Time to reclaim public services

To coincide with this year’s Davos Conference, Oxfam has just released what has become an annual shot over the bows of the global plutocrats.who assemble in that Swiss resort at this time of the year. And this year’s publication focuses on ….public services….just in time to serve as a nice intro to this post. So read Public Good or Private Wealth? (Oxfam 2019) with the rest of this post.

I realise I’ve been muttering all these months about the importance of public services – but have been very frugal on references.
The most valuable source for me on privatization was the Public Services International Research Unit at the University of Greenwich which, very sadly, now appears to be closed? Their last publications seems to be this report on benefits, costs and processes of Public ownership of the UK Energy System – in 2016

The other important briefing source has been the Transnational Institute which, in 2017, produced a superb 250 page report Reclaiming Public Services - analyzing the way that 1500 cities throughout the world have managed to get rid of the privatized bodies which had made a mess of things.

In 2009 the same body had helped publish Hilary Wainwright’s Public Sector Reform – but not as we know it - which remains one of the very few clearly-written documents on the subject (see “recommended reading” below)

Unusually, the United Nations has now added its voice to the critique of privatization with a major report recently which details the appalling effects on poorer countries of the privatisation model which the World Bank and IMF continue to peddle. The report is 25 pages long and the English version can be read here.

Last summer I offered a crisp summary of my thinking about administrative reform – a summary which has, I think, withstood the test of time…..

-       In 1989 “the state” crumbled – at least in eastern europe…   30 years on. how do we assess the “huge efforts” to make its operations more “effective”??

-       15 question offer a key to the most interesting writing on the matter. 

-       Different parts of the world have their own very different approaches and ways of talking about reform. English language material has tended to dominate the literature; but

-       Scandinavians, Germans and French let alone South Americans, Chinese and Indians have also developed important ideas and experience - of which English-speakers tend to be blithely unaware.

-       Two very different “world views” have held us in thrall over the past 50 years….a “third” and more balanced (eg the “new public service”) has been trying to emerge

-       We seem to be overwhelmed by texts on reform experience – but most written by academics. Where are the journalists who can help the public make sense of it all ?

-       At least 8 very different groups have been active in shaping our thinking about “reform” efforts

-       These are - academics, journalists, politicians, think-tankers, global bodies, senior officials, consultants and an indeterminate group

-       each uses very different language and ideas – with academics being the most prolific (but tending to talk in jargon amongst themselves; and therefore being ignored by the rest of us)

-       Some old hands have tried to summarise the experience for us in short and clear terms. The lesson, they suggest, is that little has changed…

-       What is sad is how few “social justice” campaigners seem interesting in this issue. Hilary Wainwright being an honourable exception…..

Of course, the “huge efforts” were external (mainly EC) and financial – the “local elites” have had their own “exploitative” agendas and lack a single gram of altruism in their bodies…

Good Reads

Readable generalist books – the last 25 years have seen astonishingly few such books (in the English language)

Dismembered – the ideological attack on the state; Polly Toynbee and D Walker (2017) a clear analysis by two british journalists

How to Run a Government so that Citizens Benefit and Taxpayers don’t go Crazy ; Michael Barber (2015). A clearly written toolbook by Tony Blair’s favourite consultant

The Fourth Revolution – the global race to reinvent the state; J Micklewaithe and A Woolridge (2015) Editors of no less a journal than The Economist give us a breathless neoliberal analysis

The Tragedy of the Private – the potential of the public; Hilary Wainwright (PSI 2014) an important little pamphlet

Public Sector Reform – but not as we know it; Hilary Wainwright (Unison and TNI 2009) A rare readable case study of a bottom-up  approach to reform

Democracy Inc – managed democracy and the specter of inverted totalitarianism; SS Wolin (2008) the doyen of American political science takes the American political system apart!

The Essential Public Manager; Chris Pollitt (2003) A critical analysis of the political and technical aspects of the search for effective public services

The Captive State – the corporate takeover of Britain; George Monbiot (2000) A powerful critique of the nature and scale of corporate involvement in our public services

Change the World; Robert Quinn (2000) Simply the best analysis of the process of social and organizational change

Reinventing Government; David Osborne and Graeber (1992) The book which started the New Public Management revolution.

More specialist recommended reads

Supporting small steps – a rough guide for developmental professionals (Manning; OECD 2015)

A Governance Practitioner’s Notebook – alternative ideas and approaches (Whaites et al OECD 2015)

Rethinking policy and politics – reflections on contemporary debates in policy studies ed C Ayres (2014)

Reinventing Organisations; Frederic Laloux (2014)

People, Politics and Change - building communications strategy for governance reform (World Bank 2011)

Governance Reform under Real-World Conditions – citizens, stakeholders and Voice (World Bank 2008)

Public service trade unions

The International Trade Union Confederation

European Trade Unions (ETUC)

https://publicservices.international/resources/publications

Public Services InternationalTUC (Trade Union Council) UK

Privatisation exposed!

Time was when Chile (under General Pinochet) was the test-bed of how far right-wingers could go in destroying a society and country. Now it’s become the turn of England – with its successive neo-liberal Governments pushing privatisation as far as it can go. Not just railway and health services – but now even policing. Thank God for Scottish Devolution which has spared my country from this madness – although, sadly, not the rail privatisation nonsenses which I blogged about a month ago.

"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)"

Yesterday saw elections in England and Wales for Police Commissioners. Apparently one of the big issues is the extent to which police services should be privatised. Have a look at this article which recounts the criminal record of one of the biggest private contractors in this particular game. 

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 

Everything for sale?

