NHS turmoil is just the start of Tory ideology run wild

By Polly Toynbee

Guardian.co.uk

Every public service will be put out for tender if Cameron gets his way, with contracts to trade and accountability gone.

 This is it, the last veil ripped away. In the Daily Telegraph today, David Cameron penned his preview of the long-delayed white paper on public services. The paper's editorial saw the light: "For the first time he explains the full scope of his ambition to roll back the boundaries of an overweening state." This is indeed the eureka moment for the country. Nothing like this was ever breathed before the election.

Every single public service will be put out to tender. Everything. Well, not MI5 or the judiciary – but everything else, including schools and the NHS. Forget the camouflage of localism and choice: however much local people like local services that work well, they will have no choice in the matter. A private company – or in theory a very large charity – can challenge any service they would like to run and bid to take it over. If Serco or Capita think they can turn a reasonable profit from cherry-picking anything the council or the government runs, they will have the right to demand it is put out to tender. If they bid below the current cost and claim that quality will not fall, it's theirs for the asking. Not the people, not their elected representatives, nor the users of those services will be able to refuse. It will be taken out of their hands because competition law will decide. If local people want their council to hold on to a much-loved service, a company can take the council to court – at huge and wasteful expense – and almost certainly win the right to tender and win the contract.

The NHS bill now marching through parliament is the model. Behind the eyecatching GP commissioning, the real radicalism is in making any part of the NHS open to contract by "any willing provider". Any company can claim the right to provide any part of the NHS – even if the local GP consortium is very happy with the NHS surgeons providing operations. Neither patients nor GPs will choose once competition law enforces tendering out. Cameron reveals his white paper on public services will lever open everything in the same way. EU competition law doesn't currently apply to public services or the NHS, unless commissioners choose to put a service out to contract, in which case it must be opened up fairly across the EU. Now everything is open for business.

Democracy will scarcely get a look in. People can't choose if services are contracted out. Once contracts are signed, nothing can change. You can throw out rascally councillors or governments, but the contracts will go on regardless. Like PFIs, they will be traded as financial instruments, sliced and diced according to risk and sold on. This sets a nuclear bomb under all public services, because there can never be any going back. If you don't like the sound of this, Cameron's government can be voted out but it will be virtually impossible to return services to a public realm that no longer exists. Ownership of the contracts and companies moves on, and the public sector loses any capacity to take them back.

Is contracting out necessarily value for money? An extensive trawl of the literature was done for John Hutton at the DTI by the pro-market economist DeAnne Julius only three years ago, but even she failed to find any decent evidence that contracting out works as a general proposition.

It's not a perfect match, but thehistory of the PFI calamity is well-documented, on the left by Allyson Pollock and on the right in the Telegraph by Andrew Gilligan, and in Tory MP Jesse Norman's campaign to reclaim some of the billions skimmed off these lucrative contracts. At the campaign site you can find plentiful cases of a PFI school charged £302 to fix one electric socket or how the M25 PFI cost an extra £1bn. Public servants negotiating big, inflexible and unchangeable contracts up against companies employing the sharpest lawyers and accountants will always be at a disadvantage. Gordon Brown and Baroness Shriti Vadera's pig-headed determination, against expert advice, to put the London tube into a web of PPP contracts stands as the worst exemplar: it fell over and cost a fortune.

When I spoke to Norman, he said he'd warned his leader that "many PFI contracts provide an object lesson". He says the danger is that contracts can be "very expensive, very inflexible and opaque". The solemnly staid Chartered Institute for Public Finance and Accountancy expresses its concern: "Where is political accountability when the contracts are not aligned with the political cycle?" And, they wonder, if everything is broken up into small outsourced pieces, "how are authorities to pursue the shared services and efficiencies of scale urged on them?"

Cameron says his reforms will bring "openness, creativity and innovation", but in fact these contracts are the closest you can get to a Stalinist five-year plan – opaque, undemocratic and unresponsive to change. Democratic politicians adapt public service priorities all the time – not always for the best, but fettered only by responsiveness to voters, not to badly drawn fixed contracts.

Cameron is taking an ideological blowtorch to anything branded "public". He says this is the "decisive end of the old-fashioned, top-down, take-what-you're given model of public services". His mission is to "dismantle big government and build the 'big society' in its place". But it may look more like big Serco than big society.

Labour is in a quandary, afraid Cameron is laying a trap. Opposing the plan risks wearing the cap of "old-fashioned, top-down" anti-reformers defending the unions' self-interest. Besides, Tony Blair began all this – and public services will always need eternal effort to invigorate and renew. But these are changed times, and it's not Labour who need to be afraid. All around people are starting to see the destruction of public services they had forgotten to appreciate. Libraries, Sure Starts, charities, after-school clubs, youth clubs, parks and gardens, old people's care, hospitals, clinics, midwife visits, meals on wheels and a thousand other things once taken for granted are shrinking before their eyes. If ever there was a bad political time to privatise the lot, this must be it.

Cameron is setting his runaway ideology, speeding down the tracks on collision course with public sentiment. This only confirms that tell-tale moment of glee when the Tory benches shouted "More! More!" as Osborne ended his budget listing the deepest public cuts since the war. Political wisdom would advise them to engage in a little more hand-wringing anguish, but they just can't resist following their animal instincts. Labour has nothing to fear in standing up for the public good.

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