How privatisation damages the quality of life

Your editorial "Can it be right to go private?" (21 May) welcomes privatisation, partly because public bodies would not be "bogged down in the minutiae of employment relations". But these are crucial to the quality of life, income and security of millions of families. When services are transferred to the private sector, it is these qualities that suffer. The lessons of compulsory competitive tendering should be heeded. Competition meant cutting labour costs, which were cut by lowering labour standards. Thousands of jobs were lost, workloads increased, terms and conditions deteriorated and a spate of scandals concerning dirty hospitals and schools followed. Some of the lowest-paid workers in Britain saw their wages fall lower still.

When services are privatised, be it by private finance initiative schemes or market testing, it is likely to result in inferior terms and conditions for staff; if not for existing employees, then for new recruits. This in turn damages society in ways not reflected in balance sheets. Take family-friendly policies. The consequence of the absence of such policies is well known, but difficult to quantify. The public sector, for all its failings, offers better family-friendly provisions than the private sector (one of the reasons why the latter is often cheaper). A third of public sector workplaces offer job-sharing to their women workers; only 15 per cent of private sector employers do so.

Many of the PFI schemes refuse to offer good pension schemes for new employees (one of the ways in which they cut costs). Aside from the issue of PFI employees facing a poverty-stricken retirement, if staff do not have good pensions, the public purse ultimately bears the cost.

Sanjiv Sachdev
Senior Lecturer, Kingston University
Kingston-upon-Thames, Surrey

This article first appeared in the 28 May 2001 issue of the New Statesman, And men shall speak unto men