Saturday, 19 February 2011

Are the Lib Dems about to put a brake on public service outsourcing plans?

As the government's White Paper on public service reform looms, an (unusually high) level of resistance appears to be stirring from amongst the ranks of the Liberal Democrats.

The Green Paper on Public Service Commissioning, published last year, outlined how the government will open up whole swathes of the public service to 'mutuals, co-operatives, charities and social enterprises'. Crucially, it also included this caveat:

"The Government recognises that that many mutuals and co-operatives are profit-making businesses, which operate for primarily commercial objectives. However, they are included in this definition owing to their role in public service provision".

Large private companies will, of course, have the resources and influence to dominate proceedings from here on in. In effect, this opens up core public services to privatisation.

The government's arguments for this are twofold. First, that it will represent a power shift from the government to the people. Second, that it will improve efficiency.

This first argument is heavily flawed. Our current democratic processes may have its detractors, but, as many opposed to the government's NHS reforms have argued, how does allowing unelected special interest groups, or US-based corporations to control service increase democratic accountability? How is it more empowering to service users? Ask a room full of people whether they believe privately-run railway services have improved accountability or the influence of users and you won't find many hands raised. It is precisely these concerns that prompted the head of the civil service to launch an inquiry into these reforms.

The second argument is potentially even more misleading. A fragmented service, or one operating on market principles, can cause back-room bureaucracy, so regularly attacked by the political right to balloon... as the experience of the market-led US model of health care illustrates.

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