A government efficiency drive aimed at slashing spending in town halls and boosting productivity in the health service is likely to deliver billions of pounds of new business for private companies, the Guardian has learned.
Outsourcing firms are preparing for a bonanza of local authority contracts to provide everything from bin men to back office bureaucrats and have reported a doubling in the number of deals on offer this year. Private health companies are also expecting to earn billions of pounds from the planned overhaul of the NHS in which GPs would take over responsibility for spending £70bn.
Executives at Capita, the UK’s largest outsourcing firm, said the number of opportunities for local authority contracts has already doubled this year and they see the healthcare market as “vast and potentially lucrative”.
Richard Marchant, head of local government strategic partnerships at Capita, an FTSE-100 company which already works for councils in Harrow, Swindon, Southampton and Sheffield, said: “A major problem for the public sector is, we feel, a significant opportunity for us. Opportunities are at their highest level in two to three years. This year we have probably seen a 100% increase in opportunities [compared with 2009] and I suspect we will see another 50% increase in the following year.”
The private companies are rubbing their hands together, then. The money to pay for these services still has to come from somewhere, and at the end of the day it’s us. Me and you. The taxpayer. We either pay it as a tax or direct to the supplying company. Or more likely, in taxes that then get paid to a private company that’ll provide an inferior service that’ll seem cheaper to begin with but will sooner or later cost a fuck load more than expected. PFI anyone? (New Labour may have enjoyed all the off the balance sheet perks of the scam, but they were a Tory idea.)
First off, and I’ve probably said it before, why can’t a local government provide services as cheaply as a private contractor seemingly can? I understand economies of scale and all that jazz, which local governments and councils should able to achieve if they get their shit together work together as some sort of buying union. But just as local governments don’t generally have the buying power of these big companies that take on the contract, they also don’t have the shareholders to look after either.
A lot of these companies that provide public services after privatisation or are contracted out are foreign, too*. This means not only are profits being given out that could instead have meant the service could be provided cheaper or more of it even, but the profits are going abroad and helping to keep another nations economy in the black.
What is needed is for councils to get together and sort their shit out rather than at the first sign of trouble start flogging stuff off and handing out the contracts.
*I am prepared to be shot down in flames at this statement, but even if ‘a lot of’ is a little er, generous, the point remains.