I’m old enough to remember Sid. I’m also old enough to wonder why anyone with half a brain would argue that the private sector is more efficient than the public sector.
From the article itself:
If Sid had been a Thames employee, chances are he would long ago have been laid off: its headcount has fallen by two-thirds.
Doing the same work with one third of the labour is being more efficient, isn’t it?
A few years ago I worked on a small project with Thames Water, so I learned a couple of things. A fair part of that drop in head count came from outsourcing. Much of the cash savings came from replacing secure & well-pensioned employees with insecure contractors.
In my book that’s fine: It channels the Left’s energies towards arguing for decent pensions & job security for all of us, not just the select few in quasi-government jobs. But naturally it sticks in the Guardianistas’ collective craw.
“I’m also old enough to wonder why anyone with half a brain would argue that the private sector is more efficient than the public sector.”
Ah, the reflexive Guardianista reaction to unwelcome reality – you must be stupid or evil to believe this reality, therefore it does not exist.
Or there’s another possibility – he has a different, Orwellian definition of the word ‘efficient’.
I’m also old enough to wonder why anyone with half a brain would argue that the private sector is more efficient than the public sector.
What the fuck has being old enough got to do with it? What’s Aditya Chakraborty’s experience that tells him that one is better than the other? He’s worked where? The BBC and The Guardian (but I repeat myself). And everyone knows that the Graun is basically living like the public sector and going down the plughole, while the beeb survives by threats of violence.
It’s interesting when you ever put public and private suppliers head-to-head. Not many places you can do this now, but private hire of buses is one. And when I last did it a decade ago, the private company were cheaper.
Wasn’t Sid used to sell British Gas?
Watch the headcount at the BBC drop when they loose their licence fee. I recon it will be more than a third. I open the betting with a prediction that the BBC will shed at least 80% of their managers.
I can’t see that comment in Chakrabotty’s article.
There’s a fun piece by Owen Jones though where he argues that teaching British values through the study of British history in British schools is dangerous and perverted:
The Daily Mail declared that Ralph Miliband was the “man who hated Britain” because he was a Marxist who opposed institutions such as the monarchy, the Church of England and the army. Not deferring to the status quo, in its view, is not just un-British, but anti-British.
Indeed, Owen. A foreigner who hates Britain and its traditions of private property, the rule of law, and liberal democracy is not only un-British, but anti-British.
I think Jones makes an important point though. The values of the majority are not the values of the nation as a whole. He admiringly cites the usual radical potpourri of dissenters, from the Peasants’ Revolt to the Levellers to the LGBTQWERTY movement.
I’d add to that list: the Puritans; the Jacobites; the British Union of Fascists; and the Paedophile Information Exchange also had radical agendas that contradicted British cultural norms.
Jones is quite right to say that “The values and interests of Britons have always been pitted against each other”. Just as a flipped coin rarely lands on its side, in the zero sum world of political and cultural struggles for dominance it usually comes down to a choice between heads or tails.
For that reason, we must crush the Left, see them driven before us, and hear the lamentation of their women (of both sexes).
Picking up on Andrew’s point, not only the likes of Thames Water but most borough councils have had to lay off thousands of staff but use consultants at £500-700 per day. Yes you read that right. It’s a complete scam and in no way more efficient than having staff on £40k per year.
Don’t forget that that £40k per annum is the employee’s salary. Now add on to that employers job tax, pension contributions, probably some health insurance cover, maybe a car, and all the other packaged benefits. Now consider how hard it is to get rid of an established employee should the need arise.
Spending £500-700 per day on a contractor suddenly starts to make much more financial sense. That is the whole amount – the contractor has to pay his own income tax and both sets of job tax, his own health insurance and pension contributions, and provide his own car.
And when the project for which the contractor has been hired comes to an end, then most likely the contractor is shown the door without needing a large payoff. The efficiency saving here is allowing the employer to maintain a sensible headcount for the current workload.
And yes, I am a contractor – but in IT not public sector administration.
Cripes the land of easy answers.
There are no easy answers, the left /right, private, public argument – is wasted breath.
Don’t make the mistake that the corporate water companies are doing it for your benefit, the shareholders always come first. Cutting unit costs, outsourcing and contracting, fantastic but at what real cost?
