Swire’s choice for PM : wants all schools and NHS run by private companies for profit

Should one be judged by the company one keeps?

“Tory leadership hopeful Dominic Raab has been described as more rightwing than Margaret Thatcher over his proposal to let state schools be run by profit-making companies

Raab, who is second favourite in the race to be the next prime minister, made the case for privately run state schools in 2013 and again in 2014, saying the government should open up the education system for companies to make money.

The idea is one of a number of rightwing proposals put forward by Raab in pamphlets over the years. The former Brexit secretary has also suggested encouraging more private companies into the NHS by giving them tax breaks or paying them premiums, and scrapping the 45% top rate of income tax, instead having a basic rate at 15% and a higher rate at 35%.

Asked whether Rabb still endorsed the idea of letting companies run state schools, his spokesman did not rule out the proposal, saying: “Dominic has set out his priorities to fight for a fairer Britain – a fairer deal for workers by cutting taxes for those on low and middle incomes, a fairer society by boosting apprenticeships and getting a fairer deal from Brussels.”

In his 2013 paper Capitalism for the Little Guy, Raab suggested the government should “lift the bar on profit-making companies running academies and free schools”, subject to a minimum of 50% of profits being reinvested into the school. At present academies and free schools cannot be run for profit.

Raab wrote that opening up schools to profit-making companies could help to raise capital investment for education at a time when funding from central government was under pressure, arguing that such a move would help raise standards.

He acknowledged there was an “understandable sensitivity of introducing the profit motive into schooling”, suggesting that as well as the 50% profit limit on, dividends should only be paid if educational performance standards were met and that there should be a bar on the sale for commercial gain of school assets purchased with public money. …”

https://www.theguardian.com/politics/2019/may/29/dominic-raab-more-rightwing-on-education-than-thatcher-tory-private-sector-state-schools-profit?

The Greater Exeter “mini-village” – quality or quantity?

A correspondent, on seeing the post a couple of days ago about a new “mini-village” in Exeter:

https://eastdevonwatch.org/2019/05/28/design-for-new-mini-village-in-exeter/

has deja-vu as it appears to mimic another time and (local)place! Owl is still wondering if this was a late April Fool prank …!

“Why councils are bringing millions of pounds worth of services back in-house”

“Chris Morgan got a job as an electrician repairing council houses in Stoke-on-Trent just over five years ago. Although he enjoyed his job, Morgan, 36, says he did not always feel he could raise issues with his line manager. “Our supervisors weren’t always in the trade we were in,” he says. The city council had outsourced its housing repairs service to Kier group in 2008. But since the council brought the work in-house last year, Morgan says he feels happier. “I know my supervisor knows what I’m on about. It makes me more confident,” he says. “We have had extra talks, health and safety training. They have put in a new canteen and showers, so the facilities are better too.” And with a £1,000 pay rise, plus an extra £500 for doing asbestos work, Morgan is also a bit better off.

Now all repairs, maintenance and home improvements to the council’s housing stock, as well as public building maintenance, are in-house.

A report by the Association for Public Service Excellence (APSE) published today, shows that Stoke is far from unusual, with 77% of UK councils planning to bring services back in-house this year. And the report calculates that between 2016 and 2018, at least 220 local government contracts have been brought back into council control.

Labour ‘will ban’ outsourcing of public services to private firms.

Outsourcing began under Margaret Thatcher with compulsory competitive tendering back in the 1980s and was embraced wholeheartely by New Labour. Now attitudes seem to be hardening against contracting out. “What we are seeing is a 40-year experiment in public service delivery being put under the microscope,” says Tom Sasse, a senior researcher at the Institute for Government.

The Labour party has pledged that under a Labour government all frontline services would be provided by the public sector, from railways to social care. Even the Conservative government has been forced to look again at outsourcing, renationalising probation services after outsourcing them disastrously failed. And in the NHS, the cervical cancer screening programme for England will be brought back into the health service later this year, after Capita failed to send more than 40,000 women screening invitations and reminder letters to have a smear test.

“A catalogue of failure has shown that private providers have struggled to generate profit and deliver services of the standards that the community expects,” says Paul Evans, director of NHS Support Federation.

“The rise in insourcing shows that commissioners are being forced to recognise this. Not all contracts display problems, but experience now shows that the risk is high.’

For many public sector bodies, bringing services back in-house is increasingly a pragmatic way to cut costs and improve quality. “On its own, it is not an absolute panacea, but there are significant advantages to bringing services back in-house,” says John Tizard, a former Capita executive and now a strategic adviser on public services.

According to today’s report, 78% of local authorities believe insourcing gives them more flexibility, two-thirds say it also saves money, and more than half say it has improved the quality of the service while simplifying how it is managed.

“Insourcing allows councils to regain control over local services,” says Mo Baines, head of communication and coordination at APSE and author of the APSE report. “Fragmented service delivery through outsourced contracts has failed to deliver on price and quality. It is no longer a viable option.”

Sasse adds: “In the 1980s, there were typically 20% cost savings by outsourcing services like waste collection, but those efficiencies have now been made.”

Steven Griggs, professor of public policy at the local governance research centre at De Montfort University, says: “In the context of austerity, insourcing offers reductions in management costs that can be used to fund frontline services. If you are locked into long-term contracts, then inevitably cuts will fall on remaining services.”

