04 December 2008
By Tash Shifrin Unions have slammed government proposals to sell off a string of public agencies and assets as ‘reckless’, while the Treasury admitted this week that the poor state of the economy could scupper the plans. Chancellor Alistair Darling’s Pre-Budget Report listed a series of government assets that will be reviewed, including the Met Office, the Royal Mint, Ordnance Survey and British Waterways’ canalside property portfolio. Standard Life chair Gerry Grimstone, who is heading the asset strand of the government’s Operational Efficiency Programme, would examine ‘the potential for alternative business models, commercialisation, new market opportunities and, where, appropriate, alternatives to public ownership’, the PBR said. But the Public and Commercial Services union said privatisation would mean ‘selling off the family silver’. A spokesman added: ‘The worry is it’ll be something like Qinetiq’, the defence research body whose privatisation was heavily criticised by the Commons Public Accounts Committee. The MPs accused top executives of ‘profiteering’ from the sell-off. The PCS spokesman added that sale of the agencies was ‘a one-off saving, like the money generated in the 1980s by privatising the utilities’. But it was ‘debatable’ whether this would fill the ‘black hole’ in the public finances caused by government borrowing. Dai Hudd, general secretary of Prospect, the union representing scientists and technical experts in the civil service, said many of the agencies and assets had been reviewed several times before, and privatisation had been rejected. ‘It’s been kicked back time and time again,’ he said. The state of the market meant it would be ‘reckless to do it now’, he told Public Finance. Potential purchasers would have to raise funds from the banks, which were themselves being kept afloat by public money, he said. ‘The government would be lending out money for commercial buyers to snap up its assets at rock bottom prices.’ But the Treasury is not sure the asset programme will release any money. ‘At the moment, we haven’t assumed that we’re going to save any money, because these are general reviews,’ a spokesman said. ‘Maybe the reviews [will] suggest we can hive off parts of organisations quickly... it’s too early to say.’ Plans to sell off any of the agencies could be scuppered by the effects of the recession and credit crunch, he admitted. ‘Even if we think the best thing to do is sell the asset... it might be that the market conditions are not right,’ the spokesman said.
PFdec2008
