information continues to emerge about the collapse of Carillion, the need for a public inquiry to lift the veil obscuring the firm’s collapse grows. 

The description by senior business analysts of it acting like a “Ponzi” scheme — and let’s be clear, that means an investment scam — should also mean providers of public services having to be transparent on issues of company governance and ownership structures, employment, remuneration and tax practices.

All outsourcing should be based on a public interest test, with clear criteria and in-house provision as the default, while reform of directors’ duties to make them commit to the long-term success of their organisations should make anyone with an eye to copying the Carillion business model think again.

Unite has already raised serious concerns about the awarding of a 12-year contract to outsource Ministry of Defence firefighters and defence workers to Capita, despite the company issuing a profit warning and recording a financial health score of just three out of 10.

Capita has been forced to borrow over £700m after racking up losses of £513m yet is now responsible for thousands of workers who ensure the safety of our military bases in Britain and abroad and who protect military equipment in war zones. Where is the business case for that?

How long before the government is forced to step in to run Capita’s MoD projects, while it and its right-wing economic outriders still refuse to accept that big business has no business in this work? 

We know that Britain can and should be better than this. Our country is crying out for an alternative to austerity economics and neoliberalism. And Labour, for the first time in nearly 25 years, is offering it.

Len McCluskey is general secretary of Unite.


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