CAMPAIGNERS criticised the head of NHS England today after she backed the return of discredited private finance initiative contracts.
NHS England chief executive Amanda Pritchard floated the controversial idea as part of what she called a “radical” rethink in how Britain funds its infrastructure.
Recent data shows that the cost to repair Britain’s crumbling NHS buildings has spiralled to £13.8 billion, the highest on record.
Speaking to BBC Radio 4’s Today programme on Thursday, Ms Pritchard said: “We need to think much more radically, particularly about capital.
“So I think we now must consider private capital investment in the NHS because if we don’t fix our buildings, if we don’t fix our technology, we’re not going to get to a place where we can really drive that long-term improvement.”
The suggestion was slammed by anti-privatisation group We Own It.
Research by the group found that the current maintenance backlog bill is dwarfed by a £44bn debt that 80 trusts still owe to private firms for historic PFI contracts signed off by Tony Blair’s government.
Families, relatives, and the legal teams of the detainees demand information from police and justice for the arrested workers. Photo: SUNTRACS/X
Organized workers have denounced the police’s brutal treatment of demonstrators before and after the protest. President Mulino has called them “terrorists”.
Over 480 people were arrested in Panama on February 12 during a national demonstration called for by trade unions and social movements. Workers and protesters took the streets to raise several issues in the country:
To protest a law intending to privatize social security (Law 163)
To honor the memory of Al Iromi Smith Rentería, a worker killed by Panamanian police on February 12, 2008
To protest Donald Trump’s expansionist statements regarding the Panama Canal
Police repression was extreme. After the police descended on the protests in Panama City, more than 100 demonstrators were injured and 15 policemen were wounded.
The Director of the Panamanian police, Jaime Fernández said, “We managed to capture 450 people,” for which reason they had to improvise “a special jail” due to the long lines of handcuffed demonstrators. Other sources report almost 480 detainees. The right-wing president, José Raúl Mulino, labeled the trade union which led the protest, the National Union of Workers of Construction and Similar Industries (SUNTRACS), a “terrorist” organization and like a “mafia” and announced that “the full weight of the law” will fall on them.
SUNTRACS denounces police brutality and demands release of detained workers
In a press conference on February 12, a representative of SUNTRACS, and a participant in the demonstrations, denounced the actions of the police. The representative stated that without trying to mediate the situation, the police “began to brutally repress” the demonstration. The workers then sought refuge in the hospital under construction. Reportedly, the police began to indiscriminately arrest workers from the construction site.
Regarding President Mulino’s statements, the SUNTRACS representative said “It’s outrageous that because we go out to protest they call us “terrorists”, as the disrespectful President [of Panama] said. [Mulino] does not respond that way to Donald Trump, despite all the threats he has made against our national territory and our country.”
Finally, he demanded the immediate release of the detained workers: “We will defend our comrades to the last consequences.”
In a press conference on February 13, a representative of SUNTRACS said that the police have not released any information about the detainees, except to certain relatives of the wounded, one of whom has undergone surgery for his injuries. He also denounced the beatings that several prisoners suffered after their apprehension.
Controversial Law 163
The law in question, which is being debated by the National Assembly, has been baptized as Law 163, which seeks to reform the current legislation on social security. SUNTRACS, along with other trade unions and social movements call the bill a clear attack on workers from the business and neoliberal groups.
Under the pretext of an economic deficit of the Social Security Fund, Law 163 seeks to:
eliminate the autonomy of the Social Security Fund
increase the retirement age by three years (60 for women and 65 for men)
increase the requirements for retirement
transfer millions in Social Security funds to private companies
and various other measures
According to SUNTRACS, one of the project’s objectives is to take money from the insured, put it in private hands, and give the elderly a very poor retirement.
“We will not allow this. We are in our legitimate right to have a promising future, and not the future they want to give us. We are going to resist.” In addition, he called for the solidarity and organization of the Panamanian people in the face of Mulino’s neoliberal onslaught.