Last September, I wrote with some indignation about a Romanian journal labelling an article I wrote for them "left-wing”. Despite my work as a Labour Party Councillor in the 1970s and 1980s (the last 5 years on a full-time basis), I was always opposed to its statist bias. Put this down to the influence of Karl Popper, Ivan Illich and Paulo Freire. As a result, my main contribution to politics in the West of Scotland was to drive an agenda of support for community structures and inititatives. When the Labour party had its left-right split after its 1979 defeat, I was left feeling homeless – with neither option attracting me. And my suspicion of some attitudes in state professionalism and ambivalence about public sector trade unionism led me to view with some sympathy some of the Thatcher policies on contracting-out and privatisation of public services.

I feel, therefore, I can be fairly objective in assessing the results of the privatisation which has swept the globe in the past 30 years. With the exception of gas and electricity, I think the results have been disastrous. This post is written for open-minded readers who want some guidance on useful material on the issue - particularly from the British experience (which has, after all, been at it for 30 years now).
For how privatisation of water, social care etc have panned out I mentioned recently the Public Services International Research Unit of the University of Greenwich which has been giving great briefings on the consequences of privatisation globally for more than a decade.

Privatising the UK railways is perhaps the greatest disaster story – with subsidies to the private rail and track companies being almost three times (at constant prices) the subsidies which british Rail received – and the level of consumer comfort, convenience and satisfaction at an all-time low. Christan Wolmar is the great historian of UK rail privatisation

The English academic, Julian le Grand, was one Tony Blair’s advisers and promoter of the idea of releasing market forces into British social services such as health and education.
Perhaps the text which best captures the hopes and fears is The House of Commons Select Committee on Public Administration 2005 report - Choice, Voice and Public Services and, particularly the 190 pages of evidence it received from both sides of the ideological fence.

The most prolific writer on (and critic of) the privatisation of the british health system is Allyson Pollock – whose most recent book on the subject is NHS Inc. She also blogs occasionally about the issues. The UK government is now attempting (for England only) the most dramatic set of changes ever seen - wcich would effectively dismantle the public Health Service - here is the view of an independent peer (and medic) who was once a Minister of Health.

The role which market mechanisms do now play in education (and might further in the future) can be followed in the second volume of the House of Commons publication mentioned above. An acadenmic treatment is Education Management Organisations and the Privatisation of Public Education: A Cross-National Comparison of the USA and Britain and an angrier statement from a practitioner in Education for sale.
One of the most formidable books I have on my Sirnea bookshelves is Robert Kuttner’s Everything for Sale – the virtues and limits of markets (1996) which received the following accolade from the late economist Robert Heilbroner "I have never seen the market system better described, more intelligently appreciated, or more trenchantly criticized than in EVERYTHING FOR SALE." A New York Times review gave a useful summary of the book -

Mr. Kuttner's target is the total faith in the market-pricing system held by economists of the Chicago school (and by members of two allied scholarly movements in the fields of political science and law -- public choice and law and economics): their idea that whatever is must be optimal if it is the result of the operation of a market. More broadly, Mr. Kuttner wants to dismantle the view that markets essentially work and government interventions essentially don't. By relentlessly piling on example after detailed example of market failure and government success, he gradually makes the idea that all efforts to modulate the market are doomed seem like a blind prejudice that has been holding the nation inexplicably in its grip. If you're ever challenged to name ''just one thing'' the United States Government has ever done right, you'll be fully prepared to answer after reading ''Everything for Sale.'' There are all sorts of necessary social and economic goods, Mr. Kuttner says, that markets can't be relied upon to provide. Free markets underinvest in pure research, so government needs to finance it, or to structure the economy so that private companies can afford to conduct it. Government made us prosperous by creating the higher education system, railroads, canals, commercial aviation and the Internet. Moreover, markets generate problems -- pollution, dangerous products, economic disasters like bank failures -- so they need to be regulated. Regulation does not retard growth: ''The zenith of the era of regulation -- the postwar boom -- was the most successful period of American capitalism.'' Finally, markets fail to provide all citizens with such essentials as health care, physical safety and basic economic security, so these have to come from government.
Demonstrating an impressive mastery of a vast range of material, Mr. Kuttner lays out the case for the market's insufficiency in field after field: employment, medicine, banking, securities, telecommunications, electric power. This material isn't exactly riveting, but it is presented clearly and convincingly enough to qualify as self-improving reading matter. Then he shows, over and over, how his primary villains, academic free-market ideologues, have pushed society in the direction of abandoning carefully constructed solutions to market failures -- solutions that were working quite well.
Mr. Kuttner is an unapologetic social democrat, a believer in America's moving in the direction of a Western European or Scandinavian-style mixed economy, with a bigger Government, higher taxes and stronger unions. One of the strengths of ''Everything for Sale'' is Mr. Kuttner's complete lack of the usual tendency in journalists and policy intellectuals to keep the discussion within the frame of the political possibilities of the moment. He wants to change the debate entirely. He insistently attributes our economic problems to political, not market, failure. For example, American blue-collar workers are underpaid, he says, because it isn't skills they lack but political power. Conversely, the solution to most of the market's deficiencies is not fine-tuning but ''a redistribution of economic and political power.'' As Mr. Kuttner explains (in italics), ''There is no escape from politics

Kuttner’s book deal, however, with the economic arguments. It does not really go into the politics. For that you have to read Colin Leys’s Market-Driven Politics (2001). It was Leys who helped me understand exactly what is meant by the dreadful word "commodification” and his book shows how it started to be applied in the UK in the 1980s to such fields as health and broadcasting. Leys is actually a development economist and most of his material on the internet is therefore on that topic – although an interesting preface to a new book of his called Total Capitalism is available here

The photograph is of Loch Lomond in Central Scotland - a National Park for public benefit and therefore free from development and market forces.