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.


✹ Try our new pay-as-you-feel subscription — you choose how much to pay.

Short story: Syrenka
A short story by Kirsten Irving

Utopia: Industrial Workers Taking the Wheel
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry – and its lessons for today

Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant

Bike courier Maggie Dewhurst takes on the gig economy… and wins
We spoke to Mags about why she’s ‘biting the hand that feeds her’

Utopia: Daring to dream
Imagining a better world is the first step towards creating one. Ruth Potts introduces our special utopian issue

Utopia: Room for all
Nadhira Halim and Andy Edwards report on the range of creative responses to the housing crisis that are providing secure, affordable housing across the UK

A better Brexit
The left should not tail-end the establishment Bremoaners, argues Michael Calderbank

News from movements around the world
Compiled by James O’Nions

Podemos: In the Name of the People
'The emergence as a potential party of government is testament both to the richness of Spanish radical culture and the inventiveness of activists such as Errejón' - Jacob Mukherjee reviews Errejón and Mouffe's latest release

Survival Shake! – creative ways to resist the system
Social justice campaigner Sakina Sheikh describes a project to embolden young people through the arts

‘We don’t want to be an afterthought’: inside Momentum Kids
If Momentum is going to meet the challenge of being fully inclusive, a space must be provided for parents, mothers, carers, grandparents and children, write Jessie Hoskin and Natasha Josette

The Kurdish revolution – a report from Rojava
Peter Loo is supporting revolutionary social change in Northern Syria.

How to make your own media
Lorna Stephenson and Adam Cantwell-Corn on running a local media co-op

Book Review: The EU: an Obituary
Tim Holmes takes a look at John Gillingham's polemical history of the EU

Book Review: The End of Jewish Modernity
Author Daniel Lazar reviews Enzo Traverso's The End of Jewish Modernity

Lesbians and Gays Support the Migrants
Ida-Sofie Picard introduces Lesbians and Gays Support the Migrants – as told to Jenny Nelson

Book review: Angry White People: Coming Face to Face With the British Far-Right
Hilary Aked gets close up with the British far right in Hsiao-Hung Pai's latest release

University should not be a debt factory
Sheldon Ridley spoke to students taking part in their first national demonstration.

Book Review: The Day the Music Died – a Memoir
Sheila Rowbotham reviews the memoirs of BBC director and producer, Tony Garnett.

Power Games: A Political History
Malcolm Maclean reviews Jules Boykoff's Power Games: A Political History

Book Review: Sex, Needs and Queer Culture: from liberation to the post-gay
Aiming to re-evaluate the radicalism and efficacy of queer counterculture and rebellion - April Park takes us through David Alderson's new work.

A book review every day until Christmas at Red Pepper
Red Pepper will be publishing a new book review each day until Christmas

Book Review: Corbyn: The Strange Rebirth of Radical Politics
'In spite of the odds Corbyn is still standing' - Alex Doherty reviews Seymour's analysis of the rise of Corbyn

From #BlackLivesMatter to Black Liberation
'A small manifesto for black liberation through socialist revolution' - Graham Campbell reviews Keeanga-Yamahtta Taylor's 'From #BlackLivesMatter to Black Liberation'

The Fashion Revolution: Turn to the left
Bryony Moore profiles Stitched Up, a non-profit group reimagining the future of fashion

The abolition of Art History A-Level will exacerbate social inequality
This is a massive blow to the rights of ordinary kids to have the same opportunities as their more privileged peers. Danielle Child reports.

Mass civil disobedience in Sudan
A three-day general strike has brought Sudan to a stand still as people mobilise against the government and inequality. Jenny Nelson writes.

Mustang film review: Three fingers to Erdogan
Laura Nicholson reviews Mustang, Deniz Gamze Erguven’s unashamedly feminist film critique of Turkey’s creeping conservatism

What if the workers were in control?
Hilary Wainwright reflects on an attempt by British workers to produce a democratically determined alternative plan for their industry

Airport expansion is a racist policy
Climate change is a colonial crisis, writes Jo Ram


32