Labour party plans to end privatisation of public services

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Carillion was a British multinational facilities management and construction services company which liquidated in January 2018 | Daniel Sorabji/AFP via Getty Images

The current government has consistently failed to fix the serious problems created by its’ privatisation of public services, which has directly impacted on the lives of many citizens. Those needing the support of services have found them less accessible, conditional and often, rather than alleviating hardship and socioeconomic exclusion, the private sector, contracted in tandem with government policies, has contributed to actually increasing the vulnerability of marginalised social groups, exploiting them for profit.

Poorly conceived contracts have created cost increases that surpass the costs of in-house services, and the oversight of the contracts is poor, the government is vulnerable to corruption and profiteering. The scandal of G4S and Serco charging the Ministry of Justice for tagging offenders who were dead shows just the visible surface of how bad things can get.

G4S, for example, has left a wake of human rights abuses on a global scale, and we have to question how on earth such highly controversial companies manage to secure successive government contracts involving working with vulnerable populations. The Ministry of Justice is still spending millions on tagging offenders with G4S and Capita despite the tagging scandal because, despite all of the chatter about ‘market competition’, it has not actively welcomed in or competently procured new entrants in the market.

In the wake of the collapse of Carillion, a succession of scandals involving large British companies like G4S, Serco and others, and the zig-zagging share price of outsourcing giant Capita, now is the right time to rethink the UK government’s approach to the private provision of public services. 

Any government that claims it wants to ‘take on vested interests’ wherever they may be must look first at how it itself has created – and become dependent -on a select number of vested, incumbent private suppliers. In practice, when the government claim ‘efficiency’, that generally means lower wages and substantially reduced services. When they mention ‘economies of scale’, that generally translates as constructing the contracts in such a way as to leave only the largest companies eligible to bid for them.

When the government use the word ‘incentives’, for the profiteering companies, those are perverse incentives. And when they say ‘competition’,  the government is refering to a handful of companies barely compete with one another at all but instead operate as an unelected oligarchy – a shadow state.

A Labour government would end the outsourcing of public service contracts that involve close contact with vulnerable groups, because of ongoing, grave concerns that people are being put at risk by private contractors such as Atos and Capita. The party has drawn up the plan in response to what is described as a series of outsourcing disasters. 

This would mean addressing the controversial assessments for disability and illness related social security, NHS care, the treatment of people in detention centres and prisons, and failures over recruitment and substandard housing for Armed Forces personnel, bringing those services back ‘in house’. 

Under the Labour’s party’s plans, when an outsourced contract expires or is terminated, central or local government will be required to assess whether a service involves significant contact with ‘at risk’ groups, poses a threat to people’s human rights, or entails the use of ‘coercive powers’. People ‘at risk’ are defined as those who rely on state protection, be they prisoners, hospital patients or social security recipients. 

If the answer to these criteria is “yes”, then new statutory guidance would be used,  which will lessen the grip of the private sector over our public services. After years of privatisation, it’s become clear that perverse incentives – the profit motive and ‘efficiency’in particular – have led to very poor service delivery and caused distress and harm to many citizens who have needed to access support, such as social security or healthcare. Private firms have performed notoriously badly, most often prioritising private profit over meeting human needs, while costing the British public billions of pounds.

However, there may be exemptions to the Labour party’s new rule, where:

  • The contract does not fall under a statutory definition of ‘relevant contract’.
  • The value of the contract is below a certain threshold.
  • The contract is between local authorities (or between a local authority and another public authority).
  • The public authority can demonstrate that it has ‘good reason’ to override statutory guidance.

The Labour party has repeatedly criticised the outsourcing of assessments for Personal Independent Payments and for Employment and Support Allowance, saying that this has led to a complete breakdown in trust between disabled people, the assessors and DWP decision-makers. The Ministry of Justice was forced to take control of Birmingham prison from the contractor G4S, after inspections found that prisoners were regularly using drink, drugs and violence, and corridors were littered with cockroaches, blood and vomit last year. The plan comes after a series of high-profile outsourcing controversies.

Andrew Gwynne MP, Labour’s Shadow Communities and Local Government Secretary, said: “For too long the British public have paid the price for outsourcing.

“The Tories’ dogmatic commitment to markets at all costs has delivered sub-standard services at inflated prices. And when they fail, as they often do, it’s the taxpayer that picks up the bill.

“Labour is proposing a radical new settlement that gives people the power to end outsourcing and decide for themselves how best to deliver the services they need.

“For too long this county has been run by and in the interests of a small few who are all in it together.

“It’s time to shift the scales and bring democracy and accountability back to government, and put power in the hands of the many”.

The plan is most likely to be backed by unions, but may cause concern for some councils  under severe financial pressure after years of cuts to their funding.

The pledge is also part of a wider Labour strategy to return public services to public ownership. It reflects that Labour is serious about implementing major democratic changes to the economy, to make it more inclusive.

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The threats to public health care in the UK.

Outsourcing in the NHS is officially said to be about cutting costs and improving efficiency, but such reforms, have really helped create healthcare markets that simply promote inequality among patients and healthcare workers and erode the public nature of healthcare provision.

There is also a very obvious limiting factor to a ‘market’ in healthcare: those in most need of healthcare are least able to pay the ‘market price’ for it – the elderly, very young, people with mental illness and those who are chronicically il , many of whom are poor. So, for private healthcare to be profitable for more than just the wealthiest minority, it still requires public funding.  The government, however, have systematically refused to accept this, despite the empirical evidence that verifies the damage being done to the poorest and most vulnerable citizens.

 


I don’t make any money from my work. I am disabled because of an illness called lupus. If you want to, you can help me by making a donation to help me continue to research and write informative, insightful and independent articles, and to provide support to others going through disability assessment, mandatory review and appeal.

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12 thoughts on “Labour party plans to end privatisation of public services

  1. However, there appears to be still no commitment by the Labour Party to have individuals and orgs accountable for decisions made not in line with Human rights legislation.

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    1. That is down to those people affected. Labour can only hold them accountable in parliament – and they do. It’s up to us to take cases to court. The legisation is in place for us to do so – thanks to Labour’s Equality act and Human Rights act, which means we can have our case heard in UK courts, rather than having to travel to Strasbourg.

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  2. Hmm Mays hubby who sits on the board of a hedge fund is it in control of these company’s winning government contracts has if it is then it’s fraudulent trading on a grand scale

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  3. Labour first needs to hold up its hands and admit tont Blair’s nu labour were responsible for a large part of outsourcing in the health and social security sections.

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  4. Well the first thing they need to do is to ensure we fully leave the Eu and not with the treaty reMAYn has colluded with the Eu to create, because until the Eu public services procurement regulations can be scrapped from our law the government has no choice but to continue with this ridiculous outsourcing bo matter which party is in power,

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    1. Seriously?? The Conservatives under Thatcher introduced neoliberalism in the UK and outsourcing/privatisation is going to happen regardless of whether or not we leave the EU. It’s what the Tories are about. See the US – same thing there.

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