The decimation of our public services.....

[Hocus Eye.]

The majority of the waste of money is in PFI.

It is the privatisation of the public sector so that the capital expenditure on new buildings like hospitals and schools appears to come by magic out of the private sector. It isn't magic, they get to take over the land of the old hospitals and asset strip it. Then the running of privately owned buildings and services also has to be funded out of the public sector at increasing higher rates. This is the so called 'increased expenditure' on health and education. It is creative accounting and it is itself effectively a kind of fraud - but it is legal.

Once you get private sector companies providing what were public services the whole work ethos changes. The employees are not in the job out of caring for people. It is just a job and they do it for the money. At base that is true for everyone really but there was a public sector ethos years ago.

Talking to a couple of men who are hospital porters in hospitals in different parts of the country is revealing. The one who worked in my local hospital was complaining that the work was outsourced to a private company and there had been immediate staff cuts. He earns the same money as before but has more work to do. He says that he used to take a bit of trouble over individuals who needed transporting around the hospital perhaps in a wheelchair. Now he has a two way radio and has to report in when he picks someone or something up and again when he gets to his destination so that he can be given another job. He is on the run all day.

The other one works in a hospital in the West Country. The portering has not been outsourced yet. However he complained that his wage increase for the year is not happening because there is not enough money in the budget. That is a nil increase. He is steaming mad and it all came out when I casually asked him about work. He is in Unison but says that there is no will above grass roots level for a fight.

The public sector is in a real mess. It has been deliberate policy by both political parties to allow this decay because it gives them an excuse to privatise it all. They think this will save money. They also know that it will disengage them from any responsibility for failure in these areas. They can blame the contractors.

There is no saving of money in privatisation because in the end the private companies are paid by the taxpayer. These companies are effectively 'on welfare'.

 

[Zeppo]

Gordon Brown (when Chancellor) announces 104,000 job cuts in the civil service, 25,000 in the HMRC (where the 25m data getting lost happens) cuts in the DWP - where thousands of telephone queries are not taken up.

Civil servants are not top of the popularity league but these cuts to public services are having a negative effect.

Meanwhile the Government spends over £7 billion on consultants. Plus shock horror they get the police backs up by attacking their pay.

Millions of public sector workers receive year on year below inflation pay deals i.e. pay cuts.

Why wait until the next election - this Government is dismantling public services bringing in privatisation, PFI etc.. The French workers are doing the right thing.

 

[ViolentPanda]

The majority of the waste of money is in PFI.

It is the privatisation of the public sector so that the capital expenditure on new buildings like hospitals and schools appears to come by magic out of the private sector. It isn't magic, they get to take over the land of the old hospitals and asset strip it. Then the running of privately owned buildings and services also has to be funded out of the public sector at increasing higher rates. This is the so called 'increased expenditure' on health and education. It is creative accounting and it is itself effectively a kind of fraud - but it is legal.

Once you get private sector companies providing what were public services the whole work ethos changes. The employees are not in the job out of caring for people. It is just a job and they do it for the money. At base that is true for everyone really but there was a public sector ethos years ago.

Talking to a couple of men who are hospital porters in hospitals in different parts of the country is revealing. The one who worked in my local hospital was complaining that the work was outsourced to a private company and there had been immediate staff cuts. He earns the same money as before but has more work to do. He says that he used to take a bit of trouble over individuals who needed transporting around the hospital perhaps in a wheelchair. Now he has a two way radio and has to report in when he picks someone or something up and again when he gets to his destination so that he can be given another job. He is on the run all day.

The other one works in a hospital in the West Country. The portering has not been outsourced yet. However he complained that his wage increase for the year is not happening because there is not enough money in the budget. That is a nil increase. He is steaming mad and it all came out when I casually asked him about work. He is in Unison but says that there is no will above grass roots level for a fight.

The public sector is in a real mess. It has been deliberate policy by both political parties to allow this decay because it gives them an excuse to privatise it all. They think this will save money. They also know that it will disengage them from any responsibility for failure in these areas. They can blame the contractors.

