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Mark Irvine on why some still oppose the private sector ...
Mark Irvine on why some still oppose the private sector
Privatisation is big news again as prime minister Tony Blair wrestles with his promise to reform public services, while the unions flex their muscles in the background.
How times have changed - knife and fork dinners have replaced beer and sandwiches - but Labour leaders still have to sweet talk union bosses, whose every instinct tells them the best approach is a negotiating committee.
In the 1980s Margaret Thatcher's government unleashed market forces on public services for the first time. Privatisation was not the declared aim of government policy, but winning NHS cleaning and catering contracts was like taking candy off a baby. CCT was the name of the game and competition was stacked in favour of the private sector. A Dutch auction resulted, private bidders undercut their public rivals by paying workers less and cutting holidays and other conditions.
Those who lost most were part-time women workers, many of them already in low-paid jobs. Legislation forced councils to tender services, mainly lower paid manual work. School cleaners and school meals workers lost their entitlement to be paid over the school holidays, as council-led bids surrendered hard-won conditions in their desperation to survive. The affair left a bad taste in people's mouths which is why there is such hostility to privatisation to this day.
Soon after the 1992 general election, an almighty spanner was thrown into the works by an obscure piece of employment legislation known as the Transfer of Undertakings (Protection of Employment) Regulations 1981. TUPE was like a lifebelt to a drowning man.
TUPE was Britain's version of the employment protection measures introduced by the European Union. The directive prevented unscrupulous employers from taking over businesses, sacking workers or paying them less for doing exactly the same job.
At the time, Britain decided TUPE would not apply in the public sector. Years later a gang of dustmen from Eastbourne - who lost their jobs to a private contractor - challenged the decision in the courts, and the rest is history.
Public service workers are no longer second-class citizens. Employers cannot take over an organisation and change people's pay and conditions, unless they want to end up in court.
New Labour is neutral about who provides public services. Times have changed. The political consensus says public services should operate inside a well-defined, value-for-money regime. As monopoly suppliers, councils and hospitals do not go out of business for providing poor services because customers cannot go anywhere else.
Labour believes the new system of regulation should be based on market testing, comparing service quality and costs within the public sector and against the private sector. The logic, which no one disputes, is that controlled competition is better than no competition.
So far, so reasonable, but why are the unions up in arms? For two reasons - one good and one bad. First, TUPE is only a partial answer because it only protects workers at the point of transfer. Second, shining a spotlight on performance is always unpopular - awkward questions get asked and people are called to account.
Monopoly suppliers have no incentive to improve performance in the absence of competition or effective regulation. Customer satisfaction surveys are unheard of. Change is often regarded as an enemy rather than a friend, and performance management, upward appraisal, are eyed with great suspicion.
Unions would rather sort these things out quietly, among friends, behind closed doors. The general secretaries who visited Mr Blair are not keen on public debate.
World-class public services are unlikely to result from this pantomime. A fair employment system is what is needed, then it is all down to who can deliver the goods.
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