The ‘Hidden’ Curse of Privatisation

There have been two blogs already written which lay it on the line, what is happening out there.

These are The Green Benches and retiredandangry.  Both of them, in their own way, point out how large private companies have donated relatively modest (for them, not for us) amounts of money to to political parties or think tanks and miraculously some months or years later the companies and their shareholders benefit from windfall payments as the companies in question pick up £billion contracts which some may say are as a direct result of their ‘investment’.

Dr Éoin Clarke’s excellent blog, the Green Benches, outlines step-by-step so I don’t think that I need to replicate this here.  What is important is that you don’t think that this is a one-off, isolated incident.  We all have a view on G4S by now, and it’s probably not a very positive one.

Just so that you don’t think we’re fixated on the Police Service, I’ll move on to Care UK.

Until mid 2010 the Chairman of Care UK, one of the leading private healthcare providers in the UK , was John Nash, a British businessman with a background in private equity.  Caroline Nash, John’s wife, trained as a stockbroker before working in international merchant banking.

John Nash was appointed by George Osborne to sit on the Independent Challenge Group, who advised the government on their spending review, and also recommended, in a leaked report, that the NHS find further efficiency savings of £10bn

He also sits on the board of the Centre for Policy Studies, a think-tank which aims to promote limiting the state and encouraging enterprise, and supports policies of privatisation and low taxes  This is the second think tank that John Nash is involved with, as he is seemingly involved with Policy Exchange as well.

Caroline has made the most significant donations, giving £172,500 to the Conservative Party between 2008 and 2010.  She has also made donations to Conservative MPs David Laurie Ruffley and Nick Herbert

John has donated £10,000 to the Conservatives and £40,000 to the No2AV campaign.  He also made a £21,000 donation to Andrew Lansley in the run up to the 2010 General Election.  That will be the Andrew Lansley that went on to become Health Secretary then.

The pair each donated £3,750 to Conservative candidate Philippa Stroud on the same date in October 2009.  I believe that she was unsuccessful in her campaign but is head of the Centre for Social Justice, the thinktank set up by the former Tory leader Iain Duncan Smith, has heavily influenced David Cameron’s beliefs on subjects such as the family.  Yes, another think tank with connections to the Tories.

Private healthcare firm Care UK stands to profit from the Health and Social Care Act, which became law in April 2012 and will allow for greater private sector involvement.

The original Bill was first proposed in early 2011 by Health Secretary Andrew Lansley, who received a £21,000 donation from John Nash just over a year prior, whilst he was still Chairman of Care UK

Care UK was also awarded a £53m contract in January 2011 to provide health care services to prisons in the North-East

According to a report by Corporate Watch, Care UK is reducing how much tax it should pay by taking out loans through the tax haven of the Channel Islands

I also found this headline from August 2010 “Care UK’s former chairman joins Osborne spending panel”  George Osborne has recruited four City figures to join a “red team” of experts to puncture the Treasury consensus on the spending review, as he seeks inspiration for cuts that are causing mounting friction in Whitehall……

The four are Adrian Beecroft, one of the founders of Apax Partners, the private equity group; Douglas Flint, finance director of HSBC; Richard Sharp, the former head of the Goldman Sachs European private equity arm; and John Nash, a founder of the Sovereign Capital buy-out group and  chairman of Care UK, the nursing home group.

Mr Beecroft, Mr Sharp and Mr Nash are Tory donors, and some of them have been on good terms with Mr Osborne for some time.

Does this smack of ‘Jobs For The Boys’?  One commentator had this to say “It doesn’t surprise me that Osborne has plucked his advisers from the City, but I am worried that the former chairman of Care UK is one of his favoured few. Mind you, having observed the fortunes of Care UK over the past couple of years, if it is ideas for cuts that Osborne wants, Nash is brimming with them.”

Care UK’s website does not make it easy to establish who the board of directors may be, presumably they don’t want us to know that,  However, I eventually found that info here.

The website proudly proclaims “We are one of the UK’s leading independent providers of health and social care services”  and “We offer a range of services through our GP surgeries, hospitals, treatment centres and diagnostics facilities.”

I certainly can’t demonstrate that all of the correct procedures weren’t followed but if you look at this, look at the G4S scenario, look at Policy Exchange (other think tanks are available, and probably operate in the same manner) then you may be left with the same impression as me.  It stinks of Chumocracy and Thinktankocracy.

I always believed that the government were meant to represent the views of the public, not some non-elected think tank or a company who has paid a think to produce some recommendations for them.

What do you think?

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