Privatisation

I thought this was a spending review, the government providing the figures for the headline cuts provided in the so-called "emergency budget". In fact it was far more than that: it was a policy document indicating a shift towards a country with no public provision of services.

Download the Spending Review document and have a look at page 35 sections 1.86 to 1.90 in a section called "Sharing responsibility". This is nothing about deficit reduction, it is pure ideology, it is what Thatcher could never do.

1.86 A fairer and more responsible society requires greater freedom so all can play their part. The Spending Review builds on measures to provide new opportunities, new rights and new resources to enable all parts of society to play a larger role in providing services and strengthening community life.

There is the fairer word again. They have dropped progressive because it did not work, I guess they will drop the fairer word soon. I wonder how long it will be before we hear Thatcher's favourite word medicine?

1.87 The Government believes that while it should continue to fund important services, it does not have to be the default provider. This stifles competition and innovation and crowds out civil society. 

The important point here is the phrase does not have to be the default provider. In the NHS a hospital is often the monopolistic provider, it is the default provider. So how does the Big Society handle that? Read on.

To address this and create new opportunities for non-state providers, the Spending Review announces that:

Here create new opportunities for non-state providers suggests that there will be new providers in addition to the state providers (umm, the NHS). The problem with this (and in general with the concept of competition in services) is that there must be an over all (ie existing + new providers) excess of capacity. This is supposed to happen at a time when money is so tight that PCTs are now delaying all but the most urgent treatments until next April. There is no spare cash in the health budget so why will  an unproven, new provider take the risk?

• the Government will pay and tender for more services by results, rather than be the default provider of services. The use of simple tariffs and more innovative payment mechanisms will be explored in new areas, including community health services, processing services, prisons and probation and children’s centres. This builds on measures already announced to implement payment by results in welfare to work, mental health and offender rehabilitation services; and

First note that the NHS is not mentioned in the list of services. It is on their list, but the government knows that politically it would be dynamite to mention the NHS in a paragraph that is blatantly about privatisation. The paragraph starts by saying that they would prefer anything but the public service (the NHS). There is none of the careful language in other policy documents that have said that they will use "any willing provider" but only if they can provide at the quality and cost of the NHS. No, this says blatantly that the intention is not to use the existing public service (NHS).

• the Government will look at setting proportions of appropriate services across the public sector that should be delivered by independent providers, such as the voluntary and community sectors and social and private enterprises. This approach will be explored in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families.

This is a rather bizarre statement. Andy Cowper at Health Policy Insight describes it as "the government is still in the business of setting tractor-production quotas". The stateemnt reinforces what I said above. It is nothing to do with using the best provider, nor the most cost-effective provider, it is blatantly saying that the government will determine an arbitrary proportion that must be provided by non-state providers. At the beginning of the year I suggested that Lansley intended to produce an equivalent of the 1990 Broadcasting Act. This act of parliament mandates that 25% of TV and radio production broadcast by the BBC has to be from non-BBC suppliers. This government is clearly thinking of doing the same thing in other public services like the NHS.

1.88 These announcements to increase opportunities for all independent providers build on the Government’s existing commitments to extend specific rights to communities, citizens and employees to run and own services. These include:

• giving communities due notice and the right to buy or run public assets and services that might otherwise close or face significant reductions;

So in effect this is saying that if a school or hospital is due to close then "communities" can have notice to get together to run the service themselves. This does raise the question of why anyone would want to run a services without the vast underwriting of the government that a public services has. I can imagine such rights being taken up for a small village school, but not for a multi-million pound enterprise like an acute hospital. But the wording seems odd to me: the right to buy or run. Why are these exclusive? If you have bought such assets then why would you not want to run the service?

Anyway, call me a cynical bastard, but looking at the woeful NHS budget for next year and the severe pressure that the health service will be under (compounded by Lansley's ludicrous re-organisation) I can imagine that plenty of hospitals will go into debt over the next couple of years and face significant reductions.

• developing a new right for public sector workers to form employee-owned cooperatives and mutuals to take over the services they deliver which is being taken forward across departments; and
• giving parents, teachers or community groups the right to bid to start new schools.

So here is the derogation of responsibility that is ingrained in this government. This is saying that the state should not provide services, should not provide healthcare; that the NHS should not be publicly owned. Forget the nice sounding words cooperatives, mutuals and public sector workers, this is about privatisation. The director on a hospital board is a public service worker, but unlike a porter, or a nurse, or a pathology lab assistant, the director has the ability to find the private funding to buy the public asset that was mentioned above.

1.89 As well as new opportunities and rights, the Government will assist new providers by improving access to the resources they need. The Spending Review announces that:

The problem is that under the new regime service provider must provide more for less. The private sector know this and know that they cannot provide healthcare at the cost-effective rate that the NHS does. There has to be sweeteners, and this is what section 1.89 is all about.

• the Government will direct around £470 million over the Spending Review period to support capacity building in the voluntary and community sector, including an endowment fund to assist local voluntary and community organisations. As part of this, the Government will provide funds to pilot the National Citizen Service and establish a Transition Fund of £100 million to provide short term support for voluntary sector organisations providing public services. The Big Society Bank will bring in private sector funding in addition to receiving all funding available to England from dormant accounts;

This specifically mentions bringing in private funding to provide public services. The other figures are really small change. For example, my local hospital is a medium sized district hospital with 340 beds and has a turnover of £130m a year. It is valued at £75m. You don't get many such hospitals from the figures being mentioned for the capital of the Big Society Bank. Thus the money has to come from the private sector.

• to bring external investment and expertise into the public sector and share the responsibility and risks of reform, the Government will work with the financial sector, the voluntary sector and community groups to develop innovative equity investment opportunities in public services; and

This plethora of jargon is privatisation, pure and simple.

• cultural institutions such as museums will be allowed to use money raised independently more flexibly and establish trust arrangements that enable them to generate more funding from private sources. In addition, the Government will undertake a review of ways to increase philanthropic giving, and will announce further details later this year.

The government thinks we are American and that a wealthy philanthropist will be willing to throw money at our museums. Fat chance. 

1.90 To maintain the momentum for reform, and consult further with public sector staff, citizens and communities on how to deliver better services, the Government will publish a reform White Paper early in the New Year. This will set out further detail on the policies announced above.

So clearly the message is "the white paper on the privatisation of the state will be published next year". It is in my diary.