'Reinvestment & Reform' Stormont Spin and Privatisation

national | miscellaneous | news report Thursday August 15, 2002 12:39 by ASF anarcho_syndicalist_federation at hotmail dot com

"Resources and reform must go together." [1] There has been a lot of grand sounding talk up at Stormont about the need for 'reinvestment and reform', with mention of PPP/PFI's (Public Private Partnership and Private Finance Initiatives) and using private sector expertise and investment to help sort out our historically underfunded public services.

"We run many services publicly, yet we have failed to use the skills of the private sector. That must now change." [2]

There has been little to no real discussion or debate regarding PPP/PFI and it is a discussion which our Ministers up at Stormont may well prefer we didn't have - because as we will see things are not quite as attractive as the rhetoric and spin makes out. It may even spur on some effective and long overdue opposition to PPP/PFI initiatives.

An image has been constructed of our local Executive crusading to bring in reforms which grant us salvation from backwards thinking public servants, public sector workers and, well, anyone who gets in the way.

Trimble stated, in his joint announcement with Deputy First Minister Mark Durkan on the £270 million investment package, on July 2nd 2002,

"The total value of the projects and programmes that are included in the package is £510 million when contributions from private funds and from mainstream Departmental budgets are included."

Initially that leaves £240 million to be made up but the overall deficit in Northern Ireland is closer to £ 5 billion.

"We also need to ensure that all new options are explored creatively and urgently, so that our people can have the benefit of better services and facilities. The fundamental idea of our initiative is for reform as well as investment." [3]

So, PPP/PFI, privatisation in effect, is dressed up in the language of reform.

Thinking Outside The Traditional Box

"We realised, however, that to achieve our ambitions for new investment, we had to find new ways, to think outside the traditional box. A step change in investment has to be accompanied by a radical reappraisal of the problem, and a search for new solutions." [4]

"...there are four compass points in this Executive's search for improved public services through its Programme for Government - alternative sources of Finance, Rating Policy and Public Administration combined with action to improve Effectiveness." [5]

So what exactly does PPP/PFI mean in terms of funding and investment. There is no real difference between the two other than name. You may be surprised to learn that in the long term, and often initially as well, PPP/PFI costs more than traditional projects financed from the 'public purse'. Private investors expect a return on their investment and are guaranteed one for 25 - 35 years with PFI.

There are also much greater costs involved with private sector borrowing, and if the company goes bust all the liability returns to the public sector! This means that in practice penalty clauses regarding the provision of services etc., are often not applied. It isn't in the Governments interests to see these 'investors' go bust because they'll end up footing the bill again. This also has the effect of undermining any level of accountability in the provision of services to the public - if things aren't up to scratch but the authorities are reluctant to apply penalties it doesn't take a genius to figure out who'll suffer.

Public sector comparators in the costing of projects can and have been manipulated in order to make PPP/PFI schemes look more attractive. In the case of the London Underground billions were added to the public sector costing on the basis of "reputational externalities" which is just management crap to 'queer the pitch' in favour of privatisation.

Keeping costs down has also resulted in the design quality of projects being compromised, with the result, for example, of a reduction in the number of beds available having become a common outcome of private 'investment' in the Health Service in England. Many of the schemes running in England from the early '90s are faced with fundamental design, quality and long-term service problems.

There has also been a widespread lack of consultation and openness in regard to the implementation of these schemes, often involving the misuse of "commercial confidentiality" in order to justify a lack of information to unions and communities effected. A review process has taken place involving NIC ICTU and voluntary sector representatives which according to participants failed to address the core issues of public interest and workers rights.

Ministers "Remove Risk" While Profiteers Rake It In

What PPP/PFI does do for the Executive at Stormont is to remove the risk to the budgets of individual Ministers as the private enterprise becomes responsible for overspend on the project. This is a key factor in the push towards privatisation at local and national government levels. It also provides the private sector, local building contractors and multi-nationals with a long term, 25 - 35 year subsidy which evades EU scrutiny and interference. In other words it allows the private sector to rake in profits and be guaranteed a steady return from government for years.

Education Leading The Way?

"We have to break down the traditional mindset of the public sector. That mindset is demonstrated by the slow start of PPP's in Northern Ireland and by the relatively limited achievement to date. Our Department of Education leads the way in PPP's." [6]

Examples of the effects of private finance have already been seen in our 'leading' Department of Education. Wellington College was originally to be a 36 acre site but ended up with only 11 acres. The rest of the land was used, not for the benefit of our children's education, but by the profiteers to build 400 houses which they sold at immense profit to themselves. Schools and colleges have also seen support staff transferred to the private sector often on worse terms and conditions than those they previously worked under.

