5 reasons why privatisation is bad for you

[borders]

5 Reasons Why Privatisation Is Bad For You
1. Your costs go up
You pay more, both as a taxpayer and directly when you pay for public services. Value for money goes down because private companies must make a profit for their shareholders and they also pay their top executives more money. This means either we the people, or the government, or both, end up paying more than they did before. Fares on our privatised railways and buses are the most expensive in Europe, while people are also being hit with high energy prices.

2. Your services get worse
Private companies do not have a social purpose, their legal priority is making a profit for shareholders, not putting people first. This means they may end up cutting corners, or underinvesting in our services. They have a duty to make as much money as they can. Water companies ignore leaks instead of investing in infrastructure, while private company involvement in the NHS has been bad for patients. Private companies also have 'commercially sensitive' contracts, so they don't share information with others; this makes it harder for them to work in partnership to provide an integrated service.

3. You can't hold private companies accountable
If the local council runs a service, you know where to go to complain. But if a private company runs a service, they are not democratically accountable to you. That makes it harder for you to have a voice. Academy schools are less accountable to parents. Atos, the welfare provider, tried to silence disability campaigners instead of responding to their concerns.

4. Staff are undermined
If you work in public services, privatisation will make your life harder. A Europe-wide study found that privatisation has had ‘largely negative effects on employment and working conditions’. There are often job cuts and qualified staff are replaced with casual workers, who are paid less and have worse conditions. This has a knock-on effect on the service being provided – for example, in the cases of care workers or court interpreters.

5. It's difficult to reverse
Once our public services are privatised, it's often difficult for us to get them back. Not only that, we lose the pool of knowledge, skills and experience that public sector workers have acquired over many years. We also lose integration across different services (private companies often don't share information because it's 'commercially confidential').

But wait!
Aren’t private companies supposed to be better than the public sector? Doesn’t competition reduce costs and improve quality and customer care? No, because there is often very little competition; public services tend to be natural monopolies so there isn't much choice for consumers. Instead, government (local or national) asks private companies to bid for contracts running our services - but there's no real opportunity for our voices to be heard

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[borders]

Royal Mail privatisation: Government selling the family silver
Yesterday’s papers were full of stories that Royal Mail are planning to cut its workforce by a quarter – yet another massive reduction in staff in one of our key public services.

With this Tory- led government driving through plans to sell off the company, it is clear that the proposed scale of job losses is the result of a government that wants to see our postal service downgraded and privatised – no matter the effects on the service.

With a bill paving the way for the privatisation of Royal Mail set to receive royal assent in the coming weeks, these fresh stories of job cuts show that Moya Greene and the Royal Mail management are coming under intense political pressure to slim the company down to make it attractive to a buyer to aid the government’s privatisation agenda – not for the benefit of the public.

Political meddling with the operational side of Royal Mail could be disastrous for our mail service. While privatisation may be a win for a government hell bent on selling off the family silver, we all lose if Royal Mail isn’t fit for purpose.

Providing an essential public service, Royal Mail is Britain’s second largest employer and has already made huge cuts to its workforce as part of a modernisation process. These number 60,000 since 2002 and reductions continue as part of a business transformation plan agreed in 2009.

The universal service obligation – the raison d’etre of Royal Mail – is to deliver to every UK address six days a week but extreme cuts to staff will mean it won’t be able to function in the way it has done for a century and more.

These new stories of job losses to attract investors come at a very difficult time for our postal service. Many elements of the Postal Services Bill constitute a very real threat to the level of service the public and many businesses have come to rely upon and pose grave risks of price hikes, service deterioration and post office closures.

Scaremongering about job losses -to entice potential buyers, no matter the effects on the workforce – is a very callous way to bring about a sell off but is indicative of the way this government is going about privatising a service that so many people rely upon.

Jack Dromey MP (Labour, Birmingham Erdington) is the shadow minister for communities and local government

[borders]

evidence on where our money goes and what happens after privatisation

WATER
In the UK, every day 3.4 billion litres of water leaks from the system; leaks have been reduced by only 5% over the past 13 years but shareholders were paid £1.5 billion in 2010-11 (Ofwat data obtained by the Guardian). The privatised water industry is not more efficient, and it tends to mean higher prices for consumers and/or underinvestment. (Water Privatisation, Public Services International Research Unit, April 2008).

BUSES
The Competition Commission says there is a lack of competition in the bus market, which means lower quality services and higher fares. Between 1980 and 2010, bus and coach fares increased by 54% in real terms (buses were deregulated in 1985). Bus companies also focus on making a profit from the busiest routes, so local authorities have to pay them to provide the ‘socially necessary’ services that don’t make money.

CARE WORKERS
Care workers employed by private companies generally have worse terms and conditions than those employed by councils. This undermines staff morale and makes it harder to provide proper levels of care to vulnerable people.

Private care workers receive lower average pay - some of them are paid less than the minimum wage. They are more likely to be on a 'zero hours' contract where they are not guaranteed any work. They are much less likely to be paid for travel time between visits.

They are often given crammed working schedules, forcing them to rush between appointments. Visits of only 15 minutes mean care workers must choose between leaving clients in an unsatisfactory condition or staying on, unpaid, in their own time.

Private care companies are not a cheap option - shareholder profits, private company executive salaries and procurement costs all reduce the public funding available for care contracts.

“ I was so much happier working for social services. I felt that clients got a better service”

“ I enjoy my job very much but the private companies are making you feel like you don’t want to do the job anymore”

SCHOOLS
Parents and communities have less representation in academy schools, there is a ‘secrecy culture’ and private sponsors have more control. The experience of US Charter Schools suggests that this could result in ‘corporate takeover’ of education. (Academy Schools: case unproven, Catalyst and Public World, 2006)

[UnhappyGremlin]

I get the impression borders thinks privatisation will be bad for us. Wonder where he gets that idea...

Privatisation means only one thing, they are responsible only to shareholders, and will stop at nothing to increase RM's profitability. Cause that's the column that matters.

Jobs will go, pay will be cut, prices will rise, and the service will be at an all time low in next to no time. But will they care? No. As long as there is a profit to give to the fatcats. Oh, and big bonuses for senior management. But not us. At least, not us that manage to remain employed.

[fishtank]

Our "people costs" are around £5.5 Billion.
If you can reduce that by 10% without hurting revenue you make £550 million in savings,add that to normal operating profits and you're well on the way to making the magic Billion in profits..
When you have such high people costs against revenue(60%+) it's an open invitation to a slash and burn merchant.

Make no mistake our jobs,terms and conditions are the bait that will tempt the sharks.
It has very little to do with how efficient we are at delivering the mail.

[Edward Hunter]

oh well if the company is making a billion pounds a year maybe our shares will counter act the drop in basic pay after privatisation

[TrueBlueTerrier]