The Continued Failure of Privatisation and ‘Outsourcing’

The Olympics G4S security debacle has further increased public opposition to privatisation. But for G4S at present, its failure to deliver on its contract will merely dent the massive profits of this large multinational. It has more business outside the UK than inside and has other contracts with the UK government that will go on.

Last year it received £759 million from the Con-Dem government for contracts that included electronic tagging of criminals and processing some benefits claims. The government is about to introduce security licenses that will hand even more work to large firms like G4S by pricing out in-house security provision.

History of failure

G4S has failed repeatedly before, for instance it once ‘lost’ seven prisoners when transporting them, but this didn’t stop both Labour and Tory governments giving it more lucrative business.

Deportations were contracted to the firm Reliance by the government after G4S inflicted serious injuries when it had the contract previously, with a death occuring in one case. Now there are reports of brutality by Reliance guards, indicating that another scandal is emerging.

Casting an eye down the long list of privatisations and outsourcings that have taken place over years shows a corresponding long catalogue of failures and deficiencies. Yet the drive goes on.

Lloyds and RBS banks are being prepared for full return to the private sector despite the Barclays Libor scandal and HSBC’s seeming aid to money laundering, not to mention the withholding of credit from small businesses and mortgage seekers by all the major banks.

The police are being urged to privatise some functions, military procurement is being outsourced, wholesale privatisation of the NHS proceeds apace, parts of education, parts of the civil service – where is privatisation not being pushed? Often workers face worse pay and conditions when employed by the private companies, as the bosses engage in a ‘race to the bottom’ to minimise costs and maximise profits.

These profiteers enrich themselves, pouncing on buildings, equipment and training that have previously been paid for by the public sector. Then instead of investing their profits in industry – which they don’t view as profitable enough – huge amounts of money are left idle. For example, hot on the heels of the G4S debacle came news in last Sunday’s Observer that a global mega-rich elite has hived away £13 trillion into tax havens!

War on the public sector

The multi-millionaire Tory leaders in the cabinet vehemently detest the public sector and want to privatise and outsource as much as they can, to hand rich pickings to their big business friends and for themselves when they eventually leave the House of Commons. They also want to drastically reduce the size of the public sector in a crazy, counter-productive drive to lower the national debt, and to be able to reduce the taxes the rich should be paying to help fund public services for everyone.

So they or their media allies ferociously attack the public sector as being inefficient and expensive, and public sector workers as being lazy, privileged and greedy. These are nothing but lies and distortions.

Time and time again, privatised services have been shown to cost more than publicly run services for the same standard of delivery, from the rail system to the building of new hospitals and schools. Sometimes the difference is shockingly great. Shareholders and directors use the security of public sector contracts to rake in vast profits, which they use to line their own pockets.

Accusations of laziness and greed aimed at public sector workers are monstrous slurs, especially considering that cuts have forced whole sections of the public sector workforce to work to the point of complete exhaustion.

What about efficiency? Unfortunately top managers in the public sector have often been trained in the same dictatorial management methods as those used in the private sector and they are not necessarily less prone to incompetence. Despite this, public bodies, being under closer scrutiny by elected councillors or MPs, and having the central aim of service provision rather than profit making, tend to be found by service users to be more ‘efficient’ than private bodies.

Democratic control

Public control through elected representatives is one of the crucial advantages of public sector organisations.

The other vital superiority of public sector organisations is that with no exodus of money into the pockets of shareholders, as well as the sole aim being to provide the best possible service, there will also be more money available for that service provision. This is obviously preferable for the vast majority of people in society.

The only people who don’t stand to gain are those in the super-rich elite at the top, who will continue to orchestrate the savaging of the public sector until an almighty response from the trade union movement is built to stop them in their tracks. The Olympics G4S debacle has further increased public opposition to privatisation.

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