Feature

It’s the same old song

The report from the IPPR’s ‘Commission on Public-Private Partnerships’ avoids the language of the market – but however you look at it, the objective of private health care providers is profit, argues Sally Ruane

Building Better Partnerships, published last June, marks a significant step in the move towards the privatisation of key public services in the UK.¹ It is the final report of the Commission on Public-Private Partnerships (CPPP), established two years ago by the Institute for Public Policy Research (IPPR), an influential Blairite think-tank.

The authors believe that public services – welfare services plus other state services such as prisons and transport – are in a critical period. Sustained popular support for public services, they argue, will depend on significant improvements in service quality, made possible only through a radical programme of reform. If drastic steps are not taken there is a danger of a resurgent right convincing the public that all but wholesale privatisation is the way ahead.

The report argues that public-private partnerships are central to reform. These ‘partnerships’ will transform the character of services such as education and health by bringing commercial companies and voluntary organisations into mainstream service delivery and planning.

The report considers that rational discussion of PPPs has been hindered by their technically complex character, a limited evidence base, and outdated ‘ideological baggage’. It applauds the attempts of the Labour government to sweep away this ideological baggage, but aims to go further by providing a strategic account and clear philosophical rationale which can help bridge the ‘gap between rhetoric and implementation’, identifying when PPPs should be used and what the partners stand to gain. Its recommendations include opening up every area of health care planning and delivery to private companies (see box ).

‘A PPP is a risk-sharing relationship between the public and private sectors based upon a shared aspiration to bring about a desired public policy outcome,’ the authors state. This definition does not imply that partners enjoy either high trust or unity of interests; shared aspiration is ensured through shared risk, achieved through contractual incentives or penalties linking payment to performance or through threat to reputation.

Despite the report’s best efforts, it remains unclear to me as to how precisely this differs from a contract (albeit a longer term one) entered into by a private sector body principally for reasons of profit. In fact, the report’s authors do not acknowledge that the cynicism regarding the term ‘partnership’ is not confined to the public sector.

At the outset the authors lay to rest the notion that the founding principles of the NHS require health care to be provided by state employees on a not-for-profit basis. On the contrary, they insist, these principles do not specify a particular structure, process or mode of delivery. Instead, it is essential to distinguish goals from means. If the goal of accountable, efficient, high-quality health care for all can be achieved through (part) commercial provision, then there can be no objection in principle to commercial provision. A ‘level playing field’ and accommodating public sector culture are the prerequisites.

The way forward in health care, suggests the report, is to pilot new approaches in the use of partnerships. There should be an extension of private sector involvement in planning and developing the physical infrastructure of the NHS in primary, acute and intermediate sectors. PPPs may be used to ‘offer greater coordination of services’, such as payroll, administration, facilities management – cleaning, catering, maintenance and so on – and IT.

Private and voluntary organisations could be invited to bid for the provision of health and community services on a ‘best value’ basis, with the obligation to reassess existing models of delivery. The private and voluntary sectors, already widely involved in the provision of residential and domiciliary services, could be drawn further into planning services. Contracts should be longer term. In secondary care, the link between private involvement and a reconfiguration of health care is taken further through the suggestion that partnerships be used in new diagnostic and treatment centres, and new regional pathology centres. All providing organisations regardless of sector would work to achieve the health improvement outcomes established in local health improvement programmes.

The report acknowledges multiple failures of the private finance initiative in health: marginal – at best – value for money; little or no innovation; astonishingly high set-up costs (running into millions of pounds per project); and so forth. Intriguingly, however, the authors conclude that these failings arise from the limitations placed on PFI and advocate an extension of PFI parameters and not its swift demise, as one might expect.

Similarly, the reader is asked to dismiss concerns that private sector involvement in catering, cleaning and other ancillary services led to massive job losses and a pronounced deterioration in standards. We are asked to trust that partnerships on a best-value basis will overcome such problems.

This raises the broader question of how evidence is weighted. The problems and failings of PPPs are consistently downplayed. For an account that emphasises evidence above ideology, there are comparatively few references to empirical evidence. It frequently makes sweeping assertions without giving the reader the evidence used. Innumerable relevant publications are absent from the reference list, which is heavily dominated by official publications (with a very generous sprinkling of pieces by the commissioners and the IPPR).

The report seeks to establish an equivalence of value between the statutory and non-statutory sectors: both public and private agencies can succeed and fail; both can produce good and poor quality; both can evade public accountability. In establishing this equivalence, the authors imply that outright opposition cannot be sustained by the reasonable observer and that they themselves are even-handed.

The report does not challenge the funding of welfare services through taxation. By reaffirming the principle of universal entitlement funded through general taxation, the commission is able both to focus its inquisitorial and intellectual energies on the arguments and evidence surrounding provision and to wriggle out of charges that is attempts to make more palatable to public and politician alike the radical recommendations that go with privatisation.

However, this ignores the dynamic of policy-making which this report is both a product of and an active contributor to. Policies help shift the context – the political, cultural, ideological and technical environment – in which subsequent policies are made possible. The CPPP report itself is possible only because of the distance already travelled in policy terms through 18 years of Conservative government and four years of new Labour’s so-called modernisation.

Similarly, it is naïve to argue that taking further steps towards commercial involvement through service delivery will not open up the political and ideological scope for greater commercialisation of funding. Indeed, the private medical insurance industry is already knocking on the door, asserting that the report is inconsistent in tackling pluralism of provision.

A fascinating aspect of the report is the use of language to persuade the reader. It asserts that outright opposition to PPPs flies in the face of established experience; that the UK is not an ‘island of public sector purity’; and that private sector involvement has worked well in other countries. The language of the market is avoided: instead of markets, contracts and competition, we have partnerships, diversity and contestability, yet the difference seems more of degree than kind.

The report protests vehemently against the idea that partnerships might be described as privatisation, since public agencies continue to purchase services and the state continues to fund them for all through taxation. However, privatisation is best conceptualised as the introduction of profit-driven production where goods and services were previously produced on a not-for-profit basis.

On this understanding, the report clearly advocates widespread privatisation which should be recognised as a clear political and ideological stance. Although the report locates itself in the centre-left, it does not acknowledge its indebtedness to the ideas and initiatives of Margaret Thatcher, on whose watch the notion of the state as principally an enabling or purchasing agency was introduced.

There are two curious omissions. One is a discussion of the ideological persuasions and material interests of the commissioners and corporate sponsors, which is relevant in a report that claims to be evidence-based and rational. The former bring together big business and government; the latter (Serco, Nomura, Norwich Union, General Healthcare Group and KPMG) all stand to gain materially were the policies advocated to be implemented.² Perhaps this explains the second omission. Nowhere does the report explore why a generously funded – and therefore adequately staffed – welfare state producing welfare services on a not-for-profit basis is neither desirable nor feasible.

This publication does the left a service by revealing the range and quality of arguments that may be used in the battle over the future of our welfare services and the role, if any, of the private sector. It draws attention to the need to revisit and restate arguments for public provision. The report makes a strong attempt to persuade the reader that public provision of services is not necessary for maintaining quality, efficiency or equity. On the contrary, it argues, diversity and contestability are essential to improving quality.

It even goes so far as to claim that there is no clear evidence to suggest that the ethos of private and public sectors differs markedly. By examining a number of arguments surrounding the superiority of one sector’s provisions over another’s, the report throws down the gauntlet to the left who are now challenged to respond with a powerful case for wholly public funding and provision.