For the trade unions, the government’s proposals to extend the role of the private sector in public service delivery was akin to a hand grenade being dropped into the midst of the general election campaign. We were all asked to embrace a radical shift in government policy about which there had been very limited consultation with those most affected and very little thought-out preparation, as has since become painfully clear.
These developments beg the question as to how, after all the elaborate re-working of the party’s policy-making procedures in order to make them more inclusive and accountable, such a sudden development can happen. No-one in their right mind would believe that the government could deal with an issue like foot-and-mouth or the Balkans war through Labour’s policy structures. But this issue seems exactly the sort of question for which the policy forums were designed.
Some of the problems the public-private issue has caused since the election have arisen from the frankly arrogant way in which the question was raised during the campaign. And it is taking a very long time for the penny to drop that secretive control-freakery is not the way to advance any policy agenda.
But now the issue is on the agenda. For ASLEF and others in the railway industry, the question of private sector involvement in providing a public service is not an abstract one. We have lived that theory for the past six years. Before that, of course, we lived the reality of chronic under-investment in a publicly owned industry.
Private sector involvement in the railways has made a bad situation far, far worse. That is not just a trade union view but, I believe, now a national consensus. Sadly, the government is the only part of the community not yet sharing the view that we need a much greater ‘public’ element in this particular partnership.
Although we have still not seen the details of the government’s proposals, schools and hospitals will, we assume, be handled differently from the railways. But there is still cause for concern. The crisis surrounding the North Durham PFI hospital is not surprising, if only because the company running it – Balfour Beatty – is, to say the least, well-known to us in the railway industry. It is the familiar story – cutting corners, poor planning, charging for almost everything that isn’t actually a medical necessity.
Three general points arise from consideration of North Durham hospital and the privatised railways. First, ministers must remember that in handing over service delivery to profit-driven companies, there is a built-in tendency towards cost reduction which will, ultimately, start to affect the delivery of the services themselves.
Second, there are no adequate or satisfactory public control mechanisms for ensuring that standards don’t slip and that contractual commitments are honoured.
Third, privatisation leads to fragmentation – either immediately or further down the road as operations are spun-off, sub-contracted or whatever. This compounds the problems of getting value for money and may lead to operational chaos as well.
So why do it? This government is trying to address the legacy of a generation of under-investment in many basic services in Britain. However, it has tied its hands in almost every conceivable way when it comes to delivering that investment. No tax increases for the better off. Stick within European Central Bank guidelines for public finances, so we can be ready to join the Euro when the political moment seems right. And leave the Treasury in undivided charge of all public spending.
The government has ended up turning to private business almost by a process of negative elimination. I believe it is the wrong answer to the right question. The right answer is to have the taxation courage of our public service convictions, forget about the ECB, tell the Treasury it is socialism’s servant, not its master, and get public money moving. Better that, surely, than a Railtrack in our hospitals and classrooms.