Observer editorial www.theguardian.com 

The economy will end the year on the brink of recession and it is not hard to see why. After 13 years of Conservative misrule that reached its nadir last year during Liz Truss’s brief tenure as prime minister, the country is crawling towards a light that flickers dimly. Even the so-called recovery since Truss’s calamitous mini-budget has proved a mirage. Official figures on Friday showed that the economy shrank in the summer, when previous estimates told a story of modest growth. The signs are already flashing red for a further contraction in the autumn and winter months.

If a technical recession – one that charts a decline in gross domestic product (GDP) across a six-month period – comes to pass, it will reveal that Rishi Sunak’s mix of income tax rises and public sector cuts have backfired, as many experts said they would, leaving the UK worse off in almost every way possible.

The average family has very little spare cash with which to pay bills and afford a celebration at Christmas. A government devoid of ideas has sapped the life out of the private sector in the same way that its dogmatic adherence to austerity has hobbled investments in much-needed public services. Companies are reluctant to invest in the UK after more than a decade of stop-start planning that accompanied one of the most disastrous economic decisions that parliament was in a position to make – leaving the EU’s single market and customs union. Neither the Bank of England nor the Office for Budget Responsibility, the Treasury’s independent forecaster, have changed their minds about the huge hit to the UK’s trade and investment from Brexit.

A recession won’t trigger the usual dramatic rise in unemployment or a major spike in company failures. It will feel more like a prolonged period of stagnation.

For some Tory backbench MPs a long period of zero growth may seem more palatable than maintaining alliances with our European trading partners, but the situation leaves Sunak’s administration with only meagre resources to tackle the great issues of the day.

In every direction the government turns, there is a neglected area of the public sector desperate for support from Whitehall. And these public services, which provide the backbone of the economy and, never let it be forgotten, allow private firms to operate, don’t just need cash. They need an administration that is prepared to rethink how those services might be provided in a digital world, with the added complication that digital advances exclude millions of people from the community of users. But this rethink cannot rely on yet more doses of privatisation, as we show has happened in the care sector, where analysis of official data by the Observer reveals a dramatic rise in the number of centres providing care for vulnerable children that are fully or partially controlled by investment companies.

We have a housing crisis that depends on private sector property developers building the homes Britain needs, when it is clear they will only drip feed properties into areas at a pace that maintains prices.

There is a shortage of dentists in large parts of the country following the almost total collapse of dentistry inside the NHS for anything other than the most dire emergencies. Hospitals remain hampered by strikes, while the health ministry conducts a war with junior doctors. US health firms are waiting in the wings to capitalise on the public’s growing distrust of health services provided by the state, as they did in the 1990s when John Major’s privatising government chipped away at the NHS.

A programme for new hospitals announced by Boris Johnson has gone the same way of so many Johnsonian promises, while school repairs, despite a succession of ministerial pledges, are delayed again and again. Local councils are going bust at an alarming rate as they confront the spiralling costs of adult and children’s services, many of which they are legally obliged to provide. It’s true that the first batch of councils to declare themselves technically bankrupt – Tory and Labour – had made investments that went sour, or, like Birmingham, embarked on costly legal action.

But for the many councils warning that they too are likely to declare themselves bust, the theme is solely about budgets knocked sideways by the impact of inflation and the rising number of people – children and adults – falling into the arms of council officers when there is nowhere else to turn.

Britain needs an activist state that takes on some of the heavy lifting in the search for ways to provide public services, and without simply pouring extra cash into tired old systems and processes, often dating back several decades.

This level of engagement is anathema to the current Tory party, as it is in other areas of public policy. The Tories cannot see any other solution than a private one, even when it is clear that the corporations hungry for deals with the state are interested only in short-term profits, and not the long-term health of the economy.

 South West Water has been urged to do more to protect Devon’s vulnerable rivers from sewage and pesticide spills.

Guy Henderson, local democracy reporter www.radioexe.co.uk

Officials from the company and the Environment Agency faced questions from South Hams Council’s overview and scrutiny committee over issues ranging from pollution and water quality to household water bills and nationalisation.

Council chairman Guy Pannell (Lib Dem, South Brent) said the number of discharges of untreated sewage into the River Avon at Diptford had risen to 119 in 2022 from 83 last year.

The Avon had been ‘named and shamed’ by the Wildlife Trusts as being among the country’s 20 rivers most at risk from human and farm sewage, pesticides and fertilisers.

”The Wildlife Trusts chief executive described it as a national disgrace,” said Cllr Pannell.

“I feel very ashamed that my beautiful river is being called a national disgrace.”

And Cllr Matt Steele (Lib Dem, Ivybridge East) said there had been only two days in the past two months when there had been no sewage ‘dumps’ into the River Erme.

“Residents are incensed by seeing sewage flowing through the centre of Ivybridge,” he said.

South West Water’s director of external liaison Alan Burrows told councillors: “No pollution is good pollution.” And he said the company had learned from previous cases.

Serious pollution incidents had fallen, he said, and SWW was aiming for zero by 2025.

Pollution from storm overflows was also reducing, he claimed, and the South Hams had good quality bathing waters.

Clarissa Newell, the Environment Agency’s area manager, said there had been a huge improvement in water quality in the last 20 years, and the district’s bathing waters were the best they had ever been.

“The South Hams is in a really good position for quality of water,” she said. 

Cllr Pannell asked what measures SWW was taking to address water shortages such as the one which caused a hosepipe ban last summer, and  if the company had plans for new reservoirs.

Mr Burrows said there were new resources such as a desalination plant and new water mains in Cornwall. Water from a new reservoir in Somerset could be pumped anywhere in the network. He also said households could be encouraged to use less water.

Cllr Pablo Munoz (Lib Dem, Ivybridge West) asked why, when SWW’s parent company Pennon was paying billions of pounds to shareholders, westcountry households paid the highest water bills in the country.

The company’s director of asset management Mark Worsfold said shareholders expected a return on their investment.

He went on: “If we didn’t give them their dividend, they wouldn’t give us their money, and we wouldn’t be able to fund our investment programmes. They would take their money and put it somewhere else where they would get a higher return.”

Councillors asked if the water industry should be nationalised again rather than being in private hands, but Mr Burrows pointed out that if that happened, it would have to compete for funding alongside education, the NHS, social housing and other government budgets.
 

Thinking about a possible job change next year. Simon has let us know that he will be packing in a bit of job experience today. 

Returning to his old roots?