Category Archives: Privatisation
The Telegraph reports that MP James Cleverly, who is in charge of the Tory election campaign, says that he is aware of individuals, including entrepreneurs and other business figures, some Jewish, who plan to leave the country if Labour were to win the election.
Would that be noticed? Many – like the Telegraph’s owners – already spend much of their time away from Britain.
Surely they could survive relatively unscathed, despite paying taxes in full and ‘coming to an arrangement’ with the currently short-staffed inland revenue service, paying their workers a living wage and bearing the costs of any pollution emitted by their businesses?
Mr Cleveley shows compassion for those whom he says are planning to leave, but appears to lack sympathy for the less fortunate. The Independent reported that, according to Parliament’s register of interests, Cleverly was one of 72 Conservative MPs voting against the amendment who personally derived an income from renting out property. He opposed – and therefore delayed – legislation which would have required private landlords to make their homes “fit for human habitation”.
When working with mayor Boris Johnson as Chair of the London Fire and Emergency Planning Authority, he was responsible for the closure of ten fire stations in London, after which an elderly man jumped from a burning building in Camden, following delays in the arrival of fire crews. The Fire Brigades Union had repeatedly warned that a tragic death of this kind would occur after severe cuts to funding of the fire service in London.
Under a government led by Jeremy Corbyn, as corporate tax evasion and avoidance on a large scale is addressed releasing funds for education, health and other important services, the 99% on lower incomes will welcome a living wage, a well-staffed fire and health service, homes fit for human habitation, appropriate care for the elderly and disabled and better employment opportunities as manufacturing and services are increasingly in-sourced.
And these millions have one asset: their vote.
On 20 July Labour’s Shadow Chancellor John McDonnell launched a new Labour Party document, Democratising Local Public Services: A Plan for Twenty-First Century Insourcing. (1).
A September paper by Richard Hatcher, which may be read in full here, discusses its implications for social care, referring to Birmingham as a case study. Edited extracts follow (several hyperlinks added):
Democratising Local Public Services commits a future Labour government to reversing four decades of outsourcing by local councils by legislating to ensure that the default option for councils is for the public sector to deliver its own services.
The section headed ‘How Outsourcing Has Gone Wrong’ identifies two key issues:
- poor quality of provision: there is now widespread evidence of failures in service quality in services provided through outsourced contracts’ (p12)
- and lack of public accountability in different forms: the Information Commissioner has noted that just 23% of the public polled thought that the activities of private providers of public services were accessible. Information about outsourcing companies can only be requested by the public if it is held by a public authority on behalf of that outsourcing company. (p13)
Hatcher points out that social care is the largest single area of council spending, most of which goes to external providers, and finds it very surprising that there is only one reference to social care in the 53 pages of the Labour Party report. This is a regrettable missed opportunity because social care exemplifies the two major problems with outsourced provision that the Labour party report identifies and is therefore a prime candidate for insourcing.
The Thatcher government, we are reminded, created a lucrative new market in social care by forcing local authorities to spend 85% of their social care budget in the private sector, decimating local authority provision.
Since then the transformation towards a market in adult social care has progressed steadily, with no attempt by any government to halt or reverse the trend. [ ….] In 1979 64% of residential and nursing home beds were still provided by local authorities or the National Health Service; by 2012 the local authority share was 6%; in the case of domiciliary care, 95% was directly provided by local authorities as late as 1993; by 2012 it was just 11%. This also means the bulk of the adult social care workforce – around 72% – is now employed in the private and voluntary sectors, along with another 14% employed by individual service users making use of ‘personal budgets’, leaving just 14% employed by local authorities.’ (pp7-8) 
However, the prospect of exceptional profits attracted big equity investors into this new market. They bought up small providers and opened much larger homes for maximum profit, employing staff, largely women, on low pay, according to Social Care as a Local Economic Solution for the West Midlands, a report by David Powell, New Economics Foundation, with Karen Leach and Karen McCarthy, Localise West Midlands, published in 2017 :
Built into every contract to a major provider will be the underlying need to deliver a significant return on investment
CRESC [the Centre for Research on Socio-Cultural Change] found that big care providers expect to offer 11% returns to investors (including costly debt repayments which often return to the parent operating company). The business models of the largest five residential care chain companies in the UK offer returns to investors that account for as much as 29p in every £1 of their costs – the second biggest drain on expenditure after wages.