For his part, Saúl Méndez, Secretary General of SUNTRACS, said that the bill seeks “to impose the theft of insurance money, increase the retirement age, rob pensioners and workers of their money to give it to the banks. We all want peace, but not the peace of the cemetery, the peace of misery and hunger that they want to impose on us. That is why we need unity, firmness and discipline in the face of this problem.”
Struggling firm to appeal to competition watchdog to hike fees by more than Ofwat-approved 35% over next five years
Thames Water is to appeal to the UK’s competition regulator to be allowed to raise customers’ bills over the next five years even higher than previously granted, prompting a furious reaction from campaigners.
The water company, which serves 16 million customers in London and south-east England, will ask the Competition and Markets Authority (CMA) for permission to raise bills from 2025 to 2030 by more than the 35% the water regulator for England and Wales, Ofwat, approved last year.
Thames Water, which is on the verge of financial collapse, had wanted to raise bills by 59% over the next five years. It said on Friday morning its board had concluded that Ofwat’s final determination would not allow the investment and improvement needed to improve its services.
The move was swiftly criticised by clean water campaigners. Feargal Sharkey, the former lead singer of the Undertones, said Thames was showing “two fingers to customers” by seeking even higher bills, having “dumped billions of litres of sewage into rivers” and extracted too much water from chalk streams.
Water bills are going up in England and Wales, even after the series of scandals around water companies. Last year water firms paid £158 million in fines following a record-breaking number of sewage dumps in rivers and seas.
Severn Trent Water and United Utilities alone reportedly made 1,374 illegal sewage spills over two years. (Both companies took issue with the analysis that led to this figure but acknowledged concerns about sewage discharges.)
There have been other notable incidents. Whistleblowers have told of water companies that fail to treat legally required amounts of sewage and divert that sewage to public waterways. To add to the disgrace, water companies have generally failed to invest enough in the UK’s water infrastructure.
Research suggests that governments have been pressured to become more “business-like”. This has given rise to the use of public-private partnerships (PPPs) to run important public services, such as water, transport and even prisons. Water companies in England and Wales are private companies that bid for their contracts, while in Scotland, the water provider is a public organisation.
While other findings show that PPPs can support important public service needs, such as public health, research by my colleagues and I examines a consistent pattern in UK PPP scandals and wrongdoing. Over the past decade and a half, billions of pounds of taxpayers’ funds are unaccounted for. This appears to be largely because private interests have been prioritised over public needs.
As a researcher of PPP wrongdoing, the reasons for many of the scandals seem obvious. My colleagues and I studied parliamentary inquiries and reports that have scrutinised PPP wrongdoing. This research can tell us a great deal about the UK’s predicament with regard to the failings in the water industry.
The first lesson is that, in general, many PPPs are motivated actually to reduce the quality of the services they deliver. One parliamentary inquiry found that contracting services out from the public to the private sector had become a “transactional process” where cost-cutting is favoured and the “knock-on cost” to users results in a lower-quality public service.
Other findings showed that companies regularly reduced the quality of a service to maximise profits. One way was to bid for a public service at a low price. A Public Accounts Committee member observed that companies coming in with low quotes for contracts can end up damaging services by under-investing in them.
Another example is Sodexo – a private prison management provider. It cut employee numbers by around 200 and a subsequent BBC Panorama documentary detailed escapes and widespread drug use in the prisons they managed and also criticised a lack of safety for both prisoners and prison officers. Sodexo acknowledged the programme had highlighted problems and said it would investigate, but added that there had been “positive actions and improvements” already.
Similar practices were observed at a children’s prison run by security firm G4S, where an officer was left with brain damage after an attack by inmates. G4S admitted liability for the officer’s injuries and agreed a settlement with him.
Pay the fine, it’s cheaper
The second lesson is it can be cost-effective to breach contracts and pay fines. Companies sometimes breach the terms of their public-private contracts because it’s in their economic interest. This even has a name – economists call it “efficiency breach”.
When observing the fines in comparison to the profitable contracts, it’s easy to posit what the motivations of many in the UK’s public service system are. In 2017, despite previous indictments of wrongdoing, G4S won £25 million of government contracts.
