Headlines: May 23rd, 2001

The thinking behind statements in the Labour Party’s manifesto about radical reform of public services is now becoming clearer. In its first term of office Labour embraced private-public partnerships, although they have been confined mainly to capital projects. For the future, structural change involving the private sector is on the agenda for all public services, because it is believed that extra cash alone will not deliver change. In the light of this development it becomes clear what the statement by Tony Blair that: “There will be no barriers and no dogmas” actually means. Changes on this scale would fundamentally alter the role of government from a provider of public services to a facilitator.The health service would be at the forefront of change. It has already been announced that 20 new treatment centers would be set up in partnership with the private sector. Plans have now been revealed to buy in services from the private health sector and it has been speculated that primary care groups and hospitals could be run under the Private Finance Initiative. In education, the option to contract out the management of schools, currently restricted to failing schools, could be extended to all schools. The Party’s manifesto makes it clear that despite any changes, services would continue to be free at the point of delivery.

A Conservative Party spokesman when asked if he thought the Labour Party had stolen their clothes in respect of the health service replied: “I welcome their conversion to a ideas that we have always advocated”.

Applying this principle to the central and local government administrative machines, employing large number of staff, would mean that back office functions such as processing council tax payments, could be handled by contractors. Capita Group has already set up a business processing center in the north west to handle standard processing and is seeking more customers who currently handle the task in house.

UNISON has voiced trade union opposition to greater involvement of the private sector and expressed fears that it could lead to reductions in the pay of public sector workers who transfer to contractor companies. In support of this view the union points to the sharp reduction in the pay of cleaners when private contractors moved in.