The care ‘market’ is increasingly consolidating towards such providers. As of 2015, nearly 20% of all care beds were provided by the ‘big four’ care companies – Four Seasons, Bupa Care Homes, HC-One Ltd, and Barchester Healthcare. They are gradually increasing their market share – buying up small chains and taking over provision from family-owned homes. (p12) But now the care market is in crisis because the government cuts in local authority budgets have squeezed the flow of profits to the care businesses. More than 400 care home operators have collapsed in the last five years, including over 100 in 2018 (Guardian 12 March 2019).
Insourcing will be difficult as the social care market is highly fragmented. As Bob Hudson says :
There is no compact adult social care service that can be easily repatriated into public sector ownership. Rather the sector is characterised by many fragmented, competing providers. The care home sector supports round 410,000 residents across 11,300 homes from 5500 different providers (Competition and Markets Authority, 2017). The situation in home care is even more diverse with almost 900,000 people receiving help from over 10,000 regulated providers. (2018, pp1-2)
After a detailed seven-page Birmingham case-study of the privatised care industry, Richard Hatcher ends, “One section of Birmingham Council’s Local Manifesto 2018-2022 is titled ‘A Rebirth of Municipal Socialism’. It promises, “We will re-state the case for the municipal provision of services in Birmingham, heralding a new age of municipal socialism. And the Labour council in Birmingham will lead by example, calling time on the misplaced notion that the private sector always trumps the public sector by adopting a policy of in-house preferred for all contracts”. That was published in March 2018, a year and a half ago.
He asks “Where are the detailed plans to put this policy into practice?” and recommends Birmingham City Council to publish detailed plans to bring its out-sourced social care services in-house, open the books and make public these and all its other out-sourcing contracts so there can be genuine public accountability – and specifically for social care, the biggest sector of the Council’s outsourcing.
- The Labour Party (2019) Democratising Local Public Services: A Plan for Twenty-First Century Insourcing. http://labour.org.uk/wp-content/uploads/2019/07/Democratising-Local-Public-Services.pdf
- Bob Hudson (2016) ‘The failure of privatised adult social care in England: what is to be done?’, The Centre for Health and the Public Interest. https://chpi.org.uk/wp-content/uploads/2016/11/CHPI-SocialCare-Oct16-Proof01a.pdf
- Bob Hudson (n.d.) ‘Adult Social Care: An Irretrievable Outsourcing?’ https://www.healthcampaignstogether.com/pdf/Hudson%20Social%20Care%202018.pdf
- David Powell, New Economics Foundation, with Karen Leach and Karen McCarthy, Localise West Midlands (2017) Social Care as a Local Economic Solution for the West Midlands. https://neweconomics.org/uploads/files/West-Midlands-Social-Care-report.pdf
- Birmingham City Council website (2018) ‘Care Homes and Supported Living 2018’. https://www.birmingham.gov.uk/directory/55/care_homes_home_support_and_supported_living/category/1069
- CorporateWatch (2016) The Home Care Business. https://corporatewatch.org/the-home-care-business/#__RefHeading___Toc2989_782775029
- The Labour Party (2017) Alternative Models of Ownership. https://labour.org.uk/wp-content/uploads/2017/10/Alternative-Models-of-Ownership.pdf
- The Labour Party (2018) Democratic Public Ownership. https://labour.org.uk/wp-content/uploads/2018/09/Democratic-public-ownership-consulation.pdf
- Richard Hatcher (July 2019) ‘Co-production, social care and participatory democracy’. https://www.healthcampaignstogether.com/pdf/1907%2019%20RH%20co-production%20article%20v3.pdf In ‘Health Campaigns Together: The Debate over Social Care – New Additional Reading’ https://www.healthcampaignstogether.com/socialcare.php
- 10.‘Our Social Care System is Broken’. https://www.healthcampaignstogether.com/pdf/Social%20Care%20Leaflet%20draft%204%20final.pdf
Shining a spotlight on four government agencies: an educational psychologist, a cook, a farmer and an accountant
The relatively powerless are harassed: corporates survive censure unscathed
OFSTED had not inspected more than 1,600 schools that were judged “outstanding” by it for at least six years – and of those, almost 300 had not seen an Ofsted inspector for at least 10 years, according to a report by the National Audit Office – see chart on page 27 of the report.
