Link to this page: https://www.socialistparty.org.uk/issue/540/6227
Fight Labour's welfare privatisation
JAMES PURNELL, secretary of state for the Department for Work and Pensions (DWP), has announced that he intends to let private sector companies cherry pick whatever DWP services they wanted to provide. Contractors, who already eat up half the budget of Job Centre Plus (JCP), will no longer have to wait for the government to decide which services are put out to tender.
Under new government proposals they can knock on the government's door and bid for any services they want. Obviously they will bid for the easier services that can make them the most money and leave more challenging services to what is left of the civil service.
Shortly after Purnell's announcement, about 70 trade unionists, civil servants, academics and voluntary sector representatives met at Cardiff university to hear presentations on the government's welfare reform proposals, including one by Stephen Timms, minister for employment and welfare.
Every contributor bar one questioned or condemned these government 'reforms' and their likely effects. Unfortunately the exception was Stephen Timms who intends to implement them regardless of evidence that they will not work.
Timms repeated New Labour mantras about private sector "flexibility", "specialisation" and "competitiveness". He claimed that JCP staff cannot innovate or be flexible enough to tailor different solutions to different parts of the country. Actually no-one is better than the hard-working Job Centre staff at doing the things the government says it wants to achieve.
What is inflexible and unwilling to change is the government and JCP management. In the debate, Timms extolled the virtues of Pathways, a private provider in Newport, because their flexibility allegedly helped a claimant who said that, unlike the JCP, their first question was "would you like a cup of coffee?"
"That is the kind of transformation we want the welfare system to bring" Timms said. But John Walters, a PCS rep from Port Talbot, pointed out that JCP staff were forbidden by DWP management from allowing hot drinks on their desk!
PCS union general secretary Mark Serwotka said the experience of private sector involvement in welfare provision over six to eight years had already uncovered fraud, corruption and falsification of records. Some private contractors had walked away from their contracts or gone bankrupt.
Many claimants felt they were forced into any old job to get them off benefits so the private contractor would be paid rather than providing long term work for the claimant.
The government is doing this not because the private and voluntary sectors are more efficient but to try to reduce the public sector. Already 30,000 jobs have been lost in the DWP. Some DWP workers were told their jobs were surplus to requirement three weeks after winning a public servants of the year award.
With all its queues and faults, Mark said, when a person went into a Job Centre in the past the Job Centre staff's job was to help them to access a whole range of services and benefits regardless of what they came in for. Now one of DWP management's main aims at Job Centre Plus (JCP) is to reduce "footfall" - to get rid of people and tell them to go or phone somewhere else.
Steve Davies, senior research fellow at Cardiff university, said there is no evidence that private sector provision of DWP services has been more efficient than by the public sector. In fact the whole private-sector process is inefficient. Markets have to be created in welfare provision and the market has to be "incentivised", i.e. made worthwhile for private providers to enter the market. Already private contractors provide about a third of welfare provision.
The "third sector", the voluntary sector, is used as a Trojan horse by the private sector to open up opportunities for privatisation. The director of public services at bosses' association the CBI said the voluntary sector was its "weapon of choice for those engaged in the continuing battle over public sector reform". Charities and voluntary organisations will be transformed into private companies by having to compete against private companies for public sector contracts.
A government-commissioned study concluded that the cost effectiveness of private providers and JCP was the same. In the Action Teams for Jobs, the private sector providers met 78% of their job entry targets while the JCP teams met 140% of their targets. Yet the government wants to expand private sector provision. A campaign is needed to stop them.
In The Socialist 2 July 2008:
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