Evidently, the water companies are monopolies, have a client base they can milk and don’t ever really have to properly service and renew infrastructure let alone build more storage capacity – you know – reservoirs – for a burgeoning population, mmm great are the benefits of mass immigration and birthrate explosion.
But then, it never was a clear playing field, post privatization, water company bosses cleaned up if you’ll scuse the pun, land sold off, profits pocketed and nothing like easy money to grease the wheels. Laws changed, so that any repairs on your property, even outside on the street, the owner is usually liable.
Yessiree! they cleaned up all right and then sold the equity to foreign holders with little or no idea of the overseeing of British water utilities.
EU water purification diktats didn’t help, billions ‘invested’ to purify to standards non of our EU cousins have to maintain – typically Brussels – just more totally useless legislation.
So when the pipes go this winter and you have to wait an age for the repair service to get into gear, queuing for the bowser – just think how wonderful is privatization, not necessarily is the grass greener.
Utilities, should be run on a non profit basis for mutual benefit of consumer and workforce, the less interference from government the better and most definitely – keep the corporates sticky fingers out of utilities.
“Utilities, should be run on a non profit basis for mutual benefit of consumer and workforce”
And here’s your first problem – the two are mutually exclusive.
As for less interference from government while keeping corporates out – just who is going to legislate this utopia for you then? It’s going to require an awful lot of government interference to make it happen.
“Utilities, should be run on a non profit basis for mutual benefit of consumer
and workforce, the less interference from government the better and most definitely – keep the corporates sticky fingers out of utilities”
That looks a bit better.
Thing is that running things that require high investment with long pay-back periods on a non-profit basis doesn’t really work very well. Makes it sort of difficult to attract investments you see…
Benefitting the workforce is jobs, for life, at decent rates of pay and decent pay rises. Preferrably with little actual work.
Benefitting the consumer is a quick, efficient and most of all cheap service where problems are quickly resolved with little inconvenience or mess.
Yes, two pretty mutually exclusive aims.
“Don’t make the mistake that the corporate water companies are doing it for your benefit, the shareholders always come first”
Well, duh, as they say. The whole point of free markets is that they harness the self interest of the business owner to make as much money as possible to work in the interest of the consumer getting the good or service at the cheapest possible price and/or best quality as well.
And if you want an example of how large state owned organisations end up when they are run ‘with the workforce in mind’ just go and experience your local NHS trust – thats a very good example of something that is run for the benefit of the employees, any healthcare that gets done is entirely coincidental to the main aim of providing pay and pensions to over 1 million people.
I would rather have to deal with the most intransigent and annoyingly inefficient private sector company (hello BT and my bank!) than have to deal with a public sector monopoly ‘service provider’. The former will just be trying to rook me for as much money as possible, and I ultimately have the option (however difficult and annoying it is) of moving to another company for my needs. The latter will be equally (or possibly more) intransigent and inefficient, but for no other reason than sheer laziness, and often will treat you like sh*t and claim that its for your own benefit, not theirs.
Which is why socialism is so evil – it consists of people treating other people like sh*t and having the moral pretense that they are in fact doing it to help them. Which means that if anyone opposes the socialist’s actions they are actually opposing helping people and are morally evil and can be ‘dealt with’ by whatever means necessary. And always are, usually with a 9mm in the back of the neck.
Edward: ” Don’t make the mistake that the corporate water companies are doing it for your benefit” – I don’t think I’ve ever seen Tim make that mistake.
He might have a stronger belief than most in the power of the invisible hand, and that the pursuit of self-interest ultimately benefits society overall, but I’ve never seen him claim that companies seek a profit out of pure altruism.
I’m always suspicious of the clarion call “X should be run on a non profit basis for mutual benefit of consumer and workforce”. Such a beautiful clarion call. Yet it sounds equally as wonderful for any value of “X”. Shouldn’t agriculture be run on a non profit basis so that consumer and workforce benefit? Food is important so that sounds like a good idea. Actually so is the distribution and retail side of food, and that’s an industry with lots of low paid workers who need protecting, so let’s make supermarkets and convenience stores non profit too. The pootling business of travel would be cheaper and easier if car production and maintenance was non profit. Fuel also. I’m sitting in a room full of furniture and it would have saved me a pretty penny if the purchase price hadn’t partly gone to feed “sticky finger” business owners who wanted their cut from the proceeds. Even the phone I’m typing this on would be more fantastic if it were a non profit phone! (Telephony, so we were told, being an essential public service.)
So “non profit for great benefit of consumer and workforce” is a slogan so versatile it is essentially vacuous. Moreover it masks an internal tension – the interests of consumer and workforce are at least as much opposed as they are aligned. It’s not clear how, in a perfect world, their competing interests are to be arbitered. And there’s something entirely missing from the slogan – if you want to run a capital intensive business, where is that capital coming from? The point of providing a return to capital (profit) is to attract that investment in the first place. If you abolish return to capital then you need a new source of funding. That has associated costs, however the mechanism you propose might hide them, because capital doesn’t come free. Nothing with such immense opportunity costs possibly could.
The power of the slogan lies in its implicit image of a pie shared between a triangle of consumer, worker and capital. “If we abolish the profiteer,” say the worker and consumer to each other, “surely we can each have a bigger slice of the pie?” That thought is where the superficial attraction lies. And it really is superficial, since you can’t have a two sided triangle and can’t abolish capital. You can have a sensible debate about who stumps it up, how the fruits are reaped, and the flip side – where the risks fall. You just can’t do that by hustling capital offstage by sleight of word.
Completely off topic, but I just wanted to say
Not 100% convinced that privatisation of water or power companies has been the wonderful panacea that is sometimes claimed.
My own gut feeling that some sort of not-for-profit approach might yield better results.
However how any body could possibly claim that public sector is obviously more efficient than private (implication being across all sectors) is pretty breathtaking – the truy tragic thing is that similar opinions are widespread in government, the civil service, certain sections of the press and small, hopelessly deluded sections of the public.
The privatisation of what became BT wasn’t just an ideological move and I’ve heard Keith Joseph say it wasn’t ideological at the time, it was driven by the need to find £m100s to upgrade the network to System X, money they didn’t have at the time. After years of Government taking whatever profits it could to spend on pet projects rather than re-investment all the Strowger exchanges were on their last legs with very few spares available. It had got to the point that routine maintenance was stopped because it was causing more problems than it caused.
The more modern crossbar exchanges were slightly better of but they were quickly running out of capacity and who wanted to invest in analogue exchanges anyway?
The water industry was in a similar position but by then the privatisation was ideologically driven, which doesn’t mean it was a bad thing.
Nibs / Bloke in Wales,
I meant entire work packages being outsourced to another company, not individual roles.
What Bloke in Wales says is entirely correct.
The presence of £x-hundred-a-day contractors is not limited to government. There are plenty of them in private corporations too, and they’re very useful for projects of defined duration. As an analogy, if I’m selling my house and I need it professionally cleaned once, I’ll hire expensive short-term workers. But if I need my house cleaned every week, I’ll hire a long-term cheaper worker. It’s CapEx vs OpEx.
For government bodies, the usual situation is that the Treasury has given them a big wad of money to spend on achieving a particular outcome. The money is only there for a limited time and it has to be spent, otherwise it’ll be clawed back. The only way to achieve that is to hire short-term contractors.
I’m old enough to remember that we considered this country 3rd world when we came here for language exchanges from France.
I moved here in 1986, when things started to change and to pretend that it was “better” before is just demonstrating one’s stupidity.
That guardian commenter has not even got 1/2 a brain. Then again, he is a guardian commenter.
I take all your points, and all were well made in good spirit and really I am pragmatic, I have to be, I run a private business – as do most of my family and in varied trades and companies.
But in so far as water provision is concerned – where is the competition – nowhere that’s where – so how can the ‘market forces’ produce more “efficiency” and better value?
Gas, Electricity are cartels, all way round the consumer is stuffed.
I certainly do not advocate a workers paradise, all employees should be made to adhere to a rigorous code and be made to work hard……but is it not also true that, a happy and relatively contented workforce performs better?
I will add, the Hinchingbrooke trust in Cambridgeshire a privatization experiment, is more where I am going [thinking] for such as the [water] utilities.
Not for your water supply you don’t.
I was in favour of privatization, and saw it working well with outfits like British Steel that faced international competition. But, as Edward says, privatizing the utilities has just created cartels, each led by its so-called regulator.
