Dave Prentis

Service after service is being subjected to competition, and huge efforts are being made to move services out of the public sector, with massive incentives to attract the private and voluntary sectors. For the promise of a future payment of £2m you can own a brand-new £25m academy school, all paid for by the taxpayer. The government pays independent treatment centres up to 40% above the prevailing costs within the NHS, and gives lavish subsidies towards start-up costs for private hospitals. Private finance initiative companies will rake in £148bn over the next 25 years in return for providing serviced assets worth just £47bn. A closer look at the markets that have been created quickly exposes the government's double standards. We are told that contestability is required to make public services competitive and efficient. But what is competitive about the exclusive 15-year contracts that form the basis for building programmes for schools and local health centres? Where is the competition in PFI, when a handful of construction and facilities-management companies control the market? By taking such strong measures to enable large corporations to take over public services, the government has left a gaping breach between itself and the voters - the users of public services or, in the parlance of the market, the customers. This gap is wide enough for the newly caring Tories to fill. And why should it be harder to believe that the Tory party that started us down the road of privatisation, sold off so many publicly owned assets and starved what remained of public services of resources, now wants to support them, than that the Labour party that brought us the welfare state now wants to sell off and privatise what is left? This is the ultimate flaw in the government policy. If the voters had wanted a government that would transform public services into profit-oriented, lean, market-driven systems, they could have voted for the Conservatives at the last three elections. They still might at the next election. That is the real danger.

When the unions fought the general election with Labour, we campaigned for quality public services. We were supporting a government that has given us more doctors, nurses and teachers, shorter waiting lists and new schools and hospitals. But now this same government is introducing policies that threaten our public services, particularly the NHS and education. These policies were never discussed openly during the election. What is worrying me is not only the direction but also the speed of reform. "What matters is what works" implies building a sound evidence base for policy. The rapid pursuit of outsourcing and private-sector provision without an evidence base, while actually ignoring evidence that challenges the policy, can only be described as ideological. Hospitals and schools will shut if they don't win enough contracts or attract enough pupils in competition with their "rivals" from the private sector. Sometimes the the playing field is tilted further against the public sector, as in the case of housing, where councils are in effect prevented from investing directly in their own housing and are required instead to transfer them to private management. All new school investment is now being forced through the PFI or academy route. Architects' professional bodies are despairing at the lack of design imagination and at structures built to last little longer than the lifetime of the contract. Of course some services are more equal than others. Schools and hospitals and other services provided through PFI and PPP are insulated from the market. The merchant banks have a guaranteed stream of income from these expensive and lucrative contracts for their lifetime, typically 25 years, whether the service or building is needed or not. In fact, public authorities will have to direct services to failing PFIs, and away from other efficient public facilities, to help balance their books. Some market! It is common for school meals and cleaning contracts in PFIs to be given to subsidiaries of the consortium's members for 25 years without tendering or competition. And even when the service is poor the public sector has to pay to escape the PFI. For example, when Bedfordshire county council sacked HBS for poor performance on a £250m contract it had to fork out £7.8m to pay it off. Gordon Brown, amid the foundation hospitals debate, made a speech to the Social Market Foundation (SMF) in which he said that markets in healthcare were inefficient, had imperfect information available and prioritised the wrong things. He was right, and the freedoms of foundation hospitals were restricted. In August John Hutton, the Cabinet Office minister, used the SMF to make the case for markets and competition in health and education to deliver better services and more social justice. He did this on the day the Office for National Statistics announced that social inequality had risen for the first time since 1997. Labour had stemmed the rise in inequality under the Tories with its public-spending increases and tax credits, but can it be right to conclude that we need more marketisation rather than less? Markets in health are distinguished by the fact that every activity has a price and that more resources are diverted into negotiating prices, contract compliance and administering financial flows. Primary care trusts are to be turned from service providers into organisations that solely buy services, no doubt with the help of consultancy firms such as United Healthcare, headed up by the prime minister's former health adviser. They will be obliged to create markets where none exist, just in the way publicly funded but privately run independent treatment centres (ITCs) have been imposed on local areas. The health secretary, Patricia Hewitt, has promised £3bn to the private sector for ITCs. It sounds like a good idea to shorten waiting lists - but not when they can poach scarce NHS staff; not when they are guaranteed a flow of operations that means NHS hospitals lose their work; not when they are paid more than the NHS. The ophthalmology department at the John Radcliffe in Oxford was undermined by the imposition of a treatment centre by the Department of Health, losing the routine cases that made it possible to train doctors and pay for the specialists used for the more difficult cases. Efficiency will be the guiding force, not social need, and hospitals will specialise to maximise income. Preventing health problems is not a priority; as US health companies know, there is real money in treating long-term illnesses. Already "payment by results" is destabilising local health budgets and the cost of PFI constricts hospitals even more. In 2004 we found that PFI hospitals had some of the biggest deficits and were shutting wards and freezing recruitment. This is being repeated in 2005 and the BMA is warning that there may not be jobs for those in the expanded doctor-training programme. Meanwhile, the education secretary, Ruth Kelly, is is turning secondary schools into academies - owned by rich businessmen, showered with tens of millions of pounds of public money and allowed to teach whatever they want, even creationism! All this wouldn't be so bad if there was any evidence to show that private companies are better at providing public services or that competition drives up standards. Quite the opposite. We have plenty of evidence showing that markets harm public services. What about hospital cleaning, or school meals, or the railways? These services have failed miserably. Is this what we can expect for other public services when competition and markets rule? Take hospital cleaning, probably the service that has had the longest exposure to market forces. Now it is lean and cheap to run but fails to meet the standards of cleanliness needed. There are too few cleaners, a lack of training, casualisation and unacceptable levels of infections. That is the logic of the market. Governments have short memories. This one has forgotten why we have public services in the first place - to tackle market failure, to ensure a safe environment, to safeguard public health and education, and to equip Britain for a leading role in a global world. Although I lead the largest public-service union, I've deliberately not focused on the workforce. I have hardly mentioned the harmful effects contracting out has on pay, conditions, equal pay, hours, training, holidays, maternity leave and pensions. That's because I'm not just a trade unionist, but also a citizen who cares passionately about public services. That's why, as a friend of the government, I am worried that the waste and instability of public-service markets will not deliver a fourth term. We know what works: sustained, high levels of investment; cooperation and collaboration, not competition; investment in staff and teamwork; joined-up thinking rather than fragmentation; embedding change rather than permanent revolution and upheaval. That's the message Labour members in Brighton want to hear this week. http://www.guardian.co.uk/comment/story/0,...1578129,00.html

Dave Prentis was born and brought up in Leeds and went to the University of London where he took a bachelor of arts degree in history. This was followed by a masters degree in industrial relations at the University of Warwick. He was UNISON's deputy general secretary (DGS) from its formation in 1993. In his role as DGS, Dave directed UNISON's national negotiating team and oversaw the union's policy making functions. He was elected general secretary of UNISON, the UK's largest union, on 28 February 2000, and took up the post on 1 January 2001.