Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.

×

Public services, private profit

The government’s white paper heralds an unashamed corporate takeover warns Bob Colenutt

August 2, 2011
4 min read

While the whole country was gripped by the Murdoch scandal, a far reaching white paper aimed at dismantling the welfare state was announced by David Cameron in a speech at Canary Wharf. Surrounded by top executives of the corporations queuing up to take over public services, he said the paper aims to ‘Loosen the grip of state control’ by opening up most local and central government public services to competition. Only the military, state security, the police and the judiciary will be exempt.

Much is made of the opportunity for the voluntary and community sectors to be service providers, but this is plainly a mere sop. The reality is that with the exception of a few very large charities, most third sector organisations, particularly those working at the local level, do not have the infrastructure or capital to take over huge swathes of public service provision.  The government knows this, and inevitably corporations such as Serco, Capital, General Healthcare, and G4S that are already active in this field will step in.

The predatory nature of private companies is hidden behind a government rhetoric of consumer choice but without any guarantee of public accountability or ability of the consumer to hold companies to account.  The contract and commissioning role of local authorities will be hugely important. Very few local authorities, or government departments, have the skills to be commissioners or have the legal and political nous to draw up contracts for the hundreds of services involved.  There is a very high probability of incompetent contract arrangements, poor quality services, over priced contracts, and corrupt relationships between officials and businesses.

The response of the trade unions to the white paper is that it will ‘break up the welfare state’.  They are rightly concerned about the loss of jobs, erosion of wages and conditions and the loss of universal provision of essential services ranging from care for the elderly to social housing to parks and environmental health.

The third sector has been much more ambiguous in its response. The influential Joseph Rowntree Foundation  welcomed the overall direction and applauded ‘the human element that people should be in the driving seat not politicians or bureaucrats’. Other charities and trusts, though some have misgivings about support for a Tory-led government, are excited by the prospect of winning public service contracts.

There is a real danger of a divide being created (and exploited by the government)  between public service workers losing their jobs and conditions, and the voluntary and community sector that is being promoted by the government as an enlightened alternative.

The white paper is also an important part of the government’s austerity programme. For example, the CBI was quick to say that the  public service reforms are ‘crucial for tackling the deficit’.  By this they mean that the reforms enable public services to be provided on the cheap by reducing the level of provision (restricting entitlements), and crucially by offering lower wages and conditions, and by using more volunteers. Costs will be lower but profits greater because payment to companies by public commissioners will assume existing wages and conditions.

But amid this bad news, there may be political opportunities and openings.  Firstly, the white paper contains contradictions, weaknesses and inefficiencies which will attract vigorous political opposition, not only from the trade unions. Local Commissioning will turn most public services into post code lotteries. Some areas and some groups will do OK, others will lose out. Inequality and unfairness will increase, and some have suggested the reforms will create chaos and mayhem.

It is not just the poor who are dependent on the public sector, but the middle class too, especially in health and social care. This will create political problems for the Coalition. It is also quite possible that when the third sector realises that it is not going to win many of the contrasts, it turn into an opponent of reforms.

All in all it is highly unlikely that the Public Services White Paper will get an easy ride. The left has a huge responsibility to draw together a broad alliance to fight it and restate the need for universal public services.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.
Share this article  
  share on facebook     share on twitter  

Fearless Cities: the new urban movements
A wave of new municipalist movements has been experimenting with how to take – and transform – power in cities large and small. Bertie Russell and Oscar Reyes report on the growing success of radical urban politics around the world

A musical fightback against school arts cuts
Elliot Clay on why his new musical turns the spotlight on the damage austerity has done to arts education, through the story of one school band's battle

Neoliberalism: the break-up tour
Sarah Woods and Andrew Simms ask why, given the trail of destruction it has left, we are still dancing to the neoliberal tune

Cat Smith MP: ‘Jeremy Corbyn has authenticity. You can’t fake that’
Cat Smith, shadow minister for voter engagement and youth affairs and one of the original parliamentary backers of Corbyn’s leadership, speaks to Ashish Ghadiali

To stop the BBC interviewing climate deniers, we need to make climate change less boring
To stop cranks like Lord Lawson getting airtime, we need to provoke more interesting debates around climate change than whether it's real or not, writes Leo Barasi

Tory Glastonbury? Money can’t buy you cultural relevance
Adam Peggs on why the left has more fun

Essay: After neoliberalism, what next?
There are economically-viable, socially-desirable alternatives to the failed neoliberal economic model, writes Jayati Ghosh

With the new nuclear ban treaty, it’s time to scrap Trident – and spend the money on our NHS
As a doctor, I want to see money spent on healthcare not warfare, writes David McCoy - Britain should join the growing international movement for disarmament

Inglorious Empire: What the British Did to India
Inglorious Empire: What the British Did to India, by Shashi Tharoor, reviewed by Ian Sinclair

A Death Retold in Truth and Rumour
A Death Retold in Truth and Rumour: Kenya, Britain and the Julie Ward Murder, by Grace A Musila, reviewed by Allen Oarbrook

‘We remembered that convictions can inspire and motivate people’: interview with Lisa Nandy MP
The general election changed the rules, but there are still tricky issues for Labour to face, Lisa Nandy tells Ashish Ghadiali

Everything you know about Ebola is wrong
Vicky Crowcroft reviews Ebola: How a People’s Science Helped End an Epidemic, by Paul Richards

Job vacancy: Red Pepper is looking for an online editor
Closing date for applications: 1 September.

Theresa May’s new porn law is ridiculous – but dangerous
The law is almost impossible to enforce, argues Lily Sheehan, but it could still set a bad precedent

Interview: Queer British Art
James O'Nions talks to author Alex Pilcher about the Tate’s Queer British Art exhibition and her book A Queer Little History of Art

Cable the enabler: new Lib Dem leader shows a party in crisis
Vince Cable's stale politics and collusion with the Conservatives belong in the dustbin of history, writes Adam Peggs

Anti-Corbyn groupthink and the media: how pundits called the election so wrong
Reporting based on the current consensus will always vastly underestimate the possibility of change, argues James Fox

Michael Cashman: Commander of the Blairite Empire
Lord Cashman, a candidate in Labour’s internal elections, claims to stand for Labour’s grassroots members. He is a phony, writes Cathy Cole

Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part

Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper

Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s

Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach

Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.

Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite

Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead

Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee

Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power

The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced

India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya

North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero


32