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Public services: a necessary good

Submitted by hangbitch on 21 March 2009 - 9:56pm. | | |

With more than two million people unemployed, house repossessions on the rise and cash hard to find at home and in business, good public services - health, education, housing support, care services, and welfare and job support - become more important to more of us.

Unison notes local authorities already reporting a rise in demand for debt counseling, housing advice, employment guidance, community finance and business support. The DWP has had to take on extra staff to cope with growing demand. 
 
It is hardly the time to again play the private sector lottery with funds meant for the public sector. Nonetheless, the private sector continues to line up for lucrative public services contracts (a market estimated  by union researchers to be worth about £79bn) - and public sector leaders continue to collude by promoting the highly inaccurate argument that private provision of public services is cheaper, more efficient, and inevitable. 

Pity for them that the public isn't buying:
 
In May last year, the Tory-held Barnet council in North London accepted - to the consternation of locals and staff - a cabinet report that proposed, in so many words, that the council consider outsourcing all council services to the private sector and/or external providers.

It was drastic, regressive stuff, even for Tories. On the bright side, I thought the report might turn out to be a suicide note (not to mention one of history's worst-written ones - will get to that shortly). The report failed, dangerously, to address or acknowledge the fact that even last year, the public had serious doubts about the private sector, and the wisdom of permitting the private sector to continue to provide public services (and fair enough, too - who in their right mind would trust the likes of HBOS or Capita to take their cash and meet a public standard with it? Who isn't aware of the catalogue of disasters that is the private sector's record in public service provision?

The report also failed to acknowledge that banks have played key roles in the privatising of the public sector - or of the trouble this could mean. As Paul Gosling observed in his 'Rise of the Public Service Industry' report last year, the banks' vulnerability may yet compromise public services:

'[The banks] provide finance, including by putting together infrastructure funds, may provide short-term and longer-term funding for acquisitions, acting as intermediaries in raising capital, for example in the issuing of bonds and advising clients and contractors in PPP and other contracts involving the public sector,' Gosling said, lining up the Royal Bank of Scotland, Barclays, Lloyds TSB, HBOS, Deutsche Bank and Macquarie as key players.

Little wonder that criers of the 'public needs private' mantra feel safest talking in code. The wonkspeak that Barnet council used to outline its thoughts in its cabinet report had to be read to be believed: the council was interested in 'developing capacity and shrinking the organisation,' and 'transformation of service delivery (which it'll certainly achieve if the private sector gets in the mix, if only for the disastrous)' and 'resourcing the future,' whatever that means.
 
More worrying was the council's declaration that it would 'look to scale down to a size which would mean it delivering only what the local authority must deliver to achieve efficiencies and improved services for residents,' for all the world as if these last two weren't mutually exclusive. That cabinet report was one for the books, all right. Although cagey to a fault, it managed to make the council's intentions all too clear. 
 
Certainly, residents and unions got the point. It didn't take long for them to hear about the council's plans, or to get extremely upset about them. Well-attended protest followed well-attended protest as Barnet residents raged against the council - to good effect, it appears.
 
Badly compromised already by the Icelandic banking fiasco (Barnet had about £27m invested in Icelandic banks), a bitter, and as-yet unresolved two-year dispute between its outsourced careworkers and the Fremantle Trust, the aggressive pursuit of exaggerated financial settlements by existing private partners like Catalyst Housing, and local fury at recent council proposals to close down the sheltered housing service and make welfare rights unit cuts, the  council has been forced to delay a decision on its proposed guillotine drop on inhouse service provision.
 
Which gives us time, over the next few months, to use Barnet as a nice little case-study (have been doing this with Hammersmith and Fulham for a while), as we look to describe the shambles that is public service provision in the modern age.
 
Disciples of the 'public sector bad, private sector good' school have been allowed to bang on for far too long, bad mouthing the notion of public provision of public services, even as their beloved private sector has failed utterly to deliver. 
Barnet council's indulgent aim is to distance itself from direct provision of public services altogether (despite a now-comprehensive body of research on the problems), and to focus its lofty attentions on strategy. 'To free up the council to focus on strategic activity, it is proposed that we explore the feasibility of developing a special purpose vehicle... the council’s direct service delivery role will shrink as its strategic capacity expands...'
 
And what will these freed-up strategic minds focus on? On making money, of course - and eliminating services that don't lend themselves to sales. Like so many councils before it, Barnet fondly imagines a world where it spends your tax money setting up joint venture companies with private partners, and then selling services to other public bodies - for all the world as if other public sector bodies were in the market for council services.
 
We'll get to that, though. 
 
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