ld words of 2003
Is Allyson Pollock’s prophecy coming true?
Ian Fraser, author of the following words, seems to think so.
He tweeted: “Increasingly obvious @AllysonPollock was right about PFI/PPP. Even RBS chair Howard Davies admits it’s a fraud. Here’s my interview with her from 2003.”
Of course, Carillion – the engineering firm with no less than 450 government contracts, that went into liquidation last week – is a beneficiary of PFI – that’s what makes these words topical now.
From the Sunday Herald, December 19, 2004:
Widespread use of the private finance initiative (PFI) to fund public sector projects is eroding government accountability and means the UK will lose its status as a first world economy, according to a leading academic.
Allyson Pollock, professor of public health at University College London, believes the funding method leads to the back-door privatisation of state-run services and spells a return to a patchy provision of health and education.
Pollock, due to speak on PFI to the cross-party group on the Scottish economy at the Holyrood parliament this Tuesday, told the Sunday Herald: “As the economy starts to slide, the government and communities will find it increasingly difficult to the pay costs associated with PFI.
“I fear that decay will set in and Britain will struggle to remain a mature economy if private sector asset stripping of public services continues. There is plenty of talk of risk being transferred to the private sector, but when things go wrong the public sector invariably ends up bailing out the private sector.
“The idea that PFI is a partnership between government and business looks a hollow joke, as private finance gets repaid while the public sector carries the extra cost of keeping services going and communities suffer, ” she said.
Posted by jeffrey davies on 20 January 2018
Carillion
Carillion’s collapse has made front-page news across the print media. But not in The Evening Standard, which former chancellor George Osborne edits. Well, not for long, anyway.
While the evening paper put Carillion on the front page of its first edition on 15 January, it quickly replaced it with a second edition scaremongering about the election of three new Momentum candidates to Labour’s National Executive Committee (NEC):
Evening Standard 2nd edition
So why might The Evening Standard choose a story about internal Labour Party processes over the collapse of the UK’s second largest construction company?
ADVERTISING
Carillion employs 43,000 people. It has debts of around £1.5bn. And the Conservative government awarded it nearly £2bn of contracts after it issued its first profit warning. All deeply newsworthy.
Well, not only did the The Standard‘s editor, George Osborne, support Carillion’s takeover of Britain’s public services during his time as chancellor; he also earns £650,000 a year from a company that profited from Carillion’s collapse.
Osborne and Carillion
Between 2010 and 2015, Osborne oversaw a doubling in outsourced public contracts. In 2010, there were 526 outsourcing contracts, worth £56bn. After Osborne had been chancellor for five years, there were 1,185, worth £120bn.
In October 2014, Osborne enthusiastically announced a new deal with Carillion, which he said was a key part of Britain’s “long-term economic plan”:
Meanwhile, his brutal austerity agenda led to a chronic underfunding of services. Companies like Carillion overbid for contracts that turned out to be unprofitable – while “fat cat” bosses creamed off any money.
Then, in 2017, Osborne took an advisory job with the BlackRock Investment Institute, for which he earns £650,000 a year. As Political Scrapbook notes, at the time he registered his interests in 2017, he also expected to receive equity in the company:
Now it has emerged that BlackRock, the world’s largest fund manager, is thought to have made £40m profit by gambling that Carillion would collapse.
Taking responsibility
Corbyn has placed the blame for the crisis firmly at the Conservatives’ door, saying:
Tory underfunding has caused the crisis. But privatisation, outsourced contracts and profiteering have made it worse. Our public services… are struggling after years of austerity and private contractors siphoning off profits from the public purse.
Yet George Osborne, in his role as Evening Standard editor, chose to attack the Labour leader on his paper’s front page on the day Carillion collapsed. He did, to be fair, also put out an editorial. But the Carillion story didn’t even lead that. And instead of taking responsibility for the mess, Osborne used the editorial to deflect blame onto civil servants rather than ministers, and then had the gall to ask:
Why has the state found itself so dependent on a few very large outsourcing firms?
A different way
ITV‘s Robert Peston has called the collapse of Carillion “the definitive end of Tory and New Labour governments 25-year love affair with private provision of public services”. Let’s hope he’s right. For decades now, successive governments have handed profits from government contracts over to private interests while socialising the losses, allowing a few people to get rich at the expense of the many.
But there is another way. We could share the proceeds of our society with each other. We could – and we must – take back control.
Posted by jeffrey davies on 17 January 2018
the more I find out the more I'm dreading that day
The SKWAWKBOX reported this week on the shocking tripling of deaths – from 83 in 2011 to 252 in 2016 – among people detained under the Mental Health Act, as mental health and police services have been degraded under Tory government.