I had occasion late last year to dig into the forced entry powers claimed by the gas companies to check meter safety. Turned out these powers were specified by OFGEM and aimed at catching meter bypassers, not checking for safety (and so these powers arguably breach the ECHR). So the cartel imposes costs on the entire customer base (waiting for the gas man) to avoid investing in fraud detection network monitoring.
Bottom line: I think we’ve seen that privatization of national monopolies doesn’t work and need to think of a new model.
I never thought I’d have to post this here, of all places.
That’s not my recollection, so I checked the report. The wording there is misleading, but if you look at the chart (7.5.1) it’s obvious that what it meant to say is that bills had gone up by 42% in real terms. It’s as if Tim just skimmed through the report to pick out bits which seemed to justify privatization.
How many times does it have to be typed out?. THE SYSTEM IN THIS COUNTRY IS CORPORATE SOCIALISM NOT A FREE MARKET.
Yes, gas/electric/water are govt enabled and supported cartels because that’s the way NuBluLabour and their “business” friends want it. And it is also made possible by all the leftists who love the fact that you increasingly need state permission to breathe never mind go into business. If you don’t like govt-backed cartels then don’t keep supporting the expansion of fucking govt power.
‘the water companies are monopolies, have a client base they can milk and don’t ever really have to properly service and renew infrastructure let alone build more storage capacity – you know – reservoirs –…’
The recent decision not to build more reservoirs in SE England was taken by the current government. Probably based on some EU water policy bollocks. Perhaps one of the most stupid decisions in the history of stupidity.
Eddy: Its green bullshit–start by NuLab and which Camoron and his gang still endorse. They want metered water rationed by price–so you don’t need any more of those nasty anti-environmental reserviors . And if the very poor can no longer afford to wash–well its time humans learned that the bad old days of fitting the natural environment to suit ourselves are over.
What Mr Ecks said.
A cartel created by the government is not a free market.
Nevertheless, this mantra that the service is worse than when it was public is pure baloney. It costs us £99 and 3months wait for a landline back in 1986. A job that was done in less than 2mins.
> Watch the headcount at the BBC drop when they loose their licence fee. I recon it will be more than a third.
Funny thing about the License Fee: both external studies (one was done by Sky, unsurprisingly) and the BBC’s own internal study have concluded that the BBC would make more money if it switched to a voluntary subscription — mainly because they’ve already got so much infrastructure in place they can afford to provide quite astounding value for money. (I think most of their output that isn’t from Bristol is shite, but the public apparently disagree.) So the BBC aren’t even clinging on to the License Fee because they fear for their future; they’re attached to the principle of forcing the public to pay for them under threat of prosecution. Nice.
It’s interesting to read Edward’s claim that the privatisation of water companies has led to their being run badly. Because I live in Northern Ireland, where the water company was not privatised. People tend to forget that it is actually possible to do a direct like-for-like comparison in the UK.
So, Thames built one hell of a new ring main circling London, allowing them to move water quickly from any part of the city to any other, which has vastly increased the efficiency of their supply and has led to a marked decrease in droughts and hosepipe bans in London. You just have to look at how often the Home Counties get hosepipe bans while London doesn’t. They have the same amount of rain.
For comparison, look at the utter fucking debacle we had over Winter in NI a couple of years back. A bit of ice, and some people were without water for weeks. People in cities, too, not just the middle of nowhere. It was shameful that such shoddy provision of something as basic as water should exist in a supposedly first-world country. But hey, at least no shareholders made any money out of it. That would have been bad.
> But, as Edward says, privatizing the utilities has just created cartels, each led by its so-called regulator. … I think we’ve seen that privatization of national monopolies doesn’t work and need to think of a new model.
You have a point with water, but that’s certainly not happened with gas and electricity, where you can switch to any provider no matter where you live, so they really do compete with each other.
> I had occasion late last year to dig into the forced entry powers claimed by the gas companies to check meter safety.
If you dug into it, then surely you know that no such powers are claimed by gas suppliers. The meters are the responsibility of National Grid, who are gas utility network providers, not gas suppliers, and who have forced entry powers because they have responsibility for safety.
> Turned out these powers were specified by OFGEM
That seems unlikely, since the powers predate the existence of OFGEM.
