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From The Socialist newspaper, 5 December 2009

Fighting Privatisation

The rot at the core of public services

NEW LABOUR'S big idea for its second term of office is more privatisation. They argue private companies can make profits at the same time as providing decent public services. New Labour claims all public services would benefit from bringing management in from the private sector. But GLENN KELLY dissects the gulf between Labour spin and the reality and experience of ordinary working people. In everything from rail, health, housing to BT, privatisation has been a disaster.

TWENTY YEARS of Thatcherism tore down many services but Labour has continued the destruction faster than the Tories dreamt of.

Even proposed increases in spending on education and health, came after what the Financial Times described as "three years of astonishingly tight control of public-sector spending."

Even this extra spending will barely have an impact. Public investment is in almost continuous decline. The share of investment by central government has fallen from 5% of GDP 30 years ago to 1.5% in 1998. It puts the UK at the bottom of the European investment league.

The Roof Over Your Head

WALK THROUGH any housing estate in Britain and you will see housing stock in a state of disrepair. This is after years of neglect, followed now by the wholesale sell-off of entire estates to the private sector.

In 1953, 220,000 new council homes were built. An average of 100,000 council homes a year were being built.

20 years ago local authorities controlled just over five million homes, 30% of all housing stock. 75,000 new homes were built every year.

Today councils only control 3.3 million homes, just 15% of the housing stock. Only 1,000 homes were built last year.

2,000 people sleep rough every night, 10,000 will be homeless over the next 12 months.

It would cost 20 billion to clear the housing repair backlog.

300,000 homes have been transferred to the private sector since 1998.

Councils are being bribed with an additional 12 billion to write off debts, only if they agree to transfer their housing stock. Stock transfers mean rent increases, lack of security of tenure, an increase in evictions and the decimation of thousands of jobs.

Nationalise the building industry under democratic workers' control and management. The building of one million homes per year would end the housing crisis, with decent housing for all at affordable cost.

Councils have just waved the white flag of surrender, there has been no campaign to demand resources from government as Militant, the Socialist Party's predecessors, successfully did in Liverpool in the 1980s.

Councils are spending millions, not on repairs but on videos to force people to vote yes for stock transfer.

Many tenants see no alternative but to vote yes. But where there has been an organised campaign, stock transfers have been stopped.

A recent UNISON survey showed you need an income of 38,000 a year in London to be a first-time buyer. In some areas of London this is 70,000 as housing costs soar.

Therefore teachers and council workers have put in claims for 4,000 London weighting.

The Health Scandal

OVER ONE million people, a staggering 2% of the British population, are stuck on NHS waiting lists.

Rheian Davies, registered mental nurse

Chronic underfunding has created intolerable conditions for health workers which, along with poor pay, has driven them out of the NHS. A Worcester GP recently said: "I only enjoy the first 40 hours of my working week but do not get much pleasure from the last 30."

A quarter of nurses surveyed between the ages of 18-44 said they wanted to leave nursing before the end of the decade. For Blair it is 'simplistic' to improve pay and conditions, instead they have 'stolen' nurses from developing countries.

Now they plan to make conditions even more intolerable by introducing greater privatisation. Policies such as the Private Finance Initiative (PFI) has had a profound impact on services. PFI is a mortgage on health services.

A private company builds and runs a new hospital and rents it back to the NHS. In the long run the NHS has to pay more to run the same services.

Tony Blair likes to say that the private sector has 'invested' 15 billion in the NHS but, at rates that would embarrass loan sharks, the health trusts will have to pay back 85 billion. This is paid for by cuts in services.

PFI = cuts

Research published in the British Medical Journal showed that the first 15 PFI hospitals had on average cut 31% of their beds.

The Socialist Party fights to take healthcare away from big business by nationalising the pharmaceutical companies and other companies leaching off the NHS.
Along with bringing private medicine into the NHS, this would unlock the billions needed to rebuild the health service, free at the point of use.
Bring health management and medical services under the democratic control of patients, health workers and the wider community.

Edinburgh's PFI-built Royal Infirmary replaced four of the city's hospitals with 200 fewer beds and 890 fewer workers. The project involving four private companies cost 1 billion compared to 180 million it would have cost if it was publicly funded.

In a Swindon PFI scheme, health services were forced to pay 43 million in initial subsidies to private companies, when to completely refurbish St Margaret's hospital would have cost 45 million.

It is estimated that by 2007 the NHS will be spending 4.7 billion on renting hospitals.

Blair's other 'big idea' is to cut out the middle man and send up to a million patients directly into the private sector with the NHS footing the bill.

This will damage the NHS in a number of ways.

The private sector will cost more than providing care under the NHS. It has higher administrative costs and it has to make a profit. They will cherry pick the easier 'profitable' cases leaving the most unwell patients to the NHS, putting more pressure on a decreasing amount of beds and NHS staff.