The case of Waltham Holy Cross is ongoing. Last year the government decreed that Waltham Holy Cross would be handed over to Net, a chain of academy schools in May. As the NAO records, this has already happened to over 7,000 other state schools in England since 2010: public assets built and maintained by generations of taxpayers are being given away. Waltham Holy Cross parents made almost 100 freedom of information requests which revealed errors in the draft Ofsted report and that Net was being sounded out on “their appetite to take on this school” in January, over a month before the Ofsted verdict was published. News of teachers and parents there – and in other parts of the country taking action to prevent this ‘forced academisation’ may be read here.
In an article in the Times Educational Supplement (TES), head teacher Geoff Barton, the general secretary of the Association of School and College Leaders, said “Ofsted and the government are the source of much of the stress and anxiety on staff through an extremely high-pressure accountability system and concluded ‘the accounts above reveal an inspection system that appears in too many cases to be doing great damage. My sense is that it’s time to stop quietly accepting that the way Ofsted is, is the way Ofsted should be”.
This month. four years later, TES readers discussed overhauling Ofsted, a ‘toxic’ system. One letter, whose signatories included Dr Richard House, chartered psychologist, former senior lecturer in education studies, Dr Rowan Williams, former Archbishop of Canterbury and Sir Tim Brighouse, former schools commissioner for London, was provoked by a recommendation by Ofsted head Amanda Spielman to shut down what she labelled as “failing Steiner schools”. The signatories are founding a campaign to bring about the replacement of Ofsted with a new inspectorate that is ‘empowering, collaborative, and understanding and respectful of pedagogical difference’.
Unthinking adherence to FOOD STANDARDS AGENCY bureaucracy led to the unjust downgrading of a new small business, damagingly reported in local paper
As the public perception is that businesses with a one rating will give customers food poisoning, a cook-manager has criticised the food hygiene inspection system after her business was given a one rating out of five – though hygiene and food storage was rated highly.
At a (requested) pre-opening inspection by the council in March 2018, no reference had been made to the need for a staff manual and staff training procedures but this ‘one-person’ operation was ‘put on a warning’ for not having a staff training manual – though no staff was employed – and was told that a tick paper exercise (officially a ‘documented food safety management system’) is required for all aspects of work.
The work required to maintain cleanliness and produce wholesome food appeared to be discounted and a paper exercise – easily forged – was prioritised. The District Council inspectors were unhelpfully applying the rules of The Food Standards Agency, a non-ministerial government department, to the letter and not the spirit of those regulations.
Solution found and accepted: a whiteboard was put up in the workplace, a photo taken once a week and an online manual was printed.
On several farms which had passed inspections by the ASSURED FOODS STANDARD (Red Tractor) agency in July 2018 serious cases of animal abuses were reported in the media.
A farmer recently wrote an article in the Western Daily Press foreseeing the advent of similar tick-box regulations:
“What I have been pulled up on is the fact that I do not keep written mobility and condition records. These are not yet enforceable under the scheme – but I have reason to suspect they soon may be.
“The only thing that will be achieved by keeping written records will be the creation of more work for the assessor; more forms for him to sit down and read through and check; one more task to help fill his required nine-to-five working day.
“And let’s suppose I decided to cook up a completely bogus set of records. How would he even know?
“When the Red Tractor scheme was launched the president of the NFU (under whose wing it actually operates) was Ben Gill who told us all how vital it was going to be in supplying the nation with safe, wholesome food which consumers could buy with confidence while, equally, bringing more prosperous times for farmers.
“What I see now is an organisation riddled with pointless bureaucracy (I understand another tier of inspectors is in place to check on the assessors).
“I see, equally, an organisation which appears to operate dual standards: one for the soft-target, small producers like me and another for the industrial giants such as Moy Park, over whose portals the Red Tractor flag proudly flies but where recent footage captured undercover at Moy Park showed stinking, squalid poultry houses where chickens will be lucky to survive their miserably short allotted span”. He ended with two pertinent questions:
- if Assured Foods was aware of conditions at this plant why did it not intervene?
- And if it wasn’t aware, why not?
