Wednesday, July 18, 2012


Neither Public nor Private Seem to be Able to Provide Good Public Services

In Monday's Times, William Waldegrave warned Conservatives "never to make the mistake of falling in love with free enterprise"...people who think private companies are always more efficient than the public service have never worked in real private enterprise".

What a strange world we are suddenly in. Not so long ago, there was a near consensus that 'private' would always beat 'public' sector in terms of efficiency and value for money. I grew up in the area of nationalisation, working as a porter for 6 months for nationalized British Rail as a porter on Shrewsbury station. What I saw there scarcely impressed me with the merits of collective ownership.
Later, up in Manchester I realised the Gas Board fitters offered consumers an official price for their work and the 'foreigner' one if they came in early and did the job off books at a lower rate. So the nationalized industries were both inefficient and corrupt. The idea that private was preferable to public grew up partly as a result of the perceived failure of Britain's version of socialism: nationalization.

However, things began to change. Rail privatization has never worked properly; journeys are up, demand is high but our rail travel is the most expensive in Europe and not especially efficient. Private Finance Initiative (PFI) projects whereby private companies built hospitals and schools then leased them back to the state, kept costs off apparent government debt but increased the real price of such public facilities by some £25bn. Tories invented PFI but we had Gordon Brown to thank for making it an orthodox technique of gove2rnment; despite its excoriation of Brown on this point, the Coalition continue to initiate PFI projects which our children will be paying for long after our generation has passed into history.

Then we had G4 in the 1990s,hired to transport prisoners yet failing to do so without a risible level of escapes. Next came the total failure of the banks to manage their industry, allowing their own greed and incompetence to cause a meltdown comparable with the Great Depression. Then we had A4e, the company championed by Cameron and founded by its pouting chairperson Emma Harrison, took millions of taxpayers cash but was subject to widespread fraud as it failed to find jobs for the unemployed.

Finally we have the modern version of G4, G4S, a worldwide corporation operating in 10 countries and given the hugely valuable contract to guard the Olympics. Unable to provide the promised personnel, its hapless CEO, Nick Buckles was torn to shreds by the Treasury Select Committee yesterday, where he had to confess his company's conduct had been a 'humiliating shambles'. Sounds familiar? Inefficient and corrupt? Private sector business was supposed to lead us out of recession according to Osborne. The result has been another humiliating shambles so far. Privatisation as an panacea is clearly sadly lacking: government of whatever stripe has got to find a blend of public and private which gives taxpayers the services they deserve without ripping them off.

Let me conclude by quoting Waldegrave's excellent piece again: 'My experience tells me there is no incompetence whatsoever of which the public sector is capable that cannot be matched by the private sector.'

Having been employed by large companies in both sectors I'd echo William Waldegrave's quote from your last paragraph. But the private sector has always been much better at hiding its cock ups from the media. PR rules our world...

PS Featured in Simon Hoggart's week jokes (ha ha) column eh? V impressive...
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