If patients develop post-operative complications, for example needing intensive care, the private sector will send them back to the NHS, creating more pressure.

The private sector could only expand to treat a million more patients by poaching more NHS staff, exacerbating already appalling staffing problems.

In 1996, the NHS spent 13.7 billion on services provided by the private sector. 46% of this went on the care of elderly and physically disabled people. 64% of inpatient psychiatric care, 57% of long-term residential care of people with learning difficulties and 34% of long-term residential care of elderly people was provided by private firms but paid for by the public.

There is no clinical or financial sense in using the private sector. Blair's aim is not only to give a backhander to his friends in big business medicine but to undermine the whole ethos of the NHS. One-third of registered nurses believe that patients will be charged for care under the NHS within ten years.

"I only enjoy the first 40 hours of my working week but do not get much pleasure from the last 30."
A Worcester GP.

Everyone 'irrespective of means, age, sex, or occupation shall have equal opportunity to benefit from the best and most up to date medical and allied services available'.
1944 White Paper, enshrining the principles of the NHS.

Crumbling Schools, No Teachers

THE SCHOOLS budget is worth billions every year, a big lure for private 'education' companies. Some have got their foot in the door by taking over local education authorities (LEAs) in places like Islington and Southwark.

Southwark's LEA was handed over to a building firm with no experience in running education. In Waltham Forest one of the firms involved in a privatisation scheme honed its education 'skills' in gravel extraction.

But after a long campaign, the Socialist Party and UNISON and the NUT teachers' union in Waltham Forest have fought off two companies who were after the LEA, a contract worth 200 million over five years.

Because of the campaign the council is split over what to do, now they are left with only one consortium interested in the contract.

The Private Finance Initiative (PFI) is also creeping into education with a 33 million scheme in Newcastle covering six schools.

Privatisation must be fought with national strike action of teaching and other staff involved with education.
Kick the private profiteers out of education.

Many schools are having a gun put to their heads - privatise maintenance or watch the building fall down around you.

There is a blame culture within education. Children, teachers, parents, anyone but Blunkett and Blair are to blame for any problems.

All the pressures from continual testing and league tables on the children and the workforce in schools has just resulted in education fit for only McDonald's and unskilled jobs.

One million children truant from school every year and there are around 100,000 temporary exclusions and 13,000 permanent exclusions every year. Yet Labour's answer is to increase police powers to pick up children.

No wonder teachers are leaving in droves, with 10,000 secondary school vacancies in England and Wales, up from 4,000 last September.

Council Services In Crisis

LOCAL COUNCILS are in a constant round of cuts. For example there have been 76 million cuts in Hackney, east London, despite the council's privatisation binge.

It handed over its revenue services to ITNet who have demonstrated a spectacular inability to run services. They have now been sacked but there are 17,000 outstanding benefit claims, mounting rent arrears and tenants facing eviction.

Privatisation in places like Hackney has meant profits for big companies and poorer services for the people who need them.

Much of the council tax we pay is not used for services but to pay back the banks. Hackney pays 65 million every year to the banks in debt repayments on its 797 million debt. The cost of servicing the debt is 420 per year for every person in Hackney.

We call for the cancellation of those debt interest payments to the banks to protect jobs and services.

Socialist Party members in the public-sector unions are fighting to organise council workers' anger and give a national lead.
If the top 150 companies were taken into public ownership under democratic workers' control and management, the resources would be released for decent public services.
For a democratic socialist plan of production and economy run to meet the needs of all.

Best Value

MANUAL WORKERS particularly suffered from Compulsory Competitive Tendering (CCT), under the Tories, which offered the choice between cutting jobs, wages and conditions and privatisation. Tens of thousands of workers were handed over to the private sector, with poor terms and conditions and bullying management.

Public-sector union UNISON now has 150,000 members in the private sector.

New Labour promised to end CCT but they introduced Best Value (BV) which is worse. CCT forced councils to market-test some services but under BV every service must be reviewed every five years.

Trade union leaders have either welcomed Labour's policies or been unable to see its dangers. UNISON leaders initially welcomed BV.

They say they are right behind us - that is where they are, leaving each branch to fight local battles individually. But we're fighting a national enemy, the New Labour government.

There are five million trade unionists in the public sector, an organised body who could take the privatisers on. Already there have been heroic struggles against privatisation in councils like Hackney and in Knowsley and Bolton to protect the 35-hour week for council workers. The 80,000-strong strike of Scottish council workers won a 5 per hour minimum wage.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 5 December 2009:

Vote Socialist

Defend The Right To Strike

Vote Socialist - For Real Change

Oldham Youth Resist Racist Provocation

New Labour's Flexible Friends

Asylum: Tories And Labour Play The Race Card

The rot at the core of public services

Macedonia Slides Toward Civil War

Unions Need A Political Voice

Bosses Provoke Postal Strike


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