In a small borough in the north-west of England, an experiment is about to take place that could have profound consequences across the wider nation. As we report today, Bury Council's plans for the privatisation of local services are revolutionary in their scope. Every service provided by the council – from libraries, to youth groups, to social work, to rubbish collection – is to be put up for sale. Any private company, charity or third-sector group that wants to be able to bid for a public contract will be allowed to do so. Bury council wants to transform itself from being a provider of local services into a hands-off commissioner.
The council claims that its financial predicament leaves it with no alternative to this sweeping programme of privatisation. And there is no doubt that the local authority needs to find considerable savings, some £32.4m over five years, as a result of the drastic reduction in its grant from Whitehall. But those savings are by no means out of line with the savings being forced on many other councils. The suspicion is that Bury's Conservative-controlled council is not embarking on this reform because it must, but because it wants to.
And it has powerful friends. The Thatcherite wing of the Tory party has long been obsessed with privatisation. There will be many in the party watching closely what happens in Bury, with a view to implementing a similar programme elsewhere.
Advocates of privatisation regard the policy as a panacea that increases efficiency and delivers better value for money for taxpayers. But this is not always the case. If there are no quick profits to be made, the private sector is often loath to bid for contracts. And Bury council is likely to find that the charity sector lacks the capacity to take on new public contracts.
Efficiency is in the eye of the beholder. What might look like a success on the balance sheet of a private company or a council's budget can mean worse services in a community. Providers can put profit before the public good. In the context of council services, that could mean less time spent by social workers with elderly or mentally ill people. It could mean less frequent bin collections, or fewer youth groups.
Greater efficiency could also mean higher charges for the public. One proposal in Bury is to charge groups of Cubs and Brownies to pay to use the local park. Such moves might be efficient, but that efficiency comes at a price. And the cost is usually borne by those least likely to make a fuss.
There are other reasons for concern. Privatisation with proper funding is one thing, but reform on the cheap is a false economy. The previous Conservative government privatised the railways in the early 1990s in the expectation that this would improve services and reduce the burden on the taxpayer. But Britain has ended up with a second-rate rail service and an even larger public subsidy than in the days of British Rail.
Privatisation tends to work when it is accompanied by proper regulation and oversight. But all too often such scrutiny is lacking because privatisation turns out to be a way for politicians to wash their hands of services that they never had much interest in providing in the first place.
But the greatest objection to the Bury experiment is consent. There is no democratic mandate in the borough for this programme of wholesale privatisation. The council has rushed through the plan with a consultation period of just three weeks. Bury council and the Coalition are convinced of the merits of their privatising agenda. What neither is convinced of, though, is public support. This is a revolution that the British people are going to have to like or lump.Reuse content