This was first written some two years ago but is still very relevant.
There is no real evidence that private companies are routinely any better at delivering a service than any other type of organisation. It follows that mimicking a private company in a public organisation such as the NHS does not of itself improve outcomes. Governments have for a long time been fixated on the idea that to emulate the private sector in public bodies would overnight make them more efficient. I would have thought by now somebody would have realised that in spite of many attempts the NHS has not achieved what successive government ministers have claimed for their reforms on taking up office. The internal market, the layers of bureaucracy and business managers have not radically altered the fundamentals of the NHS.
The same is true of the railways. The public purse is still having to subsidise the railway to much the same extent that British Rail was supported hardly fulfilling the extravagant claims made by a then Tory government at the time of privatisation.
There is one thing in common, the eagerness of private companies to get involved. There is also an unusual lack of resistance from the chief executives of the public bodies being sold off. This may reflect the fact that very few are ever made redundant but many do see their own remuneration soar to the stratosphere. Private companies do not take over state run enterprises for altruistic reasons. If they do not act in shareholder interest they are actually going against their own guiding principles. Of course some of their avaricious dreams do not materialise; the eastern railway service to Scotland was a case in point which has conveniently disappeared from the radar since re-nationalisation.
Who is facilitating this process of privatisation? It has to be the central government, the owner of these public corporations. Individual members of governments and MPs in general seek a mandate at elections which has at core the benefit of all voters but how many voters see realistic improvements in the public services which are exclusively driven by the privatisation of the service. It is a small global elite of mega rich individuals who most benefit from these actions of governments. Of course it is true that many ordinary individuals have direct or indirect holding of shares in private companies. An example oft quoted is pension schemes but one could argue that the erosion of pension benefits is as a result of the owners of private pension providers seeing too much of the pot slipping from their grasp and who have altered the playing field accordingly.
Why do governments so readily facilitate this handover to the private sector? Individuals in government may well be themselves members of the mega rich but there is also a sufficient number of MPs recruited from an ever narrowing strata of society with close ties to the mega rich to make it difficult for any stray MPs from other parts of society to resist the self-interest which immediately surrounds them as soon as they enter politics. They are drawn into the fold whose own preservation and advancement requires them to support the interests of this global fraternity of the elite mega rich.
David “the NHS is safe in my hands” Cameron has been able in just two or three years to enormously advance the grip that private companies have on public bodies from the NHS to schools the prison service and even our justice system. John Major privatised the railways in a conventional fashion in full public view. This time round, the introduction of the private sector has been more nuanced. In full public view most people have not yet realised the extent to which the private sector have been given access to rich pickings in the NHS. Partly this is through the need for stealth in the face of possible public opposition but also because there are parts of the NHS that are not and never will be profitable. In other words this is best left to the public purse to fund. While Twitter in particular has been a mouthpiece for condemnation of the process, the mass of ordinary people seem unaware of what is going on and the mainstream media have been curiously quiet. The recently enacted Health Act has removed the obligation on the Secretary of State to provide health care for all the population, at the same time allowing private companies to tender for any part of the NHS they think might be profitable. This alone should have brought protesters onto every high street in the land.
What companies in the private sector benefit from this access whether covert or through direct sell-off? They are are mostly large multinationals. They are certainly not British owned specialist organisations. It follows that profits and in some cases expertise does not remain in Britain. When it had an empire, Britain exploited many countries around the world . Today Britain is heading towards the same situation as those colonies; dependent on the whims of global largely foreign companies for the health of its economy. For example, the British car industry was allowed to die and yet today we have a smaller but thriving car industry entirely foreign owned. Companies competing for NHS business fit the same profile. That type of company has the sole purpose of maximising profits.
Surely this process can be reversed. This might be quite difficult if private contracts are cleverly written but there is also no sign that Labour will put a stop to it when they return to power. By not offering something radical Labour under Milliband may well lose the next election and that will allow the present government to continue to give global companies more and more rich pickings from Britain’s public services. Nothing will actually be removed from public ownership but effective control will be in private hands. If this were to result in better services there might be room for tolerating the situation but there is absolutely no reason to be so hopeful. Similar inefficiencies and waste will mean an actual reduction in the services if overall costs are to be reduced as every private company needs to pay its board of directors extravagantly and make regular handsome dividend payments to shareholders.
Being pessimistic it is probably too late to restore Britain’s public services to public ownership and provision.