No wonder ministers love outsourcing. It means never having to resign
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Version 0 of 1. When Lord Saatchi writes an article for the Daily Mail conceding the possibility that Marx may have been right about unbridled capitalism being doomed to fail, you know the ground is shifting. He does so as a helpful intervention to the debate about energy prices. At their core, his suggestions (and those of John Major more recently) contain an implicit acceptance that free-market theories of competition yielding efficiency, lower prices for customers and unfettered profit for providers don't quite work when applied to atypical oligopolies. B does not always follow A. This is nothing new to business. For at least a decade all manner of industries have started to take a long hard look at whether outsourcing is always the cheaper and better option, even when it comes to IT projects – the holy grail of outsourcing. Farming projects out is no longer the tacitly accepted automatic choice. So, why does privatisation persist as the automatic choice for a capitalist state? The government last week announced a deal for EDF to build a nuclear plant for the UK. The rationale is that the private sector is better at delivering such projects. However, as George Monbiot points out, we are getting outdated technology at the worst price imaginable, despite having better options on the table. And how can this project possibly be described as "private sector"? EDF is a company 85% owned by the French state. The bulk of the money behind the deal comes from companies owned by the Chinese state. The return on their investment is guaranteed by the British state. What a deal like this announces is not that we don't trust state-owned companies to undertake such projects. Just that we don't trust ourselves. The wholly illogical sale of a profitable Royal Mail at way below value; the refusal to consider leaving East Coast Rail in public management , despite consistent profits and record customer satisfaction; the lack of any discussion as to whether Royal Bank of Scotland would be better off nationalised. These are all examples of the shifting of public property into private management, and ultimately private ownership, at considerable cost to the public purse and with hugely uncertain results. It is easy to dismiss these as evangelical adherence to Thatcherite ideology, or as "the nasty party" creating profitable opportunities for its friends in the City. That is not to say these factors don't feature – I believe they do. Prominently, but not exclusively. Otherwise the involvement of the Liberal Democrats in these decisions is difficult to explain, as is the Labour leadership's refusal to commit to a reversal of any of these policies, despite recent polls showing it would be hugely popular with voters. There is an additional factor at work. Privatisation seems to have gone from dynamic ideological choice, to route of least resistance for the state to abdicate its responsibility in a variety of policy areas. Anything difficult and measurable – problem schools; elderly care; waste disposal; big infrastructure projects – is left to private capital. In exactly the same way that outsourcing has evolved for private enterprise, it has become an expensive way of getting rid of problems to which those in charge have no solutions. Not, I suggest, for reasons of efficiency any more – that ideological boat sailed with soaring energy bills, the fiasco of Railtrack, airport charges and bank bailouts. The prominent feature that privatisation has retained, and that must be nearly irresistible to career politicians, is plausible deniability. The last secretary of state to resign under the strict doctrine of ministerial responsibility was Lord Carrington, in 1982. Others have resigned since then, of course, for personal impropriety or because they were under pressure and couldn't perform the role or to spend time with their families. But Lord Carrington was the last one, so far as I am aware, to stand up and accept that although the mistake had nothing to do with him, it happened on his watch in his department, and therefore he had to go. Privatisation is an undeniable part of that landscape of shifting responsibility and protecting one's career, convenient to all politicians, to the left or right of centre. For which career politician would want to be in charge of the building of a nuclear plant and all that could go wrong with it? It is much easier to close a free school than to explain why a state school has gone disastrously wrong. It is much more comfortable to condemn a private care home for abusing the elderly than to explain mid-Staffs. We all pay over the odds for these privatised services so that the minister responsible has someone external to sack, instead of having to resign. From hallowed flamberge which was supposed to slice through the fat of inefficiency, privatisation has become a limp, cynical, middle-management way of adding the fat of personal insurance. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |