Posts Tagged ‘Private Contractors’

Bremner, Bird and Fortune on

February 29, 2016

The satirists Rory Bremner and the ‘Long Johns’ Bird and Fortune have a section in their book, You Are Here (London: Phoenix 2004) attacking Tony Blair’s part-privatisation of the London Underground. They point out that while in opposition, Blair had loudly opposed privatisation. Once in power, he was most enthusiastically for it, and the London Underground was one of those businesses slated to be given over to private investment under the PFI initiative. They write

After the abolition of the Greater London Council (GLC) in 1986, the London Underground could no longer be funded out of the local rates paid by all London households. Ever since then, the Underground has only had two sources of revenue: central government grants and passenger fares. Government grants to upgrade infrastructure have declined from £398 million in 1994/5 to £160 million in 1998/9. This has resulted in fare increases of double the rate of inflation over the last decade, making London’s Tube system the most expensive in Europe.

The government believed this could be solved by the part-privatization of the Underground. it projected that a PPP will make possible £7.5 – 15 billion of new investment, but the only indication of where this investment will come from is a prediction that passenger numbers will increase by 40 per cent over the next fifteen years. But how can such an increased number of passengers be accommodated without an immediate investment programme?

The Tube system spans 400 kilometres of track, 275 stations, and twelve different lines, and there is also the complex issue of who will be responsible for shared lines or interchange stations. The legal documents dealing with it are said to fill fourteen filing cabinets.

Admittedly, this may not interest people outside London, particularly as with the present system it’s very unlikely they’ll manage to the get there in the first place.

It’s the same system that was so signally successful with the railways: London Underground runs the trains; the private contractors run the infrastructure; and any problems, the lawyers will sort out. (Giving new meaning to the warning ‘Mind the gap’.) No wonder the carriages are full – it’s all the lawyers and accountants desperate to get in on the act.

It’s those privatized public services again. The people who put the Enron into electricity, the Railtrack into railway, and the Edexcel into education … Whatever happened to ‘three strikes and you’re out’?

The government love to call anyone who disagrees with them either a wrecker or a cynic. You don’t have to be either to recognize that separating the running of the trains from the maintenance of the track is exactly where the last privatization went wrong. To add insult to injury, one of the new consortiums includes the company responsible for the maintenance at Hatfield. That’s the trouble with these private consortiums. If you try to do away with them they just go underground.

Let’s go over the points:

Under privatization it costs three times as much for each mile of track. On top of all the subcontracting and regulation you’ve got to build in about 30 per cent profit for the private company. And they’ll still get it if the service is 5 per cent worse than it is now. (pp. 162-3). (My emphasis).

They then go on to describe how massively profitable all this is for the firms involved, their accountants and lawyers.

So the PFI deal is massively cumbersome, and even then was set to deliver even worse service. Just like the privatisation of the railways. Now, Blair massively expanded the PFI system, but it was Maggie and John Major that started the ball rolling with their privatisations in the 1980s and ’90s. And the part-privatisation of London Underground was based on the railway privatisation carried out by John Major’s government. A policy that resulted in a series of disasters, including one at Hatfield, resulting in hundreds of deaths and years of litigation as the various rail companies passed the buck between them. And this privatisation policy is being rabidly pursued in the NHS by Cameron.

It should be scrapped immediately. As indeed should the government behind it. And the Blairites should be removed from anywhere near power in the Labour party. Corbyn is absolutely right to champion the nationalisation of the utility services. Anyone who tells you otherwise is just arguing for more rubbish service for the profit of the big corporations.

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