“Take back control” of the public services: expropriate the profit sharks!

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Workers' Fight workplace bulletin editorials
14 February 2018

Who will be next, after the collapse of outsourcing giant Carillion?  Capita, Interserve or Serco?  Kier, Balfour Beatty or Mitie?  Or even G4S, the largest of them all? All these professional subcontractors, outsourcers and "Public Finance Initiative" beneficiaries, who've been parasitising public funds for almost 4 decades, are in huge hock to their lenders.
    The fall in the pound’s value linked to Brexit and the rise in interest rates, has eaten into the value of their contracts, causing their share prices to fall, and credit to dry up. Capita has made several profit warnings.  Interserve is waiting for its banks to agree to extend loans and Balfour Beatty, Britain's "largest construction firm", has issued 7 profit warnings in the space of 2½ years.  Ironically, these "construction companies" seldom construct anything. As one explained: “all we really do is pre-sell labour and make bets on the long-term costs”.
    But if others go bust, how many more workers will be left high and dry?  Over 300,000 are employed in Britain by these 8 giant companies (and more by their subcontractors).  What will happen to their jobs and pensions?
    And what will it mean for the 700 public sector contracts which they operate? The thousands of schools, housing estates, hospitals, care homes, etc., where they provide meals, maintenance and other services?
    It seems that after all these years of outsourcing public services to private companies this whole giant structure is threatening to fall, like a house of cards.  And the blame lies squarely with successive governments, both Tory and Labour who imposed this policy against the interests of the public sector workers whose jobs and expertise was thus lost, not to mention the interests of the population.

Capitalist leeches

By now, all these giant service companies are in some sort of financial trouble.  And yet, during all these years, how many hundreds of billions did they manage to syphon from public funds?
    From Thatcher to Blair and May, governments handed out new sources of profits to a decrepit capitalist class which was unable and unwilling to “risk” long-term investment in building new productive industries.  They gave them a license to parasitise the formerly huge public sector: first through direct privatisation (the utilities which were sold off) and then via piecemeal outsourcing of service provision and infrastructure projects.
    Government ministers claimed that public services needed the “skills and competence of the private sector”, because they were inefficient.  But if that was so, it was because of chronic underfunding.
    Today one can safely say that the private sector has shown “skill and expertise” only in its ability to fleece public budgets to maximise profits.  Many of today’s giant service/infrastructure companies, sprang out of nothing, building up their public contract empires on borrowed money, which the banks were happy to lend them, because of the flow of public money they expected for decades to come. And they made huge profits by reducing services to the bare bone and cutting workers’ wages and conditions.
    But then came the crisis and austerity.  There were fewer contracts and less funding to share out.  The giant contractors’ profits were eroded.  As long as they could borrow money, they were able to keep going.  But it could not last.  Now the chickens are coming home to roost, starting with Carillion.

Unaffordable parasitism

None of this came out the blue, though: under capitalism the increasing wealth of the capitalist minority can only feed on the increasing poverty of the working class majority.
    The objective of the politicians’ privatisation project was always to allow the capitalists to increase their parasitism on the state.  But, with the crisis and its decade-long bailout, they have been trying to squeeze more out of “their” state than it could actually offer and, eventually, something had to give.  And now the banks are no longer willing to lend them the funds they need to continue operating.
    Of course, these outsourcing companies are victims of their own greed.  Their further collapse would be nothing to regret.  But the working class cannot afford to pay for the consequences.
    The politicians may enjoy aggravating the present chaos with their grandiose Brexit delusions and all their talk about “taking back control”.  But it is only the working class which can end the capitalist parasitism which undermines society, decimating services, social conditions and livelihoods.  And it can only do so, if it has its own political party, capable of uniting our huge potential fighting force under its banner.  This is what we need to prepare for.