The FINANCIAL REPORTING COUNCIL, the UK’s accounting and auditing regulator, is regrettably funded by the audit profession and its board of directors is appointed by the Secretary of State for Business, Energy and Industrial Strategy.
Its monitoring of out-sourcing firms such as Capita and G4s in several sectors, including health, social, military and prison services has not led to effective disciplinary procedures – in fact they continue to receive lucrative government. The Financial Times reported yesterday that though its auditing of Carillion since 1999 is under investigation by the Financial Reporting Council, the value of new UK public sector contracts awarded to KPMG increased more than fourfold last year. In 2013 seven senior members of the FRC scheduled to investigate KPMG’s role in the collapse of lender HBOS, were current or former employees of KPMG itself.
Prem Sikka, professor of accounting at the University of Sheffield, has posted almost 400 FRC entries on the AABA website (now well hidden by search engines). A recent article adds news of another appointment: Revolving Doors: FRC appoint new member to the Audit and Assurance Council – former PwC and Royal Bank of Scotland exec .
Professor Sikka has said he is worried that the government is rewarding these firms with valuable contracts when they have been undermining the public purse through their involvement in several tax avoidance scandals (FT: 29.7.19).
The ‘soft targets’ are harassed: corporates survive censure unscathed
Despite evidence from at least eight sources, the Chief Executive of the Environment Agency says “It’s wrong to suggest that the state of England’s rivers is poor”
The Financial Times recently reported that only 14% of rivers in England met the minimum “good status” standards as defined by the EU Water Framework directive according to an Environment Agency report in 2018. In 2009 almost 25% did so. Water quality has deteriorated since 2010 when the Environment Agency handed responsibility for pollution monitoring to the nine large water and sewage companies in England.
Evidence supporting their report comes from the World Wildlife Fund, Windrush rivers campaign, Fish Legal, Marine Conservancy, European Environment Agency, NERC Centre for Ecology and Hydrology, Sewage Free Seas. It was quoted in England’s rivers: toxic cocktail of chemicals, antibiotic-resistant bacteria and untreated waste.
Sir James Bevan, Chief Executive of the Environment Agency, replied in a letter to the FT, “It’s wrong to suggest that the state of England’s rivers is poor (“Blighted by pollution”, The Big Read, June 13)”. He continued:
Water quality is now better than at any time since the Industrial Revolution thanks to tougher regulation and years of hard work by the Environment Agency and others.
Rivers that were so polluted that they were severely biologically damaged two decades ago are now thriving with wildlife such as otters, dippers and mayflies returning.
Over the past 20 years EA teams have taken more than 50m samples to monitor water quality around the country. The EU’s water framework directive means that the failure of one test can prevent a river from achieving good ecological status overall but this often does not tell the whole story.
During the last round of testing, 76 per cent of the tests used to measure the health of rivers were rated as good, and last year 98 per cent of bathing waters at 420 locations passed tough quality standards, compared with less than a third in the 1990s.
The EA has also required water companies to install new monitoring systems on combined sewer overflows (CSOs). By March next year more than 11,500 CSOs will be monitored as the first phase of this work is completed
It is not true that the EA simply relies on the water companies to tell us what they are discharging into watercourses. We carry out our own monitoring of rivers to ensure we have independent evidence and we regularly inspect water treatment plants and sewage works. If companies are failing to abide by the law or the terms of their permits we will take action to ensure that they do, up to and including prosecution.
Since 1990, the water industry has invested almost £28bn in environmental improvement work, much of it to improve water quality. I agree that there are still too many serious pollution incidents and we have called for tougher penalties for water companies where they are shown to be at fault.
In the past three years we have brought 31 prosecutions against water companies, resulting in more than £30m in fines, and we will continue, alongside the other water regulators, to act to ensure that people, wildlife and the environment are protected.
The agencies quoted are unconvinced and the FT asked earlier this month: Can England’s water companies clean up its dirty rivers?
It noted that the concerns over river pollution come at a time when the water industry is under fire for paying executives and shareholders lucrative rewards while raising customer bills and failing to stem leakage and ended: “The failures mean that three decades after the regional state-run monopolies were handed to private companies free of debt, and with a £1.5bn grant to invest in environmental improvements, the Labour party is calling for renationalisation of the water companies that are now saddled with debt of £51bn”.
