Flickr/Daniel Bowen. Some rights reserved.
If someone told you that the UK’s water supply could be delivered much more cheaply than it currently is, you’d probably want to know why the relevant changes weren’t being made. Or how about if you were told that direct spending on rail has more than doubled since privatisation? You could be forgiven for thinking privatisation instead benefits the user, through cheaper fares. Not so, the cost of rail fares has shot up in real terms by 55% since 2010 according to the Office of National Statistics. Bus fares have suffered a similar fate and risen 54% since deregulation. Confused?
You may then wonder if privatisation brings better delivery outcomes, perhaps that’s why our politicians are so enamoured of it. Sadly not. Evidence shows that those costly deregulated buses offer a poorer service due to lack of competition in the market place, according to the Competition Commission.
At times privatisation and outsourcing failures can become a case of life or death. The launch of the NHS 111 service has led to confusion and increased pressure on accident and emergency departments. In recent days a raft of bad headlines has hit the scheme. NHS Direct are to pull out of the 111 contract, as it is now too expensive for them to run. Furthermore an undercover investigation by Channel Four’s Dispatches highlighted serious failings within the service. A manager at a 111 centre admitted: - “We don’t have the staff to deal with the volume of calls coming in. We had a very bad service. Realistically, on the weekends we (are) still unsafe.” Even before the 111 problems became headline news there was plenty of evidence to show the outsourcing of health services leads to increased costs and poorer quality of care.
The story is the same across the board. Whenever a service is privatised it generally costs more in direct public spending and costs the user more to boot. No one seems to win. Not the public, not the users of the service, certainly not the government who spend more. So why the drive for privatisation? It’s certainly not because it’s popular with the public. Repeated polls have shown huge support for a nationalised health service. And as far back as 2002, 61% of the public supported bringing the railways back into public ownership and that was well before the East Coast Mainline fiasco.
The strength of public opinion is no surprise. The failures and scandals associated with privatisation are endless and seem to hit the headlines weekly. Soaring energy prices and record profits by energy firms are regular front-page news. Back in 2010 the head of Age UK called the level of fuel poverty in the UK a national scandal and yet things continue to get worse. Another of the government’s reforms, the welfare reform plan is also in disarray, and the use of private contractors is simply not working.
From A4e to Atos, private sector providers have been dogged by underperformance and scandal. A4e were not only accused of failure but of fraud. And instead of responding to public concerns, these private sector providers bully their critics by threatening libel action.
The welfare providers aren’t the only ones to come under scrutiny in recent months. A review found G4S and rival security company Serco both over-billed the taxpayer by millions of pounds as part of their electronic tagging contracts. This latest scandal comes mere months after the G4S Olympics fiasco.
The facts show privatisation doesn’t work and the public is opposed to it, yet the government keep on insisting more privatisation is both needed and wanted. An example is their commitment to privatising the Royal Mail, despite fears that it will increase costs and reduce services to rural areas. Again this is a deeply unpopular policy, which the government seems determined to push through, despite warnings it could lead to a poisonous legacy for the Conservative party.
So why the drive for privatisation? Perhaps following the money gives an answer. Many Tory party backers are set to make a lot of money from sell-offs of public services such as the NHS. And more than one in four Conservative peers has a direct financial interest in the NHS re-organisation. It’s a cross party problem, links between New Labour MP’s and Peers and private healthcare providers have also been reported.
People are fighting back against this wholesale sell-off, though. Pressure groups such as Save our NHS and 38 Degrees have fought campaigns against outsourcing and privatisation and there is a strong campaign to save the Royal Mail but so far there hasn’t been one group dedicated to fighting privatisation across the board. With the launch of We Own It that has changed
We Own It want to be a voice for all public service users and as part of their launch they have carried out an in-depth poll into public opinion on privatisation; the results are startling.
Over 60% of the public believe that public sector organisations should be given first chance to run public services before contracting out to private companies.
80% of the public support in-house bids from the public sector whenever a service is put out to tender. More of those who intend to vote Conservative at the next election support this than do those planning to vote Labour. This seems to suggest that Conservative voters aren’t in favour of privatisation per se but want the best value for money, something research shows private providers fail at repeatedly.
When asked if organisations with a social purpose – such as charities, the public sector or non-profit organizations – should be prioritised in bidding for public services the response was once again in favour. 56.8% said yes, only 22.7% said no and 20.5% didn’t know.
A very significant question is whether or not the public should be consulted before a service is privatised or outsourced? The poll showed overwhelming support for this, with 79% of the public backing the proposal. A move to make ministers consult with the public before undertaking outsourcing could be effective in guarding against unwanted privatisation.
When asked if private sector providers should be as transparent as public bodies, 88% said yes. The research however shows that many people don’t fully understand the complexities of outsourcing. A majority of those polled wrongly believe that private organisations running public sector contracts are obliged by law to respond to freedom of information requests. In actual fact many private providers of contracts are exempt from the Freedom of Information Act (FOIA).
So far, sadly, the government seems incredibly reluctant to extend the Freedom of Information Act to cover private sector providers. The government stated they were concerned with the burden on business and therefore had no plans to extend FOIA obligations to contractors. Yet another example of how seriously out of step they are with the general public.
There was also overwhelming support within the poll for the public to have a right to recall private companies who do a bad job (supported by 88% of respondents). Currently all many companies face for failing is a fine, losing only part of a contract, or staff retraining as in the recent case of Atos failures.
In response to the wide gulf between the public’s concerns and ministerial action We Own It are calling for a Public Service Users Bill and a campaign to promote the public ownership option. There are ways for people to get involved listed on the website and hopefully with public support they can build a powerful movement. It’s time to turn the tide of privatisation.