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Caroline Lucas MP is wrong: the Public Service Users Bill is a bad idea

Brendan Martin, 22 January 2014

What with the Serco and Group 4 scandals, the revival of East Coast rail under public management and the profiteering of energy and water companies, the case for public service outsourcing and privatisation in Britain has never looked so worn.

A generation after Conservative governments sold off telecoms, energy, water and the railways, and forced local government and the NHS to replace direct labour with cheap contractors, people have had enough.

The trend in public opinion is confirmed by polling for the We Own It campaign, and today Green MP Caroline Lucas presents the campaign’s Public Service Users Bill in the House of Commons, with the support of MPs in the Labour, Lib Dem and Plaid parties.

I must declare an interest: I am a member of We Own It’s advisory group, a relationship that involves my being asked for advice for time to time by the campaign’s energetic leader, Cat Hobbs, who then politely ignores it.

Admittedly, I am in a minority on the advisory group in regarding the Public Service Users Bill as a bad idea, and other knowledgable commentators, such as John Tizard, have also welcomed it.

The Bill aims to force local authorities and other public bodies to:

  1. Make public ownership the default option before any services, national or local, are contracted out to the private sector.
  2. Require there to be a realistic and thorough in-house bid whenever a service is put out to tender.
  3. Ensure there is full consideration of public opinion before any service is privatised or outsourced.
  4. Give the public a right to recall private companies running public services poorly.
  5. Require private companies running public services to be transparent about their performance and financial data (as in the public sector).
  6. Make private companies running public services subject to Freedom of Information requests (as in the public sector).
  7. Give social enterprises and mutuals, as well as public sector organisations, priority in tendering processes.

As the author of a critique of public services privatisation worldwide published more than 20 years ago (In the Public Interest? Privatisation and Public Sector Reform , Zed Books, 1993), what could I possibly object to in that list?

Well, for what it is worth -- and We Own It decided it was worth nothing! -- here is my view on each of those seven points:

  1. Just when the case for privatisation and outsourcing has never been so weak, the idea that public ownership needs an administrative advantage is exactly the wrong message, and anyway this provision could and would be gamed so that democracy would be weakened not strengthened.
  2. It beggars belief that Lucas is arguing that her bill would bring more democracy when this provision would be yet another central government imposition on the will of local authorities to exercise their judgement about what is best for their citizens.
  3. What does that mean? Don’t we already have enough examples of governments and public agencies staging phoney consultation exercises to justify their predetermined plans? This would bring more of the same -- at additional public expense.
  4. Be careful what you wish for! There is no way such a provision could become law without it also applying to public providers, giving the very corporations this bill is intended to disempower yet another route to growing their market.
  5. Great idea!
  6. Ditto -- and about time too!
  7. See my point 1, and add that Circle Health styles itself a mutual, the Coop Bank behaved appalingly when it was one, and the definition of what constitutes a ‘social enterprise’ is far from settled.

Clearly this bill is not an attempt to change the law, but is intended to raise the issues at a time of growing public concern. That's welcome -- except that the message it sends is so wrong for the moment!

The experience of privatisation and outsourcing have undermined both the case for them and their popularity. Now is the time to show how democratic governance and staff involvement can produce high quality and better productivity, and that they need no special favours to do it.

The alternative to the profiteering privatisers is democratic services of high quality that use public resources responsibly and efficiently. There is a growing understanding of how that can be done, and we need to share and grow that knowledge. That in turn will strengthen the political case for the resources they need to do their jobs properly.

We certainly need to get rid of the unfair advantages enjoyed by the privatisers -- see points five and six above, for a start -- but let’s not undermine democracy in a different way instead with more diktats from central government.

In short, this bill is an administrative solution to a political challenge. Obviously it won’t succeed, but more to the point it doesn’t deserve to.

  • Brendan Martin is founder and managing director of Public World.
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