Business Nonsense

10 11 2011

Today was the day that the news of the first privatised NHS hospital was announced, the governments idea of how to improve failing services and save money. There is cynicism as to the efficacy of this. Time to give it the former civil servant spin.

It’s been fun blogging these past few months, and most of my stuff has been about mental health, sometimes mine, sometimes everyone else’s. Rarely, if ever, have I delved into the joys that are the world of politics, usually because it’s fraught with extreme views. But, seeing as I discuss my demise, what’ve I got to lose?

Ok, I’ll start off with a political statement. I’m no fan of the Labour party, it’s hard to have respect for something that was fronted by Tony Blair, seriously dude, why walk like you left in the hanger in your jacket? Of course he pales in significance compared with the financial whizz who happily declared the end to boom and bust economics. The Labour faithful will declare their unending hatred of Thatcher, I declare my unending frustration with the financial tomfoolery of one Gordon Brown.

Still, we could continue to have fractious political debate but it wouldn’t change the current situation.

The problem with government run institutions such as a hospital is that there is no business sense. Privacy, as an idea, introduces competition which means that you either get learned and meaner or you don’t survive. Hell, competition is what has driven any species forward. Government establishments survive on politics, seemingly endless amounts of money, and management who know the business but rarely know business itself. All bad.

So we should be privatizing, right? Wrong!

Budgets are limited regardless, and while working for the government generally means a generous pension plan and occupational health care, wages can be quite poor. To be fair to many government employees, it’s only these generous pensions and OHCare points that make working in such places worthwhile. The pay is crap, the conditions can be terrible, the pressure can be immense.

The politics involved are there to protect staff etc in some cases, but there is a definitely bloat of bureaucracy which inhibits work and can make staff feel like shit. I’ve worked in a place where I had no less than ten managers who felt they should be involved with my job despite there being a defined line of command. Pains in the ass. Plus, whilst they would know about the business per se, they wouldn’t know how to run things well because it wasn’t their job to know.

Large organisations can have significant benefits, specifically the financial power which they wield. You’d be surprised how big a discount you can get when you’re prepared to buy large amounts that no-one else could.

Another financial thing to consider is that a private organisation has to make a profit, otherwise why would they do it? This means that there’s less money for actual services in order to help the shareholders make their dividends. Government services are unable to make profit (unless you’re police of course but those are fines, that’s different, it’ not like the government have introduced them as ways to make money) so it’s about the service.

Add to this that, thanks to the competition model introduced into the Prison Service, we have evidence that non privatised prisons who have to cut costs to remain non privatised can actually undercut any business out there. As such, we have yet to see if these establishments can provide the service demanded but they can’t be as bad as some examples.

What I’m trying to say is that cuts need to be made, such is the demands of the wrong end of capitalism, and there are ways to do that. However, primary concern for any of these services, prisons, police, fire service, The NHS, is delivering care properly. You CANNOT make money from peoples needs like this, it’s immoral and it’s also bad business to pay someone to something you can do yourself for less money.

Privatisation of public services is an incredibly bad idea from whatever way you look at it and should be stopped. To privatise them is to be incredibly short sighted, it is just an effort to downsize to save money. And just as it is in business world when companies downsize and then find themselves needing to expand to compete, they spend more money doing so than they saved by downsizing because they’re paying someone else who needs to make money.

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3 responses

10 11 2011
theurbanworrier

err, Null, nice rhetoric but you’ve missed a point here. the evidence of the private-sector delivery of public services is that it is neither more efficient nor more effective.
Railtrack? Big success. PFI hospital deals? Only surviving because our hands have been tied. School academies? the early ones required *shitloads* of public money and yet could only raise performance marginally (largely through cherry picking students). So far, though, it’s mostly been the ‘back end’ of public services that are privatised. School meals. boo hiss. Prison meals/security- who cares. The evidence is there that it’ll cost more to deliver less, but we’re blindly walking into wide-scale privatisation of public service delivery -NOT because it’s ‘more efficient’ or ‘cost effective’ (etc)- BUT JUST because the mates of politicians (of all persuasions) are the ones who’ll get the director’s paycheques and shareholder dividends.

11 11 2011
NullFuture

Umm, that was exactly my point. My experience in the prison service (and it’s entire prisons, not services related to) is that privatisation = profits to be made = worse service for the same money, or even less money. All in all it’s a bad deal for everyone except those making money from it. Yes I’m cynical but I always look at what’s in it for those who want it that bad.

It’s fun watching the information come in about the companies who get the contracts now, seeing who has the strange link to various interested parties. My point isn’t about these people getting the contracts by whatever means they can, bad though that is, my point is that these contracts should never be offered out in the first place.

11 11 2011
Rachael Black

I’ll throw in my two cents:
EVERY time the US government has de-regulated (ie lifted all government restrictions) pries to the consumer have shot through the roof. From telephone service to the airline industry (thanks to Reagan no one can afford to fly anywhere and we’re down to maybe 3 major airline carriers from 25 in the early-mid 1970’s. Same with phone and now Internet service.
I’m certainly not anti-capitalism (ran a business for many years) but with NO federal oversight the average American cannot afford to take advantage of most services. Don’t start me on our utter lack of medical care…

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