How profit is trashing public services

Submitted by Matthew on 16 January, 2013 - 11:09

Private companies are being given access to ever greater swathes of public services, buying the right to run for profit what ought to be socially provided to meet human need.

The Tories’ “Big Society” scheme was supposed to be privatisation with a friendly, local face — public services being run by local businesses and third-sector organisations as well as larger companies. In reality, only the big have prevailed in the “Big Society”; a handful of multinational capitalist firms dominate the provision of privatised public services.

Serco, a global corporation with revenue of over ÂŁ2 billion (to June 2012), has a vast portfolio of outsourced public contracts.

They run everything from GP services to railways to prisons.

Their operation of these contracts has been dogged by constant scandal and criticism, e.g. guards at the asylum seeker detention centres they run have been accused of abusing detainees.

In March 2012, Serco won the contract to provide almost all community health services for NHS Suffolk. 1,000 workers who had previously been NHS employees suddenly found themselves employed by a private company. The same month, it took over the running of cleaning, catering, housekeeping, and staff accommodation services in East Kent hospitals for 10 years. The contract was worth ÂŁ140 million.

There is an Orwellian edge to the reality a private company that provides public healthcare also running prisons and providing electronic tagging devices for offenders and asylum seekers. Serco has no core business — its business is winning outsourced public contracts.

Crawley-based G4S is the world’s third-largest private sector employer — only union-busters-in-chief Walmart, and Foxconn (the company with managers so oppressive they drive workers to suicide) employ more people. Its half-year turnover for 2012 was nearly £4 billion, and despite the well-publicised controversy over staff shortages (which required the military to step in), it earned £150 million for providing security for the 2012 London Olympic Games.

It operates six prisons in the UK and, like Serco, also runs services for the UK Borders Agency. In October 2012, G4S guards at Cedars (a UKBA “Pre-Departure Accommodation” centre near Gatwick for asylum seekers facing deportation) were found to have used “non-approved techniques” on detainees, including physically abusing a pregnant woman in a wheelchair. Two years previously, G4S guards were alleged to have beaten Angolan deportee Jimmy Mubenga to death.

Perhaps the best symbol for the Tories’ aspiration to unleash “the dynamism of the market” on public services is Capita, the company to whom the running of an entire north London borough council was effectively handed in December 2012.

Barnet Borough Council is a flagship for the Tories. It has been a laboratory for their experiments in private provision of public services, and the £320 million deal which saw Capita take over the running of almost all the council’s back-office functions could see 70% of its back-office staff lose their jobs. When the cost-cutting and profit-making is the main motivation in service provision, workers are disposable resources.

There is nothing innately progressive about state ownership. A totalitarian state that rigidly and violently controls economic life is no better than an entirely unregulated free market. But the welfare state, public education, and the National Health Services were concessions British capitalism was forced to make in response to working-class pressure, or out of fear of worse upheaval. The Tories’ fire sale of public services is part of a concerted attempt to recoup the losses suffered by the British ruling-class over the past six decades – with interest.

To stop privatisation, we need strong community campaigns backed up by workers’ organisation in both public and private sector. Our alternative is public ownership with democratic control.

Privatising schools

A mistake to your advantage in your benefit payments? It can happen, but it quickly gets clawed back.

But ÂŁ174 million extra which the Government paid out to Academies in error in 2012-3 will not be clawed back.

The overpayment, an average of ÂŁ100,000 per Academy, came from miscalculation.

There are now twelve times as many Academies as in 2010. Over half of all secondary schools in England, and many primary schools, are now Academies, directly funded by central government, exempt from national agreements on staff pay and conditions.

Bright Blue, a Tory ginger group, is calling on the Tories to move to allowing state-financed schools to be run for profit.

At present the fruits of Academies’ “market” success go to head teachers — one in ten paid above £100,000 — and to “executives” (six Academy chains bosses on at least £200,000 last year).

A report on 10 January by a commission headed by former Ofsted chief inspector Christine Gilbert found that “academies are finding methods to select covertly”, thus placing children of better-off parents in extra-funded schools.

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