There is no saving of money in privatisation because in the end the private companies are paid by the taxpayer. These companies are effectively 'on welfare'.

Hence my point about PFI bringing in the precepts of the MAI (which was roundly rebuffed by a majority of WTO members) through the back door. To put it simply, our government has rolled over and crammed an over-sized welfare tit tattooed "public services" into the mouth of the City of London, exactly as parts of the Multi-lateral Agreement on Investment required all good (i.e. capitalism-friendly) nation-states to do. The developing world were bright enough to see what a clusterfuck this would cause, especially given the experiences some developing nation-states had with SAPs, but we, with our supposedly superior economic nous, swallowed it hook, line and sinker.
Thanks tories, thanks new Labour. You've sold our inheritance for a mess of pottage, you cunts.

 

[Prince Rhyus]

Ask to see the impact assessments that all organisations should be doing prior to the contracting out or privatisation of anything. They need to show that the "new improved" services will really be what they say they will be - ooh, and see if they will commit to a post-rollout impact assessment to see if the new service is really delivering what it says it is.

 

[agricola]

Thanks tories, thanks new Labour. You've sold our inheritance for a mess of pottage, you cunts.

This is probably why the City is so vehemently against Northern Rock being nationalized - when it works, no doubt the clamour to do the same with PFI where it fails (which, lets face it, is almost everywhere) will be overwhelming.

Ask to see the impact assessments that all organisations should be doing prior to the contracting out or privatisation of anything. They need to show that the "new improved" services will really be what they say they will be - ooh, and see if they will commit to a post-rollout impact assessment to see if the new service is really delivering what it says it is.

Not that I am or have ever voted Lib Dem, but this is what Cable and some others have been demanding throughout for PFI. Personally, if a private company can come in and provide a better, cheaper service then IMHO there is nothing ideologically wrong with that... the problem is, as we all know, that very few of them (if any) actually do this.

 

[treelover]

Is this the case, what on earth are Dunlop, a rubber company doing running such services? its fantastical cases like that which really indicate how much of an ideological time we are living in.


Oh, and I do think just like the Miners Strike this is also about weakening organised labour: remember there are are plenty of ex trots, commies in the Govt who know that the P/S unions are a key part of any resistance to their regime, well, bits of them are.


God, its depressing.....

I mean how can Dunlop be running the homeless person's unit at Westminster?

 

[Dan U]

If you've got the proof then use it.

I don't disagree with you - I think your characterisation of in-house work not indulging in the occassional bit of over-costing or embezzlement is disingenuos because it still happens - I think there is an appalling amount of waste in the case of both forms, private 'partnership' and in house. What's needed is a change in the culture of work when it comes to stuff like this...as well as aggressive reporting of fraud, substandard work etc.

I've just done a financial review of the London borough i work for's contract with it's Housing Maintenance Company.

it's all above board, they aren't defrauding the council.

The problem is that it was negotiated by amateurs with a very sharp private sector organisation. The company are making no money that is not within the contract, the problem being that the contract is a joke and they are making way above market rate returns, but entirely within the contracts terms and conditions.

sadly the people in the council who did this deal are still there so they will ignore my advice. It's up for renewal soon and i really hope they don't do the same deal again

Cockney Rebel - if what you say is true then a well asked Freedom of Information request can do wonders. Ask about when the last audits were done on the accounts and the job allocation system of this company by the council. When costs were last benchmarked regionally etc.

Sadly, ime, those kind of challenges rarely come within a council. We have a PFI contract at our council that no one in the whole place understands yet the main scrutiny from the Councillor responsible for Finance has been to ask how much money everyone spends on water for meetings.

jesus

it is my opinion that externalising some services can work and it can bring financial benefits to taxpayers - in the example of housing we have screwed our maintenance company down by a few million quid, which will all be reinvested in repairs, new kitchens etc on the housing stock . but it must, absolutely must, be have contract management being carried out for the benefit of the taxpayer by competent people. And from what i can see that just isn't happening - until they get some wanker like me in on a contract from the private sector to do it

In the case of PFI an honest financial evaluation of the options should be carried out. The treasury allows far far to many tweaks to the models in favour of PFI. Baseless 'efficiency' savings with no supporting evidence, tweaking of the paybacks, IRR's etc. it's a loaded question.

