Dead weight of market forces, by Dave Prentis

1 Feb 07
Despite record levels of investment, the public sector is seen to be in crisis. This is because services are suffering from having simplistic market models foisted on them, argues Unison's general secretary

02 February 2007

Despite record levels of investment, the public sector is seen to be in crisis. This is because services are suffering from having simplistic market models foisted on them, argues Unison's general secretary

The attempt to turn public services into private markets simply isn't working. With an impending change of political leadership, now is the time for a debate about how to make the best use of resources to deliver high-quality public services.

On the one hand, a much-needed injection of investment has produced tangible results. Generally, education standards are rising and hospital waiting lists are falling fast.

There is so much to be proud of, but few are celebrating. Polls and surveys tell us that, despite having positive experiences of public services, voters are losing faith in the Labour government's ability to manage them.

How has this happened? It is becoming clear that the government has made a fundamental error in its approach. Instead of engaging with the people who deliver public services to find ways of improving them, it has become obsessed with reconfiguring them into a competitive marketplace.

Nevertheless, the prime minister insisted just last week that there would be no let-up on the reform agenda.

Public organisations are being broken up and forced to compete, with each other and with the private sector, for customers and contracts.

We've seen it in local government. It's being imposed on our health service. Next in line is the probation service, if the Offender Management Bill is passed in its current form.

The theory is that market forces will drive improvement and innovation. But there is little evidence of this working in practice. Even the government's favourite examples do not bear scrutiny. The prison service is often mentioned. But research shows that private prisons are highly variable in quality, and cut costs by making employees work more for less pay. And as the former governor of Brixton prison recently warned, their perverse incentive to expand might be fuelling the rise in the prison population.

Ministers also like to claim that independent sector treatment centres have reduced waiting times. But the Commons health select committee recently found no hard evidence that the private sector has contributed anything that couldn't have been achieved at lower cost by investing in NHS capacity.

Meanwhile, the forces of commercialisation are doing real damage to the public service ethos that service users rely on.

We have seen hospitals setting aside budgets to advertise for patients. One foundation trust is using its new freedoms to set up a private facility in Dubai. Another is talking about 'profit share' schemes for staff who joined the NHS to serve the public, not compete for profits.

The truth is that simplistic market models have little application to the complex practical realities of public service delivery. Their imposition has led to fragmentation, financial instability, increased transaction costs, and short-term cost-cutting. Working conditions have deteriorated and fundamental principles of social equity and public accountability have been compromised.

Debate has become polarised around a simplistic notion of 'reform' and fails to address the real challenge of developing new and better services. And, in itself, an internal market creates a huge layer of managers to supervise and police it.

Away from the headlines, there have been numerous examples of positive reform in our public services where employees and their unions were centrally involved.

Where they have been properly consulted, and offered genuine security and opportunity through the process of change, they have taken the lead — in redefining professional roles, rethinking organisational boundaries, and harnessing new technologies.

Unison wants to see what lessons can be learned from these experiences. Last month, we convened a summit in collaboration with the progressive think-tank Compass, which brought together frontline staff, with user groups, policy specialists and academic experts to identify challenges and develop solutions in key services.

It's a conversation we will be continuing, and that we hope others will want to get involved in. As the political landscape changes, there might be an opportunity to move the debate into new, positive territory and get the project of public service renewal back on course.

Unison wants to be a partner in the process of reform. We will support changes that bring real benefits while offering a fair deal to our members — as we have done in the past.

But we will continue to expose and oppose the false solutions of marketisation and privatisation that have held us all back for too long.

Dave Prentis is the general secretary of Unison


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