Some councils have opted to insource because the provider walked away from the contract. In Scotland, Highlands council brought cleaning public lavatories back in-house in 2017 after the provider said it wished to terminate the contract because it was no longer commercially viable without increasing the contract value by just under £450,000: a 31% increase.

Griggs says councils are also finding other benefits. “Insourcing builds in-house capacity, facilitates the joining up of services, shores up financial flexibility, keeps the public pound in the local economy and provides opportunities to work with small- and medium-sized businesses to strengthen local supply chains.”

And in some cases it can generate much needed revenue.

In Stoke, the council created a wholly owned trading company, Unitas, to allow the housing repair team to bid for other contracts and generate profits. As housing revenue grant is ringfenced, any surpluses or profits made by the council have to be spent within that budget. But by creating the trading company, any profits could go back to the council’s general fund.

“Last year we returned £4.6m to the council and provided an improved service,” says Steve Wilson, operations director of Unitas. The company has won contracts worth £2m to refurbish civic and other local buildings. It is also hoping to bid for maintenance work with other housing providers. “Rather than line shareholders’ pockets, this approach has generated income for the council, improved customer service and staff morale,” says Carl Brazier, director of housing and customer services at Stoke city council. …

In Cheshire, Halton borough council has saved £750,000 a year by bringing its three leisure centres back in-house, while Nottingham has saved £500,000 annually by insourcing maintenance of its civic buildings and cut the cost of staff catering by 17% by bringing it back in-house.

One of the biggest insourcing programmes has been in the London borough of Islington. Following its 2011 fairness commission, the council has brought back about £380m of services, helping to improve the pay and conditions of 1,200 frontline staff and generating net savings of about £14m for the council. Services brought back in-house include building cleaning; housing repairs and maintenance; waste and recycling; grounds maintenance; and temporary accommodation.

Today’s report argues that the economic case for insourcing means all councils should consider it. “In an age of austerity, councils can no longer afford outsourcing failures. Most can deliver quality services at a better price and without sacrificing the workforce on the altar of the lowest bidder.”

https://www.theguardian.com/society/2019/may/29/bringing-services-back-in-house-is-good-councils?

“English councils warned about use of reserve cash”

Somerset, which oversees funds being spent by our Local Enterprise Partnership, is one of the councils mentioned in this BBC article.

“Some councils in England have been warned they risk running out of cash reserves if recent spending continues.

Analysis by the BBC has identified 11 authorities the Chartered Institute of Public Finance and Accountancy (Cipfa) said would have “fully exhausted” reserves within four years unless they topped them up.

The Local Government Association said councils faced “systemic underfunding”.

The government said councils were responsible for managing their funds.
Councils have faced cuts to their government funding and rising demand for services such as social care, while MPs have warned children’s services are at “breaking point”.

Cash reserves – money held back for specific projects or emergencies, such as flooding – are seen as a measure of financial security.

Between them the 152 major councils in England had £14bn in reserve in March 2018, £500m more than the year before but £400m less than in 2015.

The BBC analysis of government data follows work by Cipfa, which published a “resilience” index of councils, but stopped short of naming those it warned were depleting reserves the fastest.

The warning was based on the latest data available, comparing reserves as of March 2018 with March 2015.

The analysis reveals which 11 of the 152 major English councils have used so much of their reserves since 2015 that Cipfa said they would run out within four years if spending patterns continued.

The research comes ahead of Wednesday’s Panorama, which reveals the failings of the social care system as the population gets older and more people need help with day to day living. …”

https://www.bbc.co.uk/news/uk-england-48280272

“Kensington Council Made £129m From Selling Property That Could Have Prevented Cost-Cutting At Grenfell”

“Kensington and Chelsea council made £129m from selling property in the years leading up to the Grenfell fire tragedy – money which we can show for the first time could have prevented cost-cutting on the tower’s renovation works.

An investigation by HuffPost UK, the Bureau of Investigative Journalism and the BBC Local Democracy Reporting Service can reveal the property deals overseen by senior officers and the council’s cabinet in the run up to the Grenfell disaster.

Evidence shows one of these deals was directly linked to the financing of the Grenfell Tower renovation and our investigation reveals that the council had far greater power over its funding of the works than it has previously admitted.

The council has previously claimed legal restrictions meant it could only use rental income from local authority housing to pay for renovation works. But this was not the case.

In fact, the council’s own documents show £6m of the Grenfell works was paid for with proceeds from the sale of council property – basement units in Elm Park Gardens in Chelsea.

The government has confirmed to us that councils are free to use money from the sale of property to fund improvements in housing stock.

This new information means the council had a far larger pot of money available to invest in its council housing than it has previously acknowledged – including on Grenfell Tower.

Our investigation also found the council had £37m in the bank, specifically from the sale of property, at the time when funding decisions over Grenfell were being taken.

But in 2014, cuts were made to the budget for building work by the tenant management organisation that was managing the project, including saving £300,000 by using cheaper, more combustible cladding.

The cladding was a key contributor to the speed with which the fire tore through the building on June 14, 2017, killing 72 people and leaving hundreds of families homeless.

The revelations have prompted fury over why spending on the Grenfell works was tight when the council had a significant income stream that could have been used to increase the budget. …”

https://www.huffingtonpost.co.uk/entry/kensington-chelsea-council-property-sales-grenfell_uk_5ced6003e4b0bbe6e3342f04?utm_hp_ref=uk-homepage&guccounter=1