 

[FridgeMagnet]

The problem is that it was negotiated by amateurs with a very sharp private sector organisation. The company are making no money that is not within the contract, the problem being that the contract is a joke and they are making way above market rate returns, but entirely within the contracts terms and conditions.

That sounds rather familiar. These firms are good at what they do, given that getting contracts at hugely favourable rates _is_ what they do. The "provide a service" thing is pretty much an afterthought; in many cases they then just subcontract it out for a fraction of the price.

 

[Dan U]

That sounds rather familiar. These firms are good at what they do, given that getting contracts at hugely favourable rates _is_ what they do. The "provide a service" thing is pretty much an afterthought; in many cases they then just subcontract it out for a fraction of the price.

indeed they are.

the company i refer to was established as a subsidiary of another company solely to bid for public sector work.

one of the recommendations i am in the process of making is on the tightening up of 'subbing' of work. they are contractually allowed to charge a premium on subbed work, so they do so at every opportunity. it is money for old rope and something the council could do themselves for that part of the contract.

it's a minefield though. we have a profit share arrangement with this company (who we are there sole supplier of work!) which is basically a mechanism to remove money from the Housing Revenue Account back in to the General Fund (which can't be done directly, legally, and a few million quid from the HRA in to the GF suits cash strapped councillors nicely)

for every £1 we get back we need to have given them about £3.

it's a nonsense.

 

[Prince Rhyus]

The problem is that it was negotiated by amateurs with a very sharp private sector organisation. The company are making no money that is not within the contract, the problem being that the contract is a joke and they are making way above market rate returns, but entirely within the contracts terms and conditions.

Cockney Rebel - if what you say is true then a well asked Freedom of Information request can do wonders. Ask about when the last audits were done on the accounts and the job allocation system of this company by the council. When costs were last benchmarked regionally etc.

In the case of PFI an honest financial evaluation of the options should be carried out. The treasury allows far far to many tweaks to the models in favour of PFI. Baseless 'efficiency' savings with no supporting evidence, tweaking of the paybacks, IRR's etc. it's a loaded question.

There is a huge underskilling within the public sector - especially at mid to senior levels. Too many of the negotiations between public and private sector are negotiated by people who are simply not up to the job. It's got to the stage where some parts of the public sector employ private firms to do the contract negotiations for them!

The problem is just as much an administrative and human resources one as it is a public/political policy one. Politicians assume that the officials have the skills to deliver, when actually they haven't, and thus need to ensure that they factor in the time it takes to get a specialised procurement team up and running before entering into negotiations.

But hey, I'm just a minion in the system.

 

[Dan U]

The problem is just as much an administrative and human resources one as it is a public/political policy one. Politicians assume that the officials have the skills to deliver, when actually they haven't, and thus need to ensure that they factor in the time it takes to get a specialised procurement team up and running before entering into negotiations.

i'd agree with this.

the PFI contract i mentioned earlier was set up by KPMG or some such organisation stipulated by the treasury (before my time - and the use of such firms is a whole other debate as to just whose side they are on). they then left

the contract management was given to two graduate trainee's earning decent wedge but don't, erm, actually understand the contract!

it's only the single biggest contract the council have. it's quite scary really.

it's not difficult either to recruit some decent people and train up others.

 

[ViolentPanda]

This is probably why the City is so vehemently against Northern Rock being nationalized - when it works, no doubt the clamour to do the same with PFI where it fails (which, lets face it, is almost everywhere) will be overwhelming.

Yep, and the same excuses that have previously been trotted out for bail-outs will be trotted out again, great gusts of guff about not wanting to undermine confidence in "the city".
PFI, in terms of the debts it'll leave hanging on the public purse, whether it succeeds or fails, might as well be the acronym for "Pawned our Financial Independence", same as (at least for the private companies in question) it might as well stand for "Pocket-Filling Initiative".

