Corporate Culture, Public Service and Democracy

Are governments fundamentally law makers using their legislative powers to shape the country’s social structures and balance the competing needs of the people or managers of an economy which is powered by the engine of entrepreneurship? That difference is very important to the delivery of public services and has been at the heart of the change from the Attlee government creation of the NHS and the Welfare State to our modern system of public management. But is this form of management the effective system it claims to be or has it compromised democracy and accountability as the corporate sector has been enabled by the changes to move closer to the decision-making centres of government?

The cumulative direction of policy decisions since the late 1970’s has created a substantial shift in the governance and management of the state sector. Instead of headlining the need for an expanded health and education sector to meet the growing needs of the population, for example, electoral and manifesto commitments have focused on the need for ‘economic discipline’ and ideas of consumerism and efficiency leading to lower deficits and debts. In our current times that translates directly into plans to shrink the state to fit notional macro-economic demands rather than to address the real needs of the population.

Key elements of this managerial state include the creation of autonomous agencies and devolving budgets and financial control. It has also involved the creation of ‘market competition’ in services which are monopoly or monopsony providers like the NHS and competition in the provision of the services themselves e.g. treating the private and public sectors as businesses on an equal footing and allowing them to bid for public contracts rather than planning their delivery through purely public systems.  This has meant not only an increasing emphasis on performance, outputs and customer orientation rather than population needs, but a rise of the management consultant as a necessary adjunct of government. Dealing with the private sector on large scale and complex tenders is not a skill of the public sector civil service. But to fulfill this function US consultancies such as McKinsey and Bain are used and they serve two clients: government and global corporations.

This matters because all governments for the last 40 years have followed this pattern and it compromises those who may wish to challenge the status quo. When Jeremy Corbyn faced Theresa May across the dispatch box in the first Prime minister’s questions after the general election, he should have owned the debate. In the back and forth that took place on the subject of the tragic loss of life of Grenfell Tower the question of accountability was inevitably raised.

Jeremy Corbyn set out his case along lines which attacked current government policy: 40% cuts to local authorities’ budgets, cuts and a pay cap strangling public sector jobs that have led to 11,000 fewer fire fighters which have disastrous consequences for us all. In short, as Corbyn summed up, ‘What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity.’ He went further to make demands on new regulations and the provision of resources to ensure that people are safe in their own homes.

There can be no disagreement that changes need to be made and a serious review of the legislation around fire safety is essential as a matter of priority.

But instead of attempting to defend her government’s agenda, Theresa May turned to her Right Honorable Friend and, with her characteristic smirk, informed him, the house and the country that the changes to legislation that removed the requirement to inspect a building on fire safety from the local fire authority – usually the fire brigade – to a responsible person were made by a Labour government; by Blair’s government.

12 years ago, Barroness Andrews, who presented the new legislation for Regulatory Reform (Fire Safety) Order 2005, announced the changes, ‘Business and government have agreed that that the law needed to be streamlined.’ She goes on to say, ‘[The Act] will, for example, remove the requirement for some businesses to obtain a fire certificate from the local fire and rescue authority.’ The laws that took effect in 2006 ended the practice of routine fire service inspections and passed responsibility to local councils. But it is in her assurance that business and government have agreed that we should look more closely.

It is this point, as Theresa May so carefully pointed out, that has been developing for decades and under governments of all colours – namely the outsourcing of public services to the private sector and the deregulation for the benefit of business and at the cost of accountability for the rest of us.

Perhaps most important of all is the ensuing democratic deficit. For all of Jeremy Corbyn’s impassioned demands for justice and for redress, he was ultimately unable to bring the government to account. Theresa May side-stepped any acknowledgment of guilt by passing the responsibility straight back across parliament. In fact, she left her political side-swipe til last thus ensuring that Jeremy Corbyn did not have the opportunity to respond. Such is the political game-playing of Prime Minister’s Questions. But what would he have said if he could have responded? There is no defense for his own party’s role in the degrading of the public sector.

New Labour made an art of blurring the lines between private and public ownership. It was Blair who introduced Academies into our Education system against the advice of many teachers’ unions who believed amongst other fears that the system would increase inequalities. They were shown to be right when the Academy Commission published its damning report in 2013. The report asserts that ‘all publicly funded schools should be placed within a common administrative and legal framework’, which sounds remarkably like a suggestion to return to the original publicly provided Education system.

Despite a growing body of evidence that Academies undermine equality and do not necessarily improve results for children, the policy has been accelerated. Lord Harris, a Conservative peer, has been handed acres of inner-city London land on which to build an ever-increasing number of his own brand of primary and secondary schools (41 at present) – none of which have to follow the national curriculum and all of which are built on land that was once publicly owned. Despite the evidence-based research that has concluded that the system is flawed and is unsustainable, the Conservative government appropriated Blair’s infatuation with privatising the public sector and pledged to convert all schools to Academies. But the chief architect of these policies under Labour was Lord Adonis who has just admitted to the catastrophic failure of tuition fees (another ‘politically diseased’ Labour policy).

