I’m a simple chap at heart, don’t like things too complicated, and I definitely don’t understand the finer points of Economics, but I do know how to economise. Sometimes I ask myself “What’s the big deal with privatisation? Is it such a bad thing?”
This is where the simple side of me starts to get confused. Hypothetically speaking, if the Police (or the NHS, Schools, Coastguard etc) provide a given, identifiable service it costs the country £xxxxxx to provide that service. Now I’m not pretending that any public service is run to 100% efficiency, but then neither are the private companies, believe me.
So when the government decide that one or more of these services will be privatised it is still going to cost a finite amount of money to provide that service, the only difference being that instead of the government coughing up the money to provide it, it is provided and paid for by said private company, who will then, presumably, be paid from our Council Tax.
Make no mistake, private companies exist for one reason and one reason only, to make a profit and feed their shareholders. It really is as simple as that. So for them to provide said service at a lower cost there has to be a cutting back somewhere, there is an absolute minimum that anything can cost, and bearing in mind that Police, NHS etc are not world-famous for the large salaries they pay their front-line staff. The biggest costs for most large organisations are salaries and pensions, therefore in order to reduce costs and make a nice, fat profit for their shareholders the obvious starting point for profit-making is employ less staff, pay them less and change their pensions.
This all sounds pretty obvious, I know, and I’m not really trying to teach granny to suck eggs, there is another point and I’m slowly getting there.
With all of the public services that we have, without exception, they are reliable, they are like a rock, they’re not going anywhere, they can be depended on to perform their functions day in, day out. It’s what they do, and it’s what their loyal, dedicated staff are about. Yes, there will be the occasional strike, or the threat of one, but basically they will always be there. Most public sector staff that I know are fiercely proud and loyal, it is why they do the job they have chosen, not for the pay and conditions that’s for sure.
The bottom line is that the organisations that are the Police, NHS, Coastguard etc are NEVER going to say “We’re not going to do this any more, we’ve had enough. We’re not making enough profit so we’re closing down” Private companies can say this, they will say this and THEY HAVE SAID THIS. If you recall the Cheshire experience, long before the initial 10 year contract had run it’s course concerns were being raised about the performance of the outsource contractor and their ability to deliver the contracted services. That contract was terminated by mutual agreement because the contractor could not deliver.
This, I respectfully suggest, is where the real risk lies. The only people to actually save any money in all of this is the government. The ‘Risk’ is passed on to a private company, but the real risk is borne, surely, by the public. The risk that this arrangement will not work and will collapse or at the very least have a planned withdrawal by the company concerned.
There is an old saying “Better the Devil You Know etc etc”, and surely this is true. I am in favour of making savings. I have never approved of wastage and extravagance. Public services can, and must, look at themselves and identify areas where precious money can be saved, but there is more at risk than just cost-cutting and a shareholder’s profit.
You may think that I keep banging on about Cheshire, but there is a prime example of how privatisation can fail, it will fail and it DID fail. Custody services had to be taken back in house and the three private Custody Centres bought by the Police Authority in a totally unexpected expenditure.
I have deliberately not named any companies in this blog, you know who they are. As far as I’m concerned it matters not one jot which company gets involved, the risks are the same.
So this simpleton’s plea is “Please stop the lunacy that is privatisation before it is too late”