Outsourcing in the UK: How Widespread?

“Outsourcing of public services to the private and voluntary sectors has almost doubled to close to £80bn in little more than a decade and makes up a far larger part of the economy than previously thought.” (Financial Times 09.07.08) A third of all public services – far more than previously thought – are now delivered by the private and voluntary sectors, according to this report commissioned by the government.

The FT goes on, “The market is worth £79bn, employs almost as many people as the NHS and accounts for 6 per cent of gross domestic product, making it a larger industrial sector than pharmaceuticals, automotive or electricity, gas and water.” The study shows that health is the largest sector of the public services industry, accounting for £24bn of spending last year, followed by social protection – which comprises unemployment, housing, disability and old age – at just less than £18bn, defence at £10bn and education at just under £7.5bn. The study by DeAnne ­Julius, an economist and former member of the Bank of England’s monetary policy committee, shows the public service now embraces everything from health to waste management, IT, welfare-to-work, training, construction and legal services.

Julius has an interesting CV. She goes around hoovering up lucrative posts with private companies. Until recently she was on the board of Serco which (guess what?) tenders for public contracts. Could this explain her view that, “Twenty years ago, too many things were being done in the public sector; it ossified”? Previously she was on the Monetary Policy Committee of the Bank of England. And she began her career as an operative for the CIA. She says she never killed anyone with her bare hands back then. She was just an economist. Well, good. But she was part of a killing machine.

Unison, the biggest public sector union, attacked the report, saying her advisory panel was made up of figures from companies with lucrative public service contracts. “We need a genuinely independent review of the public services industry,” said Dave Prentis, Unison’s general secretary, not one that “simply asks multi­national companies what would make their lives easier”. That’s right, Dave. And this drift to go private means not only that standards of service will go down, but that your members’ jobs and conditions are on the line. It’s time to call a halt to this drift.

This article first appeared on Socialist Appeal.

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This post was written by Fred McDowell