It was Blair and Brown who were responsible for the expansion of rotten PFI deals which has diverted £billions of public sector revenues into the private sector. It was their introduction of the internal market that opened the door for global healthcare corporations stepping into our ‘national health service’ which is now wide open to the global marketplace as a result of the Coalition’s Health & Social Care Act.

Businesses have always stalked the halls of Westminster, not only as lobbyists but as advisors. McKinsey have advised governments on both sides of the Atlantic since the 1920’s. Harold Wilson’s government believed in the modernizing influence of such consultancies. His then Trade Minister Tony Benn, beloved Left-winger with national treasure status close to the adoration received by Corbyn today, welcomed McKinsey and Conservative Keith Joseph used them to help re-design the NHS in 1972, leading to McKinsey giving evidence to the Royal Commission at the end of the 70’s advising that the NHS was broken and that charges should be brought in. Fortunately at that stage their advice was not acted on.

New Labour’s era ushered management consultancies and business men right in to the heart of government and the writing of legislation. McKinsey wrote the Health and Social Care Act 2012 that has denationalised the NHS.

Price Waterhouse Coopers proudly claim to bethe leading advisor to the government and public sector’. But as the Public Accounts Committee said of PwC in 2015 they were responsible for ‘mass marketing tax avoidance schemes’ and their report (the second such in a matter of months) highlights the conflict between being advisor to two client groups with such competing interests. The PAC further said,

“The fact that PwC’s promotion of these schemes is permitted by its own code of conduct is clear evidence that Government needs to take a more active role in regulating the tax industry, as it evidently cannot be trusted to regulate itself. In particular, HM Revenue & Customs needs to do more to challenge the nature of the advice being given by accountancy firms to their clients, ensure that tax liabilities reflect the substance of where companies conduct their business, and introduce a new code of conduct for all tax advisers. Unless HMRC takes urgent action, this irresponsible activity will go unchecked, causing harm to both the public finances and the reputations of the companies involved.”

In such a role they cannot be other than an inappropriate influence on the public sector. Where profit is the primary force (as is necessarily the case in business) the values and social purpose of education, prison services, health can only come second.

After generations of private influence over public sector decisions, it will come as little surprise that the CEO of the cladding company who provided the flammable and toxic cladding to KCTMO, the tenant management organization for Grenfell Tower, is on the Building Regulations Advisory Committee (BRAC). Mark Allen is listed as Technical Director Saint-Gobain Delegation UK and Ireland on parliament’s website. The committee itself has been criticised by fire safety experts for being “heavily weighted towards the building industry” and has proved “difficult to engage with”

The reality is just as Theresa May said, both colours of government are responsible for the outsourcing of our public services to the private sector. It has been with cross-party agreement that red tape has been cut meaning a degrading of health and safety laws that are designed to prevent avoidable catastrophes such as the devastating fire at Grenfell.

As George Monbiot revealed, even while the fire at Grenfell blazed an organization called the Red Tape Initiative, chaired by Conservative MP Oliver Letwin, met to discuss ‘whether rules determining the fire resistance of cladding materials should be removed for the sake of construction industry profits.’ This initiative is a government-backed organization that includes several members from the neoliberal privately financed think tank Policy Exchange and it is largely dominated by industry alongside some representatives from NGOs and Trade Unions.

The Red Tape Initiative on the front page of its website states that, ‘Brexit presents many challenges for Britain and its businesses. But it also provides us with an opportunity to cut some of the bureaucracy that has impeded business and made lives more difficult. The Red Tape Initiative (RTI) will identify the most important, least controversial opportunities for cutting red tape in a post-Brexit world.’ Yet another example of business replacing genuine experts in the shaping of policy. In this case a self-serving group tearing up the fire safety standards in order to improve profits for industry.

At the end of the day until Corbyn starts talking about the damage, the cost, the degradation caused by the ushering in of the corporate sector into national and local government decision-making the change he promises will remain out of reach. Until we have a government that truly values the integrity of public services we will not be able to even start to restore the vital protections that a true public sector ensures. And until our public services are made public again there can be no democratic accountability. At the dispatch box on 28 June the dead of Grenfell Tower were nothing but a pawn in a political game of cat and mouse. The work of the opposition must include a clear program of creating a modern public sector within a cradle of public ownership, provision and accountability. The elephant in the room of direct corporate influence in Westminster and Whitehall cannot be avoided.

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