"Railways now cost the British taxpayer some three times more (allowing for inflation) than did state ownership and costing the passenger some 4 times more (and greater inconvenience) than equivalent travel in the rest of Europe. It is a marvellous case-study of, variously, policy development (on what evidence was the policy brought in and discussed?); democratic accountability (who wanted it – and has supported it?); civil service management (skill preparation) and neo-liberalism.
It was a mad scheme from the start (in 1993) – totally against basic economic theory (or what remains of it). Rail is a natural monopoly. Services cannot run against one another. So sections of the system are put out for tender by the State for 10-15 year “franchises”. About 2,000 companies are involved in these contracts and sub-contracts – with all the bureaucracy (let alone profit-taking) this involves. And that is before we bring into play the new regulatory systems set up to monitor targets and ensure that the customers and government were not being “taken for a ride” (excuse the pun) by the private monopolies. I do not pretend to understand the complex (and ever-changing) process by which public assets were sold up, franchises awarded and regulatory systems managed. A 2004 paper by Prof Stephen Glaister seems to give a lot of the detail – if you have the patience to follow it all.
The last 13 years have seen a lot of problems – train collisions; bankruptcy of RailTrack; huge rise in complaints – but they are small beer compared with the scandal which has now erupted over the contract for the West Coast line (London to Glasgow) which has just been cancelled due to irregularities (so typical for procurement processes)"
Another recent article reminds us of another financial scamwhich has saddled the British public with debts of more than 50 billion pounds.
The biggest privatisation disaster was undoubtedly the Private Finance Initiative (PFI), originally unveiled by John Major’s government but massively expanded under New Labour. Under PFI, private contractors pay for construction costs, leasing the finished project to the public sector for up to 30 years. The attraction was a financial con: PFI contracts take borrowing off the Government’s public sector balance sheet. They are expensive, not least because of the costly lawyers and consultants involved in the contracts, and because borrowing is twice as expensive for the private sector as it is for the Government.
The long-term cost to the public purse is shocking. Not long after the last election, it was reported that the NHS would end up paying £65bn to private contractors for hospital building, even though completion cost just £11.3bn. Back in May, the House of Commons Public Accounts Committee found that “the current model of PFI is unsustainable”, because the contracting process was so expensive, and the risk was transferred to the public sector even as investors enjoyed high returns - 22 NHS trusts reportedly face bankruptcy after being saddled with PFI debts.
As the recent failure of G4S to provide security at the Olympics underlined, the “private is best” dogma is kaput. But the era of failed free-market fundamentalism will not end unless Labour rejects its own history of privatisation. A break with the past is not just necessary - it would be popular, too.
And even some right-wing commentators are starting to wake up to the power of the corporate interests at work behind the privatisation drive
Treating hospitals as businesses…. has only got hospitals into trouble as they struggle to transform themselves into commercial enterprises, more interested in their profit margins than in their patients. It is a recipe for disaster to expect hospitals to behave like fast-food chains or clothing stores. Hospitals should be focusing every shred of their attention on improving their services for patients, here, in this country. Hospitals are not businesses; they are places that are funded by us, for us, when we become unwell.
Like the grubby men in string vests and gold sovereign rings who sit outside brothels beckoning gullible tourists, the Government is now attempting to pimp out the NHS to foreigners…..
It’s not the NHS as a product that is revolutionary and worthy of export, it’s the NHS as a concept. The main appeal of the NHS to people around the world is the fact that it is a cheap, effective and equitable way of delivering healthcare. It is the notion of a system that is free at the point of delivery, regardless of ability to pay, that makes it valuable. The great irony of all this is that if we wanted to export the real ethos of the NHS, as opposed to what might be represented by some bland, meaningless logo, then we would be going around encouraging foreign governments to reject market principles and develop a socialised model of healthcare. And this isn’t going to happen.
The reason why the NHS has not been replicated around the world is that attempts to introduce socialised medical models are strangled by corporate interest. Emerging, proto-capitalist economies are rich pickings for the multinationals that are already lining up to take over running their health systems. The idea that the NHS might become one of the circling vultures ready to swoop in before a fair, cheap model of healthcare delivery can be established makes me feel ashamed.
A Scottish writer has given us one of the clearest and most powerful critiques of the consequences of bringing the market and private contractors into health services
And the superb John Harris has done a typical video on how some citizens are fighting back against the attempt of one Council to privatiseall its services
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