The battle against privatisation

Outsourcing of public services continues apace as austerity bites.

Last week, a group of public sector workers, supporters and others who've had enough of the neoliberal mantra that "public services improve if they're run by the private sector" protested outside a Capita conference called "New Models of Service Delivery - Opening Up Local Government Services to New Providers".

That was Capita - one of the country's biggest outsourcing firms, playing host (at more than £300 per head, behind closed doors) to senior council people who are in the process of deciding which private companies should win contracts to provide council services.

"There's no transparency - these big outsourcing plans are being discussed behind the backs of the residents and staff who are most affected," said Barnet Alliance For Public Services protestor Vicki Morris. "It's wrong for the companies who will profit from outsourcing to have privileged access to those making outsourcing decisions." Morris's group is fighting a Barnet council plan (called One Barnet) to mass-outsource council services. Capita is bidding for a £750m contract to provide services like finance and revenues and benefits as part of One Barnet.

There's every reason to suppose that Capita will get that contract. If there's a manual on snorkelling cash out of the public sector, Capita wrote it - every page. Last year, Capita's profits increased by 12 per cent to £364.2m, with dividends up by 19 per cent (you can read the rest here if you can stand it).

No matter that the questionable achievements of some of the outsourcing giants have frightened a few councils off. More ought to be terrified. Sefton council recently decided to terminate a £65m contract with Capita Symonds (a division of the Capita Group), because it failed (spectacularly) to deliver expected savings. Mouchel, another of the UK's biggest outsourcing companies, is in a tight spot. In October, chief executive Richard Cuthbert resigned when a £4.3m hole was found in the company's accounts. Mouchel reportedly has a net debt of £879m. The European Services Strategy Unit has an excellent document cataloguing some of Capita, Mouchel and BT's larger contracts and failures, as does almost every edition of Private Eye.

Still, the goldrush goes on. The public services industry is not just big business - it is and has been colossal business. Figures vary, but Unison reports estimated a worth of £79bn in 2008 with growth expected to put that figure near £100bn round about now. Wherever the total settles in so-called austerity, you can rest assured that the likes of Capita will fling themselves at it.

None of which is good news for those at the rough end of the trade. Public sector workers and service users know only too well what happens when services are outsourced. Staff salaries and leave allowances are slashed (often drastically in already-low-paid sectors like care), working hours extended (often to the detriment of a service) and unions sidelined as private companies look to destroy workers' terms and squeeze every pound out of contracts to pass to shareholders and senior managers.

Barnet Unison branch secretary John Burgess describes privatising in the austerity era as "outsourcing cuts" - councils offloading public services to companies which slash services and staff numbers, and diffuse political heat. Burgess would know. He and his members have already taken strike action in protest at Barnet council's radical, and unstable, mass-outsourcing plan (hard questions have been asked this year about the council's ability to manage big contracts with private sector companies).

Southampton council workers are gearing for a similar fight. That council wants to turn itself into a commissioning council - which means it would exist mostly to engage private companies to deliver services, rather than provide services directly itself.

Other councils are taking an incremental, rather than whole-hog, approach to outsourcing. Bristol council is chipping away at care homes and services. Nottinghamshire is doing the same. And, as Vicki Morris says, far too much of it is happening out of the public eye. Contracts fail and money is tight, but ideology prevails.

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In the race to be France's next president, keep an eye on Arnaud Montebourg

Today's Morning Call. 

Good morning. As far as the Brexit talks are concerned, the least important voters are here in Britain. Whether UK plc gets a decent Brexit deal depends a lot more on who occupies the big jobs across Europe, and how stable they feel in doing so.

The far-right Freedom Party in Austria may have been repudiated at the presidential level but they still retain an interest in the legislative elections (due to be held by 2018). Both Lega Nord and Five Star in Italy will hope to emerge as the governing party at the next Italian election.

Some Conservative MPs are hoping for a clean sweep for the Eurosceptic right, the better to bring the whole EU down, while others believe that the more vulnerable the EU is, the better a deal Britain will get. The reality is that a European Union fearing it is in an advanced state of decay will be less inclined, not more, to give Britain a good deal. The stronger the EU is, the better for Brexit Britain, because the less attractive the exit door looks, the less of an incentive to make an example of the UK among the EU27.

That’s one of the many forces at work in next year’s French presidential election, which yesterday saw the entry of Manuel Valls, the French Prime Minister, into the race to be the Socialist Party’s candidate.

Though his star has fallen somewhat among the general public from the days when his opposition to halal supermarkets as mayor of Evry, and his anti-Roma statements as interior minister made him one of the most popular politicians in France, a Valls candidacy, while unlikely to translate to a finish in the top two for the Socialists could peel votes away from Marine Le Pen, potentially allowing Emanuel Macron to sneak into second place.

But it’s an open question whether he will get that far. The name to remember is Arnaud Montebourg, the former minister who quit Francois Hollande’s government over its right turn in 2014. Although as  Anne-Sylvaine Chassany reports, analysts believe the Socialist party rank-and-file has moved right since Valls finished fifth out of sixth in the last primary, Montebourg’s appeal to the party’s left flank gives him a strong chance.

Does that mean it’s time to pop the champagne on the French right? Monteburg may be able to take some votes from the leftist independent, Jean-Luc Mélenchon, and might do some indirect damage to the French Thatcherite Francois Fillon. His supporters will hope that his leftist economics will peel away supporters of Le Pen, too.

One thing is certain, however: while the chances of a final run-off between Le Pen and Fillon are still high,  Hollande’s resignation means that it is no longer certain that the centre and the left will not make it to that final round.

THE SOUND OF SILENCE

The government began its case at the Supreme Court yesterday, telling justices that the creation of the European Communities Act, which incorporates the European treaties into British law automatically, was designed not to create rights but to expedite the implementation of treaties, created through prerogative power. The government is arguing that Parliament, through silence, has accepted that all areas not defined as within its scope as prerogative powers. David Allen Green gives his verdict over at the FT.

MO’MENTUM, MO’PROBLEMS

The continuing acrimony in Momentum has once again burst out into the open after a fractious meeting to set the organisation’s rules and procedures, Jim Waterson reports over at BuzzFeed.  Jon Lansman, the organisation’s founder, still owns the data and has the ability to shut down the entire group, should he chose to do so, something he is being urged to do by allies. I explain the origins of the crisis here.

STOP ME IF YOU’VE HEARD THIS ONE  BEFORE

Italy’s oldest bank, Monte Paschi, may need a state bailout after its recapitalisation plan was thrown into doubt following Matteo Renzi’s resignation. Italy’s nervous bankers will wait to see if  €1bn of funds from a Qatari investment grouping will be forthcoming now that Renzi has left the scene.

BOOM BOOM

Strong growth in the services sector puts Britain on course to be the highest growing economy in the G7. But Mark Carney has warned that the “lost decade” of wage growth and the unease from the losers from globalisation must be tackled to head off the growing tide of “isolation and detachment”.

THE REPLACEMENTS

David Lidington will stand in for Theresa May, who is abroad, this week at Prime Ministers’ Questions. Emily Thornberry will stand in for Jeremy Corbyn.

QUIT PICKING ON ME!

Boris Johnson has asked Theresa May to get her speechwriters and other ministers to stop making jokes at his expense, Sam Coates reports in the Times. The gags are hurting Britain’s diplomatic standing, the Foreign Secretary argues.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

It’s beginning to feel a bit like Christmas! And to help you on your way, here’s Anna’s top 10 recommendations for Christmassy soundtracks.

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Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.