PFI was also used in the building of Further Education colleges like the new Millfield College building in Belfast. Across Further Education there is a growing crisis with some colleges facing bankruptcy, Lisburn Tech is bankrupt, Derry Tech last year handed part of its buildings over to a private consortium, Northwin and is now £1.5 million in debt. Classes are threatened and workers at Northwin are facing cuts in pay and conditions.

Privatisation forces workers from the public to the private sector and undermines all talk about 'equality' in the north. (if the talk ever really needed undermining). It is anti-worker, anti-union, and also anti-partnership at a time when the Trades Union leadership is still clinging on to the lie that the bosses could ever be our 'partners'. The whole process has catastrophic effects on workers terms and conditions, it undermines the right to strike and often sees workers forced into two tier workforces. Those who retain their original terms and conditions on transfer are squeezed out while new employees are brought in on worse contracts. Compass Plc. in the Sperrins have introduced a two tier workforce.

The Fight To Defend Public Services

So how is the Trades Union movement countering these attacks on our services, on workers terms and conditions and job security? On the 4th of December of last year NIPSA organised a Trades Union rally in the Ulster Hall, Belfast, in opposition to PPP and PFI demanding that

"the fight must begin immediately to defend public services". [7]

At the same time (but separately!) Unison leafleted at the City Hall demanding that public services remain public.

NIPSA rightly pointed out, in a leaflet distributed at the rally, that;

"Schools, hospitals and all public and civil services will be up for sale for Private Sector profit. The Public Sector will be faced with a future of uncertainty, unmanageable debts, cuts in services and attacks on jobs and terms and conditions."

Action, yet to materialise, was promised for the new year - its now July.

Blackmail & Acquiescence

The Trades Union leadership have on the whole failed to promote an effective fightback. Many in the Trades Union leadership have allowed themselves to be blackmailed into acquiescence. While most are unhappy with privatisation many are reluctant to rock the boat as privatisation is being presented as the only way out of the legacy of years of underfunding towards a 'secure future' for our beleaguered public services. An NIC ICTU seminar on demystifying PPP/PFI held in the NICVA premises on Duncairn Gardens, in January this year, and attended by representatives from a large number of public sector unions alongside voluntary sector representatives, the CAJ and Transport 2000 ended disappointingly with those present resolving to continue to represent their members once they had moved into the private sector, i.e. after the battle had been lost.

Build Opposition

What is needed is to build on the opposition to privatisation that undoubtedly exists among public sector workers and to begin a campaign which exposes PPP/PFI for what it really is before it is too late. Disclosure on proposals for PFI's need to be pushed for at the start of these schemes and Unions must be forced by their membership to challenge the figures, if this is not done at the start of the process it is too late.

More importantly shop floor and community opposition needs to be built and built quickly. As the Anarcho-Syndicalist Federation stated in a leaflet distributed at the NIPSA rally last year "The labour movement must build rank and file resistance to this privatisation by the back door. To ensure that the government does not get away with this latest attack on working people the ASF is urging the creation of a strong rank and file resistance in our workplaces. We need to take on this threat with direct action against the bosses and politicians and build the maximum of solidarity among those working in our public services across the barriers of trades sectionalism. This solidarity must go right into the heart of the working class communities which will be worst effected."

To really go outside the "traditional box" we must look at alternative ways of running our public services and our lives which put workers in control of their industries. This will result in those best placed to provide these services making the decisions based on the needs of our community and not the budgets of politicians or the selfish motives of the profiteers. Such a shift in thinking and in organising of society is not 'reformist', it demands a truly revolutionary transformation of the way our society is run. It is a vision of a better world were human need comes before and uproots the greed of the few.

FOOTNOTES

[1] First Minister David Trimble in speech delivered to Prime Minister and Chancellor at Odyssey Arena 2 May 2002.
[2] ibid.
[3] Deputy First Minister Mark Durkan in joint statement with the First Minister on "£270 million package to tackle infrastructure deficit.
[4] First Minister David Trimble in joint statement with the First Minister on "£270 million package to tackle infrastructure deficit.
[5] ibid.
[6] First Minister David Trimble in speech delivered to Prime Minister and Chancellor at Odyssey Arena 2 May 2002.
[7] NIPSA leaflet "Oppose PPP PFI"

>From the Solidarity Bulletin issue 10, produced by the Anarcho-Syndicalist Federation. For a free copy or bundle of 10 to distribute contact our Belfast Local address below.

ASF Belfast Local, P.O. Box 505, Belfast, BT12 6BQ.
Email; [email protected]
ASF Portadown Local, P.O. Box 523, Craigavon, BT62 3YA.
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