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Following detailed evidence of Private Finance Initiative equity profiteering and the transfer of assets to tax havens submitted by Dexter Whitfield, the House of Commons Public Accounts Committee has recommended gain sharing in new and existing PFI projects (1 September 2011). The Committee called for the Treasury to measure tax revenue from PFI deals and ensure this is taken into account in project assessments. It recommended Freedom of Information be extended to private companies delivering public services. An earlier report by the House of Commons Treasury Committee (August 2011) also included the PFI profits evidence, and was highly critical of the cost of PFI, off-balance sheeting financing and value for money assessments.

PAC report and evidence:
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1201/1201.pdf

Treasury Committee: Vol. 1: Report and Minutes
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146.pdf

Vol. 2 Additional Written Evidence
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146vw.pdf

This 2004 report by the Centre for Public Services has been reprinted in a new book, ‘Social Services’, by Li Bing, PH.D. Vice Professor, the Department of Sociology, Beijing Administrative College. The Chinese version can be downloaded (the English version in our publications section). The report examines the implementation of the previous government’s modernisation agenda for public sector reform and gives a voice to social care professionals at the frontline of service delivery and modernisation. It gives their impressions of how the key aspects of the government’s agenda were being implemented on the ground and shows how it undermined service quality and the welfare state.

Microsoft Word Document 社会服务现代化.doc

Dexter Whitfield has received the 2011 Social Policy Association Award for Outstanding Contribution from a Non-Academic. The award “celebrates his work in campaigning, research and advocacy for fairer UK state services over 40 years and, in particular, his defence of welfare services against privatisation and marketisation”. Accepting the award, Dexter Whitfield commented “I have always believed in the importance of a methodology that combines action research, strategy development, alternative policies and trade union and community organising. The need for this four-part methodology is greater than ever given the economic and financial crisis and the planned transformation of public services and the welfare state.”

The Social Policy Association promotes the study of social policy and advances the role of social policy research within policy making, practice and wider public debates. The majority of the Association’s members are teachers and researchers in social policy and applied social science within UK higher education, complemented by a significant and growing number of members from other European, Asian and Australasian countries.

The vast profits being made by contractors and banks selling equity in PFI project companies was exposed by the BBC File on 4 programme on 13 June. The programme was based on The £10bn Sale of Shares in PPP Companies: New source of profits for builders and banks, and earlier evidence in Global Auction of Public Assets by Dexter Whitfield. BBC Podcast: PFI Profits File on 4, 14 June 2011 – 38 mins  BBC Press Release: HM Treasury ‘in dark’ over ‘excessive’ PFI profits

Financial Times, 20 June 2011: PFI projects switched to tax havens, report claims

Daily Mail, 15 June 2011: £2bn secret profits on PFI gravy train: Public-sector projects are massive money spinner

Daily Telegraph, 15 June 2011: £2bn profit for companies selling debt on public projects

Tax Justice Network, 15 June 2011: BBC explains tax scam in UK’s Private Finance Initiative

Left Foot Forward, 15 June 2011: Democratic erosion, profiteering and tax havens: PFI equity sales exposed by Dexter Whitfield.

Open Democracy, 22 June 2011: PFI transferring billions from UK taxpayers to private financiers

An article in Local Government Chronicle, 9 June 2011, by Dexter Whitfield, describes commissioning as a wolf in sheep’s clothing because it will lead to private monopoly, commercialised services, agendas dominated by the vested interests of private contractors and little transparency. Sets out an alternative approach.

The London Borough of Barnet plans to transfer Adult Services to a Local Authority Trading Company (LATC) together with Barnet Homes, the Arms Length Management Organisation managing the council housing stock. About 160 Adult Services staff will transfer to the LATC. The LATC model is intended to commercialise Barnet’s provision of learning disability and physical and sensory impairment services for adults. The business case refers to ‘profits’ and the Council using its power as shareholder to demand annual ‘dividends’. Rather than subsidising important social and housing services, these services will in future subsidise other Council services!

A short video of a BBC Southwest programme about Southwest One, Somerset County Council’s strategic service-delivery partnership with IBM where only £3.3m of the promised £200m savings have been achieved since 2007. Includes revealing interview with Leader of the Council about renegotiating the contract. (Takes a few seconds to get on to piece and for sound to cut in).

Examines the recent Cross Border Healthcare Directive, the role of the European Court of Justice and the ‘Europeanisation of Healthcare’. The introduction of EU law into healthcare presents many problems. The most pressing being that EU institutions have sought to apply the ‘economic’ rights enshrined in the EU Treaty’s free movement law to national healthcare systems, like Britain’s NHS, that are essentially ‘social’ in purpose and aims. Expanding the ‘choices’ of users and providers of cross-border European healthcare is a further indulgence of the choice agenda that we’ve seen in Britain. This will only serve to further undermine social healthcare provision in the UK and the rest of Europe.

The Briefings will examine the impact of EU liberalisation and competition policy on the provision of public services in Britain. No 1 – European Union Competition Policy and the Liberalisation of Postal Services and No 2 – The Impact of European Union Competition Policy on Public Transport Policy and Provision in the UK, both by Andy Morton. See Publications: ESSU Reports and Briefings for summary and downloads.

Following various reviews the County Council has decided to renegotiate the public private partnership contract with IBM and Mouchel just three years into the ten-year £400m contract. The Council wishes to bring some services and functions back in-house, change the governance of the JVC, achieve further savings and simplify the contract. The Council considered terminating the contract but this was ruled out because of early termination financial penalties and significant transition costs. The contracts with Taunton Deane DC and Avon and Somerset Police Authority are not affected by this decision.