Since this article was written, Southern Water — supplier to Kent, Hampshire, Isle of Wight and Sussex — has been required to pay what amounts to a £126m penalty over five years for letting untreated waste leak into rivers between 2010 and 2017, and trying to hide what happened.
Corbyn smears escalate
Yesterday came a warning: “With a general election possibly afoot, we must all be alert to the orchestrated dirty tricks and the ferocity of the propaganda assault that will inevitably be launched against Jeremy Corbyn and Labour by the terrified establishment”. It was issued by Richard House, after replying to ‘absurd views’ in the Independent alleging that Jeremy Corbyn would usher in ‘a communist government’ of a brutal nature.
Articles in the Murdoch Times today bore these headlines
- MPs launch angry revolt over leaders’ Brexit talks: Breakthrough hopes fade after May meets Corbyn
- Brexit talks: Dark clouds gather as Theresa May and Jeremy Corbyn work out what to do next
- The PM, as we must still call her, was numb — perhaps past caring
- Two-party cartel would regret an election now: The electorate is more volatile than ever and many will be looking for a home beyond the Conservatives and Labour.
Jeremy Corbyn’s popularity with Europe’s socialist leaders was highlighted some time ago with a standing ovation noted in the Financial Times:
“UK Labour leader Jeremy Corbyn was given a rapturous reception by his Socialist allies in Brussels on Thursday, as he warned that leaving the EU without a Brexit deal would be “catastrophic” for the UK economy. Mr Corbyn was met with a standing ovation by Europe’s centre-left parties as he addressed delegates at the Europe Together conference, just hours before prime minister Theresa May was scheduled to meet her EU counterparts at a European leaders’ summit”. We omit the description of Ms May’s very cool reception.
Corbyn’s negotiating skills are appreciated by senior EU figures, including Michel Barnier.
EU Brexit negotiator Michel Barnier (R) and British Labour Party leader Jeremy Corbyn walk prior to a meeting on July 13, 2017 in Brussels.
Another perspective: Jeremy Corbyn is a mainstream [Scandinavian] social democrat
“From his style to his policies Mr Corbyn would, in Norway, be an unremarkably mainstream, run-of-the-mill social-democrat. His policy-platform places him squarely in the Norwegian Labour Party from which the last leader is such a widely respected establishment figure that upon resignation he became the current Secretary-General of NATO.
“Yet, here in the United Kingdom a politician who makes similar policy-proposals, indeed those that form the very bedrock of the Nordic-model, is brandished as an extremist of the hard-left and a danger to society”.
British media’s portrayal of Corbyn, and by extent his policies are somewhat exaggerated and verging on the realm of character assassination rather than objective analysis and journalism.
Mr Corbyn’s policy-platform, particularly in regard to his domestic policies are largely identical with the Norwegian Labour Party manifesto. They enjoy near universal support among the Norwegian electorate and, in fact, they are so mainstream that not even the most right-wing of Norwegian political parties would challenge them. They include:
- railway nationalisation,
- partial or full state ownership of key companies or sectors,
- universal healthcare provisions,
- state-funded house-building,
- no tuition fee education,
- education grants and loans
Jonas (right) adds that such policies have been integral to the social-democratic post-war consensus in all the Nordic countries, which. enjoy some of the world’s highest living standards and presumably should be a model to be emulated rather than avoided, and continues:
The whole controversy surrounding Mr Corbyn probably betrays more about Britain’s class divisions and how far the UK’s political spectrum has shifted to the right since the early-1980s, than it does of the practicality of his policy-proposals.
Reflecting this is British media whose ownership is highly concentrated: 70% of national newspapers are owned by just three companies and a third are owned by Rupert Murdoch’s News UK . . . the British media has focused its reporting on the personal characteristics of Mr Corbyn, usually in rather unflattering terms, and shown scant or shallow regard to his policy-agenda.
He notes that a direct comparison of Britain with other similar European states would reveal both the dire condition of British living-standards for populations, particularly outside London and how conventionally social-democratic are Mr Corbyn’s policies.
Jonas Fossli Gjersø ends: “You might agree or disagree with his political position, but it is still far too early to discount Mr Corbyn’s potential success at the next general election – particularly if he manages to mobilise support from the circa 40% of the electorate who regularly fail to cast their ballot in elections…
“(J)ust as few recognised the socio-economic and ideological structural changes which converged to underpin Margaret Thatcher’s meteoric rise in the early-1980s, we cannot exclude the possibility that we are witnessing the social-democratic mirror image of that process today, with a prevailing wind from the left rather than the right”.
