Blog | March 18, 2014

The following article appeared in the Alberta Teachers' Association publication The ATA News on February 25, 2014

By Shelley Svidal, ATA News Staff
Public–private partnerships, which have been thoroughly discredited in the United Kingdom, are “the big engine” of a massive privatization of public services that is sweeping the world. That’s what Allyson Pollock, professor of public health research and policy at Queen Mary University of London, and one of the United Kingdom’s leading authorities on public–private partnerships and the privatization of public services, told participants at Public Interest Alberta forums on February 12, in Calgary, and February 13, in Edmonton.Pollock painted a bleak picture of the steady privatization of public services, which began with water, electricity and gas, proceeded through telecommunications and pension plans, and is now encroaching on health and education, the last bastions of the welfare state. “We’re facing…the Americanization of our public services through global corporations,” she said. “We’re witnessing the great divestiture of all our public institutions.”She disputed the “global mantra” that an aging population, infinite demand and adverse economic conditions have made public services unaffordable. “All of these things are actually myths because we can afford , and the affordability comes down to politics. It’s a political decision whether we can afford things or not, how we pay for them and who owns or controls them,” she said. In a rich province like Alberta, “everything is affordable if you have sufficient taxation and redistribution.”The underpinnings of the modern welfare state emerged in the United Kingdom during the Second World War. In 1942, the Liberal economist Sir William Beveridge, chair of the Inter-Departmental Committee on Social ­Insurance and Allied Services, developed a plan for reconstruction in which he argued for “the abolition of want,” or poverty. Beveridge “was quite clear that the abolition of poverty had nothing to do with affordability, nothing to do with fiscal austerity,” Pollock said. “It was a political decision not to make things better for those in poverty.”Beveridge’s plan was designed to slay the five “giant evils”—ignorance, idleness, disease, poverty and squalor—and to erect in their place the five pillars of the welfare state— a universal education system, a welfare system with good pensions and social security, a universal health care system, full employment and housing. Following the Labour Party’s landslide victory in 1945, the government started implementing Beveridge’s plan, beginning with the establishment of the National Health Service in 1948. Over the next 30 to 40 years, other countries, including Canada, followed suit. “The United Kingdom was a model maker for the rest of the world,” Pollock said.The publicly funded and publicly delivered National Health Service gave the British people for the first time in their lives “freedom from fear of the bills of a catastrophic illness.…This freedom from fear is something we all take for granted until it’s gone, and it’s what we will all have to defend. It’s the social contract that our politicians make with us,” she said. Of the five pillars of the welfare state, the National Health Service is “the most popular and beloved institution, so the politicians dare to meddle with it at their peril but meddle they do.”That meddling, or assault, began almost immediately and continues to this day. Pollock identified four phases of privatization, which apply not only to the United Kingdom but also to other countries, such as Canada. “These mechanisms are the same, and they’re tried and tested,” she said.The first phase involved “picking off the easy stuff—the catering, the cleaning, the laundry, the ancillary workers—and putting them out to commercial companies, which have grown rich and bloated and become multinationals.”The second phase involved “giving patients choice, giving parents choice or giving seniors choice,” Pollock said. “You no longer had choice within the public system.…Now choice was to be equated with simple market mentalities.” She added, “The choice isn’t about your choice. It’s about the choice that providers have to pick and choose.…When they say patient choice, that’s rubbish. It’s choice of patients they want.”In order to create a market for choice, government had to replace its block budgets with a “hugely inefficient” pricing-based system. “You have to unbundle all your services and put them out to the market, which means you’ve got to break them all up. So you take your radiology or your pathology or your laboratory services, and instead of them now being integrated into patient care…companies compete for every single element of care that you receive,” Pollock said.The third phase involved establishing public–private partnerships (P3s), or unbundling and pricing land, buildings and other public assets. The government put 159 hospitals out to P3 tender and as many schools, prisons and roads. “There’s not one piece of the welfare state left now that hasn’t been subject to P3s,” she said, “but the problem is in the United Kingdom…it’s a totally discredited policy.”Pollock pointed out that Sir Edward Leigh, who served as Conservative chair of the public accounts committee from 2001 to 2010, called P3s “the unacceptable face of capitalism.” And an August 2011 report from the Conservative-dominated treasury select committee identified as illusory the advantages claimed for P3s, including claims that they are cheaper than traditional builds, that they transfer the construction cost risk and that they provide greater accountability and transparency.“You’re paying nowhere near the government borrowing for interest rates,” she said. “You borrow a lot of money and you’re paying it back, as if to a loan shark, over a period of 30 years to 60 years. The public sector is locked into very, very expensive contracts, and it has to pay them. And remember…the shareholders have the first call on any payment that’s made.”In short, P3s cripple hospitals and schools, thereby undermining public confidence in those institutions. To service the high interest rates, “You close what’s left of the public sector—you sell off the land; you sell off the building; you shrink the beds; and of course, you cut the staff,” Pollock said. “Ironically, the money that’s meant for our health services and for our education is now rebuilding the balance sheets of the banks—the banks that caused the ­financial crisis in the first place.”So why does the government not broadcast the failure of P3s? Pollock suggested it’s because the United Kingdom is now exporting them to Canada, to the rest of Europe and to Africa. “We’ve been doing it for much longer, and we’re teaching you how to do it because it’s our management consultants, our treasury and finance department, our national audit office that comes over and trains your civil service and gives them the techniques and skills in how to become a privateer,” she said. “It’s certainly not in the government’s interest to publish the scandal behind the P3s.”In the fourth phase of privatization, the government abdicated its primary responsibility for a public service, health. In 2012, the Conservative-led coalition government introduced a 474-page bill that abolished the National Health Service by replacing the secretary of health’s duty to provide a comprehensive health service with a duty to “act with a view to securing” that service. “The government’s moving at breakneck speed to break it all up, to commercialize it and put the whole lot out to tender. It’s all up for sale at the moment,” Pol
lock said. “Now we’re in a race for the bottom, and it’s quite catastrophic.”The fight against the Health and Social Care Act continues in the high courts. “This act was the culmination of 20 years of barbarity,” she concluded. Public services “will only be there as long as you’re all there to fight for .” ❚View the article on the ATA's website here.