 

[agricola]

Yep, and the same excuses that have previously been trotted out for bail-outs will be trotted out again, great gusts of guff about not wanting to undermine confidence in "the city".
PFI, in terms of the debts it'll leave hanging on the public purse, whether it succeeds or fails, might as well be the acronym for "Pawned our Financial Independence", same as (at least for the private companies in question) it might as well stand for "Pocket-Filling Initiative".

You are not wrong, and as (according to Private Eye) we are starting to see PFI deals be sold on by the original contact holder, this does need to be stopped as soon as possible, or the situation could get even worse than it currently is.

Not that such a political about-turn is likely, of course - as fond as Brown is of PFI, Cameron is probably the one person in politics more fond than Brown is (witness his Tory Conference speech when he said he wanted to get private firms involved in getting the unemployed back to work). Its sad to say, but it will probably take an economic collapse on a big scale to bring some sanity, and public money, back into the system.

 

[cockneyrebel]

The problem is that it was negotiated by amateurs with a very sharp private sector organisation. The company are making no money that is not within the contract, the problem being that the contract is a joke and they are making way above market rate returns, but entirely within the contracts terms and conditions.

This is true as well. While the companies I've seen do carry out fraud by doing no-existant variation orders the problem above is a very real one as well.

Also companies like KPMG, Price Waterhouse Coopers etc all make an absolute fortune for doing very little and often just using pre-existing templates. The deals they end up setting up are often very poor.

The other problem is that a lot of the time public sectors don't have the time and resources to monitor the work that's done. So the poor workmanship and adding on of non-existant work often slips through the net.

Got a mate who works for the NHS who compared PFI there to mortgaging your house but at the end of the mortgage having to give your house back to the bank. It's gonna shaft the NHS in the long run.

Companies all around the country are currently seeing the privatisation of the public sector as some kind of wild west gold rush.

 

[lewislewis]

The NHS needs fundamental structural reform - returning it to it's 'original ideals' of central decided everything is a load of bollocks. Root and branch reform is what's needed, with public AND private providers used where it's appropriate - for example, I don't think that the hordes of admin staff need to be directly employed by the NHS - so instead of contracting out something 'core', like hospital hygiene, contract out something non-core like reception and secretarial jobs.

Most of the points I had in mind have already been dealt with by other posters, but I wholly disagree with your response that a return to the 'original ideals' would be a load of bollocks.

I'm not a health professional, merely an outside observer, and perhaps there is room for some private providers of 'non-core' services as you suggest- I would only agree to this if they were definitely Unionised and had their pay regulated by the NHS. I'm certainly not convinced.

Where I have a problem with the PFI especially is using the PFI to construct new hospitals. This is tying the NHS into huge debts.

Even at the stage we're at now in the UK with a free market offensive against public services for years and years, it is still viable to fund state provision, including free prescriptions, free operations, and publicly-funded buildings.

There is no financial advantage to using PFI except for the short term. In Wales all private finance in the NHS is being phased out. It is unwanted by health professionals and patients. There have been new community hospitals built using entirely public funds. Our NHS is still crap mind! But it shows that there isn't some kind of financial dependency or necessity on using PFI's to expand the NHS.

The simple fact is that with all this New Labour bollocks about 'record investment in the NHS', the UK still spends less on health than any other western European country. If we're committed to the welfare state we need to build it properly and in tune with the ideas of its creators, ideas which might I dare suggest are worth more than money.

 

[tbaldwin]

Companies all around the country are currently seeing the privatisation of the public sector as some kind of wild west gold rush.

Not suprising is it. Cos public funds are spent in such a slapdash way. People in the Public and Voluntary sector often waste huge amounts of money..Cos its not there money and nobody really holds them to account for wasting huge sums.
From personal experience i know how much over the top some of these people will pay for premises and equipment etc ...To be honest its a bit scarey looking at it...