Keep Our NHS Public Birmingham (KONP) says, “It looks like we’ve won our campaign for a publicly-funded (non-PFI) Midland Metropolitan Hospital in Smethwick/West Birmingham!”
The construction of the Midland Metropolitan Hospital in Smethwick collapsed after Carillion crashed spectacularly in Jan 2018 leaving the hospital half built. Then the bankers behind the ‘private finance initiative’ pulled the plug on the deal.
KONP Birmingham immediately organised a protest outside the hospital site demanding that the Treasury, health ministers and the Government should fully fund the hospital and run it properly under government and NHS control! Supporters included Birmingham TUC (BTUC), Unite the Union West Midlands, Unite the Community Birmingham, West Midlands Pensioners Convention and Birmingham Against the Cuts.
A month later, the Sandwell and West Birmingham Hospitals Trust Board voted to tell the Government that the only viable option for the completion was direct government funding, a full vindication of the KONP Birmingham campaign argument.
The Government and Hospital Trust has now reached an agreement to finish construction work with the Government providing funding for the remainder of the building work at Midland Metropolitan Hospital – which will see the new hospital built by 2022.
Birmingham Against The Cuts (BATC) says: “We believe that the Midland Met fiasco is a final nail in the coffin of successive governments’ love affair with PFI /2”
BATC gives a very cautious welcome for a publicly funded Midland Met Hospital in Smethwick/West B’ham (no PFI!) and expresses its continuing concerns:
Firstly, there is a delay in starting completion until early summer 2019, partly because the half built hospital was rotting away without any protection for 6 months and an additional £20m worth of work will have to be done from this September.
Additionally, the Hospital’s Trust Board Chief Executive has been dropping in phrases to his announcements such as “making cost improvement programmes above national norms”, “limited reconfigurations”, etc, which reflect the concern in Dr John Lister’s 2016 review (right) of the privately financed hospital published by KONPB and BTUC when the Midland Met was first mooted.
On 1 April 2018 the government will introduce the first Accountable Care Organisations (ACOs), which are to act as partnership bodies incorporating hospitals, community services and councils into the NHS in England.
The Health Service Journal reports that ACOs organisation, a corporate joint venture with GPs, will bring together most of a local area’s NHS services under a single budget, run directly by one big organisation – the ACO. which are to act as partnership bodies incorporating hospitals, community services and councils
Government intends to pass laws allowing ACOs to be set up (see above) without an automatic vote in Parliament.
A BBC website reports that campaigners has been given permission to challenge a government health policy in the High Court. They will pursue a judicial review against Health Secretary Jeremy Hunt and NHS England over plans to create ACOs. Campaigners say it risks privatisation, but this is denied by ministers. The group bringing the case to court says an act of Parliament would be needed for the changes.
The DHSS said the claims would be resisted and it is irresponsible scaremongering to say ACOs were supporting privatisation. A spokesman said: “The NHS will remain a taxpayer-funded system free at the point of use; ACOs are simply about making care more joined-up between different health and care organisations. “Our consultation on changes to support ACOs is entirely appropriate and lawful”.
Dr Kailash Chand, an honorary Vice President of the British Medical Association, claimed ACOs could be a “Trojan horse for privatisation” adding:
“At worst, they are the end game for the NHS.”
The British Medical Association union warned: “Combining multiple services into one contract risks the potential for non-NHS providers taking over the provision of care for entire health economies.”
And the Commons Health Committee chair Dr Sarah Wollaston (Conservative) said: “There is a great deal of anxiety out there that this is going to be a mechanism for privatising the NHS.”
As more people are pressured to operate online in order to increase corporate profits we report:
Gloucestershire reader’s verdict on grappling with online National Express Coach booking: appalling!. Her experience:
- Website refuses to accept three destinations listed on their map: Preston, Charnock Richard and Chorley.
- Phoneline kept her waiting for 15 minutes (so busy) and then cut her off.
- Local Post Office attempted a booking. Destination accepted but
- would not accept any proposed departure time.
- Customer decided to travel by train – involving three changes and at three times the cost.
If only . . .
Time for change?