Public and private confusion – (And, yes, there is an alternative)

[RH]

I wrote Public and Private Confusion in 2006, before the credit
crisis, before even Northern Rock was saved by the taxpayer.
NuLabbour’s mania for privatizing anything in sight was in full spate,
mostly, because the Tories had privatized all of the great state
industries, through contracting out public services piecemeal and the
greatly expanded use of private money in public projects to build
things such as new schools and hospitals using the Public Private
Partnerships (PPP) and the Private Finance Initiative (PFI). Public
spending was still burgeoning , although anyone who looked closely at
the still continuing fool’s paradise which was Gordon Brown’s boom
could see that NuLabour’s public spending was seriously out of control
as they looked at the deficits Labour had been running since 2002. –
http://livinginamadhouse.wordpress.com/2011/10/02/labour-re-writes-the-past-their-economic-management/
. But the British public did not know the half of it when it came to
the government debt being built up, because the frighteningly large
PPP and PFI obligations were still largely hidden as they were mostly
off the government books Enron-style.

The latest quantification of PFI liabilities alone is £300 billion
(http://www.guardian.co.uk/politics/2012/jul/05/pfi-cost-300bn) and
that could well be an under estimate because of many of the contracts
have renegotiation clauses at certain points and the PFI contractors,
or those who have bought PFI contracts as they are sold on by the
original supplier, hold the taxpayer over a barrel because the state
no longer has the capacity to either undertake the work itself. Even
where a re-negotiation clause does not exist or does exist but the
point is years away, it is a common PFI practice for contractors to
threaten to walk away from a contract unless their terms are improved.
There are also the costs arising where contractors do walk away from a
contract and the state has to step in or pay another contractor even
more inflated prices for the work.

The most troubling result of PFI costs is hospital trusts unable to
fund themselves adequately because of the ludicrous amounts they have
to pay for PFI work (http://www.dailymail.co.uk/debate/article-2165011/
PFI-Cancel-contracts-MPs-signed-dock.html), but there is another major
problem: the inability of PFI contractors to undertake work
efficiently or, as we have seen with the G4S fiasco and their
inability to provide security for the Olympics. So lax were their
recruitment methods their chief executive could not say if all those
recruited could speak English fluently or even at all (http://
www.telegraph.co.uk/sport/olympics/news/9399841/Olympics-I-dont-know-if-guards-speak-English-says-G4S-chief.html).

Despite a change of government, PFI contracts are still being signed
in large numbers by the Coalition (http://www.hm-treasury.gov.uk/
press_22_11.htm). More and more public core services which the vast
majority of Britons would think naturally belong in public hands such
as police support and large scale security operations are being taken
from the public sector and given to private contractors. In addition,
strategic assets such as the Government’s stake in stake in nuclear
power giant Urenco continue to be sold off (http://www.telegraph.co.uk/
finance/newsbysector/energy/8817089/Taxpayers-3bn-windfall-as-Urenco-
nears-10bn-sale.html). In short, nothing but nothing, including even
the armed forces, can be considered safe from the mania for turning
public service into private business. The situation is substantially
worse now than it was in 2006 in terms of the PFI debt being run up,
the privatization of essential public services by stealth (especially
the NHS) and the intention to sell off what remains of substantial
public assets, most notably the Royal Mail, in the medium term.

The purpose of Public and Private Confusion was and is to examine what
needs to remain in public hands, what should be brought back into
public hands, how public service might be improved and the effects of
privatization in all its guises.

Robert Henderson 23 July 2012

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Public and Private Confusion

(And, yes, there is an alternative)

Robert Henderson 2006

Contents

1. Introduction

2. What are governments for?

3. Why do we need public provision?

4. Public provision is a good deal

5. The moral value of general provision

6. Why should those who can pay for themselves pay for others?

7. What things should be public?

8. What should be provided directly by the state?

9. What should be provided indirectly by the state?

10. The railways – a classic public service

11. Safety

12. Public and private efficiency

13. What do we mean by efficiency?

14. Private enterprise providing public service

15. Public service inefficiencies and politicians

16. Other public service inefficiencies

17. What should public service workers be paid?

18. The right to strike

19. The ability of private companies to manage public services

20. Private money in public projects – “Buy now, pay later”

21. The London Underground – PPP in action

22. Capita

23. The morality of privatisation

24. Our general experience of privatisation to date

25. Private money in public service = a democratic deficit

26. When private becomes public by default

27. Corruption in public service

28. The behaviour of private companies

29. Charities

30. Does the market produce greater choice generally?

31. How government takes on obligations

32. Making personal private provision – the problems of investing

33. Supporting old age

34. The housing crisis

35. Social housing

36. Education ?

37. Healthcare

38. The Post Office and Royal Mail

39. How do we pay for better public services?

40. Does social provision corrupt?

41. Why is public provision being repudiated?

42. The nation state – the only vehicle for democracy

43. The future of public provision

44. Conclusion




Read more at http://livinginamadhouse.wordpress.com/2012/07/22/public-and-private-confusion-and-yes-there-is-an-alternative/