A further shocking phenomenon is revealed by the government’s Coroners’ Statistics: an increase of fifty-six percent in the number of deaths under ‘Deprivation of Liberty’ (DoL) authorisations.
The Mental Capacity Act (MCA) allows for organisations – hospitals, care homes and others – to apply for authorisation to deprive or restrict a person’s liberty on the grounds of their mental capacity if it is considered necessary for their safety. ‘Deprivation of Liberty Safeguards‘ (DoLS) exist to ensure – in theory – that a person is not unnecessarily deprived of any more of their liberty than is absolutely necessary for their safety. These only apply in England and Wales.
One of the key reasons for a DoL is dementia in its various forms. If a person can’t remember where they live, for example, a home would need to prevent them from leaving the facility unaccompanied or might need to restrict their access to the kitchen if they may forget to turn off an appliance.
DoL authorisations are also linked to the resources of the organisation applying for them. As a simple example, facility with enough people to provide one-to-one care around the clock would have less need to deprive an individual of liberty than one in which a staff member is looking after twenty residents or patients.
In 2015, the first year in which the figures were recorded, 7,183 people died while under DoL authorisations. In 2016, that number soared to 11,376.
In a small part, this is explained by an increase in the number of applications for DoL. But this only rose by 11%.
Another contributing factor will be the increasing total number of people deprived of their liberty. DoL should last only as long as required, but a person with dementia may be under an order for years.
In previous years – when DoL deaths were not reported – the number of applications has rocketed, for example a 900% increase in 2014/15. In the very early years after DoLS were launched in 2009, this might be attributed to increased awareness of the process – but five years later?
The inverse link between resources and the need for DoL applications would suggest that the annual increase in DoL applications is linked to starvation of resources among the organisations providing care.
The huge increase in deaths suggests that even DoL orders may be failing to safeguard vulnerable people. Of course, statistically some people will die in any group in any year.
But the steep rise in the both total and in the deaths per thousand people detained that the statistics reveal likely reflect the ongoing under-resourcing of social care, the continuing collapse of the NHS as funding slows – and the inability of organisations to cope on ever-tighter resources, even when using more and more often the extreme measure of depriving those in their care of liberty in at attempt to keep them safe.
die die die end of revenue
Posted by jeffrey davies [82.9.81.48] on 14 January 2018
reply | edit & publish | delete
going private
how we get robbed not once but twice Isn’t that a contradiction in terms?
Back in the 1980s, Margaret Thatcher sold us a pup. She told us private companies could run public services more cost-effectively than government. Either she was badly mistaken or she was lying.
Most voters believed her, though, and in the decades that followed, she and her successors have sold off as many public utilities and services as they could, hiring private contractors in to run crucial aspects of most of the others.
The Carillion case is indicative of what happens next.
The outsourcing company, which has maintenance contracts in the NHS, a contract for work on the HS2 rail link, contracts with the Ministry of Defence, and is a major supplier of rail infrastructure, is in serious financial trouble.
Its major lenders – banks including Lloyds and RBS – have rejected the company’s rescue plan and are urging the government to pay off its debts – using public money.
So these banks – who were themselves bailed out with public money when they caused the financial crisis that led to the Great Recession 10 years ago – are now saying they need the public to bail out this private company, because they won’t.
It is the most damning evidence possible that privatisation of public services is a failure.
The idea of privatisation was that the public wouldn’t have to pay for services. Instead, it seems we are being asked to pay time and time again.
We bailed out the banks once; now they want us to bail them out again, repaying their loans to Carillion.
No! Let the company go out of business and take the contracts back in-house.
Oh, but the Tories probably can’t manage that because the state no longer has the wherewithal to carry out that kind of work. Typical Tory short-sightedness.
Another brilliant example of the same stupidity is rail privatisation. Private companies took over rail services in the 1990s, and we were led to believe that this would lead to better services, with profits being ploughed into infrastructure and other improvements. Instead, the public subsidy has skyrocketed and so have fares; 70 per cent of our rail companies are owned by foreign concerns (some of them, ironically, nationalised) which means we are subsidising rail services abroad rather than funding improvements here, and those that aren’t seem to be in permanent financial difficulties, meaning more public money is used to bail them out. Look at the Virgin East Coast franchise.
Do you call that value for money? Because I don’t.
It should be no surprise that Chris Grayling is the transport secretary who has admitted Virgin overbid for the East Coast franchise. The company offered to pay too much and that is, we’re told, why it is in financial difficulty now. The same thing happened with the probation service when Mr Grayling was justice secretary. oh dear
Posted by jeffrey davies on 14 January 2018