In 2020 the firm won another £300 million contract to run Wellingborough “mega-prison” in England. Despite some raised eyebrows, G4S said at the time it aimed to make the site a blueprint for “innovation, rehabilitation and modernisation” in the prison service.
Pay the shareholders, invest later
The third lesson is that shareholders are more important than long-term investments in a service. This is perhaps the most notable feature of the UK’s public service system, where a vast array of shareholders benefit from the profits made by PPPs. In one of the parliamentary reports we analysed, which details the collapse of the facilities management firm Carillion, it was clear that shareholders’ interests trumped good management and long-term investment.
As was noted in the report, despite Carillion’s collapse, the firm paid out £333 million more to shareholders than it generated in cash between 2012 and 2017. Often, this shareholder primacy can even go against a firm’s own employees rather than just the state and taxpayers. One MP noted that despite its pension scheme being in deficit, shareholders were still receiving dividends.
Often, shareholders are prioritised because of short-term thinking. These processes can lead to firms passing these bad practices down their supply chains.
The behaviour of water companies is suggestive of these dynamics. Since water companies have been privatised, they have loaded themselves up with debt (£64 billion) but paid out £78 billion to shareholders. Some 70% of these shareholders are “foreign investment firms, private equity, pension funds and businesses lodged in tax havens”.
So what should be done? There are plenty of ways to enhance and improve the UK’s PPP problems. The most obvious may be to renationalise public services and renew the quality of public services through New Deal-style investments. After all, this is what what most of the UK electorate wants.
There are other options. An innovative and exciting frontier is opening for businesses to recognise their environmental responsibilities – initiatives in New Zealand, India and Ecuador are giving the status of personhood to rivers and ecosystems, for example.
Outdoor fashion brand Patagonia has “the Earth” as its only shareholder, and hair and skincare brand Faith in Nature has appointed nature to its board. Imagine if the UK’s water companies had the rivers and seas represented.
In the end, only time will tell how water companies will be held accountable. But for the moment it’s the UK taxpayer and consumer paying the price.
G4S was approached about this article but declined to comment.
Keir Starmer confirms that he’s proud to be a red Tory continuing austerity and targeting poor and disabled scum.
WES STREETING appointed Baroness Camilla Cavendish, who previously led David Cameron’s Number 10 Policy Unit, onto the board of the Department for Health this month, saying he wanted to have “cross-party” figures of “different political persuasions” to guide the NHS.
He wants to build a “cross-party consensus” to “reform the NHS.” But what is this consensus? In 2007, when Labour’s Gordon Brown was prime minister Cavendish wrote that “the hungry maw of the NHS is swallowing more and more resources, at the expense of virtually everything else.”
Cavendish denounced the NHS as “Britain’s last big state monopoly,” complaining that “its powerful unions view any slowdown in spending growth as a ‘cut.’ And cut is a deadly word in political terms.”
Cavendish said the NHS badly needs more “innovation,” which is only possible “by introducing competition.” Cavendish said New Labour had not gone far enough down this road. She welcomed Tony Blair’s attempts to “introduce competition” by letting private providers carry out some operations, and the introduction of foundation trusts, but claimed: “Ministers are too easily persuaded that the battle is between public and private provision. They are ashamed to endorse the private.”
She was worried Brown did not believe enough in “market-based reform” of the NHS. She said the health service was “a bloated state” and argued “the writing is on the wall: a tax-funded free healthcare system is looking ever less sustainable.”
The NHS was certainly in better state in 2007 than now. However, while the idea it was bloated, overfunded and needed more privatisation might appeal to Streeting, it doesn’t appeal to Labour voters. Cavendish went on to join Cameron’s No 10 operation in 2015, when the Tory PM did indeed stick with more NHS privatisation and less NHS money.
Cavendish is expected by Streeting to sit with former Labour health minister Alan Milburn on the Department of Health board and build up a consensus for NHS reform. Both seem drawn to Cameron’s approach — accepting and accelerating New Labour’s NHS privatisation, while adding Tory spending reductions.