> aimed at catching meter bypassers, not checking for safety
But meter bypasses are obviously a safety risk, since they are, almost by definition, carried out by unqualified personnel. And, since such bypasses are completely illegal, how on Earth would you suggest detecting them if not by forced entry? Making an appointment for three weeks’ time to come and see if someone’s breaking the law? Maybe we could also catch drug dealers the same way.
British Gas, Scottish Power, etc, have nothing to do with forced entry beyond taking your details and giving you the standard warnings if you tell them you can smell gas and then passing your details on to the network providers.
> So the cartel imposes costs on the entire customer base (waiting for the gas man) to avoid investing in fraud detection network monitoring.
Nonsense. They may use the same powers to get into your house regardless of whether there’s a gas leak or a suspected crime, but they don’t use them in the same way. If you report a smell of gas, they’ll ask you to stick around till they arrive. If they suspect you of a crime, they will presumably not be coming to your house because you’ve called them to tell them what you’re up to, so they won’t tell you to wait in for them.
SQ2, re the big 6 gas suppliers
You’re Guardian reader, right?
Economics 101: being able to switch within a cartel is not competition. The big 6 don’t compete on service or (other than buggins turn) on price.
Forced entry powers
British Gas, Scottish Power, etc, have everything to do with forced entry. They do them every year (or try to). Law dates from 1950s, but overwritten by ECHR right to privacy. That says that busting into households on the off chance of finding criminality is a no-no; the state must have cause and follow due process. Exception is for safety (still with due process), but their inspection protocol does not test for, or certify safety.
Meter bypass detection
To repeat: suppliers can use network instrumentation (distributed flow meters feeding itsy-bitsy computers that match recorded to actual consumption). That’s very quick and so very safe, but instead OFGEM dumps an enormous time cost on its customers. Most visible if you’re a contractor and have to lose a day’s income for a faux safety inspection, but just as damaging when mother can’t pick up her kids from school.
Hope that’s clear.
> You’re Guardian reader, right?
Ha ha ha ha ha ha. Brilliant.
No, very much not, but I did use to work for British Gas Services and have seen this from the inside.
> The big 6 don’t compete on service or (other than buggins turn) on price.
Says you. When I worked for BGS, BGT’s service was fucking awful. Scottish Power competed with them quite successfully by the simple measure of not fucking up basic admin constantly. It was nice to have a gas supplier you didn’t need to call every fortnight and who, when you did call them, were able to tell their arses from their elbows. I spoke to customers on the phone every day who were being made completely miserable by BGT’s fuck-ups. A lot of them were only too glad to leave, especially for the cheaper firms. And thousands of them came back again when their new suppliers proved to be totally incompetent (how they managed to be more incompetent than BGT is beyond me, but hey). So, yes, they certainly do compete on service. Millions of people have compared them and found differences worth the hassle of switching for.
I live in NI now, where Firmus are competing with Phoenix quite effectively, on price and service.
> British Gas, Scottish Power, etc, have everything to do with forced entry. They do them every year (or try to). Law dates from 1950s
You are confused:
> Turned out these powers were specified by OFGEM
OFGEM did not exist in the 1950s.
In the 1950s, when the supply was nationalised, infrastructure and supply were handled by the same company, so any laws regarding either one applied to British Gas. When British Gas were privatised, the two services were divided. National Grid Transco inherited responsibility for safety and became the people who can force entry to your property (with a PC present) if they detect a gas leak within it. The gas suppliers simply do not do this.
They do, however, force entry over non-payment, which involves applying for a warrant and informing you, and can take months. Since they sell gas on credit, this strikes me as unremarkable.
You appear to be conflating the two quite separate issues of forcing entry for gas safety and forcing entry over non-payment.
Meanwhile Cameron turns himself practically inside out when a huge Chinese public-sector entity is ready to take over the Hinkley Point power station from a French public sector entity (EdF).It is only the cream of British management expertise who could not make a profit or break even with public sector provision when the Guv can rig the market in the public sector’s favour.
But the British management cannot run private sector entities either, even with rock bottom cheap interest rates.
We urgently need the public sector to re-locate to places with cheap land causing the building of cheap new houses, not just to end the housing crisis ,but to address the crisis of demand caused by laissez faire or market forces making everybody cram into the South East where they pay so much in rents and mortgages that they can’t afford to buy anything except cheap imports.
Oh for post-war British politics of the Macmillan era when the private sector and public sector complemented each other.