What’s the alternative?

DEXTER WHITFIELD looks at the alternatives to neoliberal policies, and calls for city-wide alliances and coalitions of opposition

An alternative modernisation strategy needs to have key themes. It should restate public service principles and values, which should be embedded in all policies, programmes and projects. It should emphasise democratic accountability and transparency, and seek to revitalise and empower local government. Strategic policy making and service provision should be integrated and commissioning or outsourcing abolished. Equality, social justice and sustainable development should be mainstream. And employment should be high quality so there’s a more skilled and better trained workforce with good quality pensions.

Pictured: Dexter Whitield’s book on public services

But developing an alternative modernisation strategy must go hand-in-hand with vigorous intervention in the debate about the future role of the local state.

Four principles
The ODPM, now the Department for Communities and Local Government, launched a 10-year vision for local government in 2004 based on four principles of modernisation – choice in public services, putting people at the heart of public services, putting principles into practice, and leading from the front line.

New Labour’s vision for the future of local government is focused on commissioning, choice, contestability and competition. This means that local authority functions will include brokering, partnering, promoting, reconciling, strategic marketing and regulating. Outsourcing and transferring services and functions to arms length companies and contractors will be commonplace. Because the role of the local state has been reduced and weakened there is less capacity to directly provide services.

The Lyons Inquiry into Local Government, due to report in December 2006, has been extended to consider the role and functions of local government as well as funding. The inquiry’s Interim Report suggested that the role of local government should include building and shaping local identity, representing the community, regulating harmful and disruptive behaviours, maintaining the cohesiveness of the community, helping to resolve disagreements, working to make the local economy more successful, understanding local needs and preferences, providing the right services, and working with other bodies.

This is a narrow view of the role and function of local government. There is no reference to equality and social justice, planning and regeneration, public health, sustainable development and the environment, nor to its role in assessing the impact of economic and social change.
These ‘visions’ use slightly different words but they have common cause. They never use the words ‘provide’ or ‘in-house’ and are underpinned by an acceptance of neoliberalism and all its ideological manifestation in market forces. They simply do not accept that there is an alternative to marketisation and privatisation.

The government is currently undertaking a ‘fundamental review of the balance and pattern of public expenditure, taking stock of what investments and reforms have delivered to date, and identifying what further steps are needed to meet the challenges and opportunities of the decade ahead’ as part of its second Comprehensive Spending Review 2007. This will also set departmental spending plans and priorities for the 2008/09 to 2010/11 period.

The review will include ‘an ambitious and far-reaching value for money programme’ plus ‘a more strategic approach to asset management and investment decisions’.

It is no coincidence that the role and functions of the local state are being reviewed and significantly reduced. A local state with limited responsibilities will have less capacity and ability to plan and provide services, or to intervene to regulate markets. It will simply become a poodle, aiding and abetting the further marketisation and privatisation of public services.

An alternative strategy must therefore encompass:
• the role of the state and its precise functions and responsibilities
• powers to intervene in markets and the local economy to make community well-being and sustainable development a reality rather than rhetoric
• democratic accountability, devolution and transparency
• local resources and taxation, and the freedom to borrow for investment
• a public investment strategy for infrastructure
• capacity building in the public interest.

An alternative modernisation strategy which did not confront these developments would be inadequate.

Action strategies
Sustained and organised opposition to marketisation and privatisation must initially come from alliances and coalitions of local trade union and community organisations. Most local government organisations which opposed similar Tory policies in the 1990s are now embedded in the Blairite agenda.

Opposition and the development of alternative policies could centre on six key tasks.
Build political support: There is widespread dissatisfaction and disagreement with new Labour’s modernisation strategy and this must be built upon by challenging, exposing and critiquing the impact of marketisation and privatisation policies.

Mobilise against specific policies and projects: Campaigns such as those against academies and Defend Council Housing provide good examples of how local opposition can be built to challenge specific projects and expose the lack of public support for them.

Organising coalitions and alliances: Building coalitions and alliances between trade unions, community and civil society organisations is a key part of an alternative modernisation strategy. More broad-based movements for economic and social justice beyond the workplace and workers’ rights will be essential. Trade unions have a vital role in organising, representing, bargaining, educating, training, and monitoring in an era of increasing insecurity.

Intervene in areas of the modernisation process, such as procurement: Intervening in the planning and procurement processes can be successful, for example, several PFI and Strategic Service-delivery Partnerships (SSPs) have been stopped before contracts were awarded. Others have succeeded in excluding services and/or adopting secondment rather than staff transfers.

Promote alternative policies: The alternative to choice and market forces is the provision of good quality local services which embrace flexibility and diversity in which a wider range of options and services can be provided to meet people’s needs and aspirations. Slogans such as public good/private bad are irrelevant. Clear, comprehensive alternative policies and strategies must form the base of all organising and action.

Action against liberalisation policies: Opposition should be maintained against the European Union Services Directive and the World Trade Organisation’s General Agreement for Trade in Services. These liberalisation proposals will extend marketisation and outsourcing to a wider range of public services.

Twin track failures
The trade union twin-track strategy against PFI/PPP projects provides some important lessons. It consisted of national and local campaigning to expose the high financial, employment and democratic costs, combined with local negotiations to secure the best possible deal for members on individual projects. This strategy failed to achieve any significant changes in PFI because it failed to organise and mobilise opposition. The PFI/PPP twin track strategy did achieve certain things, however, namely:
• national and local publicity about refinancing, cost increases and delays were always widely reported which helped to maintain opposition
• added political pressure on the National Audit Office and Public Accounts Committee to investigate projects
• PFI was stopped for ICT projects – media pressure exposed cost overruns, delays and service failures but it could be argued that private ICT firms should take the credit for ICT projects being excluded from the PFI programme
• publicity about the high costs of PFI, in particular transaction costs, meant that a minimum project value of £20m was imposed
• recognition that in-house and DSO services could supply and support services in PFI projects
• the introduction of the Best Value Code of Practice on Workforce Matters to prevent a two-tier workforce and the government statement that value for money in PFI/PPP projects must not be obtained at the expense of terms and conditions.

However, while these successes are important, they must be considered in the overall context of a strategy which has failed:
• to achieve any significant amendments or changes in the PFI/PPP process, as most changes have come as a result of government policy initiatives and private sector lobbying
• to reduce the size, scope or depth of the programme
• to stop the development of new PFI models such as NHS LIFT and Building Schools for the Future which embed the private sector within public bodies
• to prevent refinancing and the development of a secondary market
• to win the case for public investment – only 11 health projects have been publicly funded in contrast to over 123 PFI schemes.

Opposition to SSPs has been more successful as several local authorities have opted to transform services themselves, two contracts have been terminated and a third has been substantially reduced.
But the restructuring of the local state could make such intervention more difficult. A weakened and disempowered local state would make local mediation less likely between competing interests. It could lead to more direct confrontation between staff, trade unions and service users, and private or voluntary sector providers of services.

Dexter Whitfield is from the European Services Strategy Unit, Sustainable Cities Research Institute, Northumbria University