The tide is turning against public service privatisation | Richard Vize

The rebellion against privatisation is growing, with the tide moving towards greater public control of key services.

The pushback can be seen everywhere. In an excoriating assessment of a flagship government policy, the chief inspector of probation, Dame Glenys Stacey, has used her final annual report to condemn the part privatisation of the probation service for a “deplorable diminution of the probation profession”.

The fatal mistake was to try to reduce what is a complex social service to a series of contractually defined transactions. Stacey makes clear that the government’s recovery plan – to terminate contracts early and retender – is largely a waste of time, because it will not fix the underlying problem that running probation commercially won’t work.

NHS England has abandoned a bizarre scheme to force cancer patients at the renowned Churchill hospital in Oxford to be loaded into an ambulance and driven four miles down the road to use private sector scanners rather than be scanned on site by NHS staff.

The retreat came as Jeremy Corbyn joined the backlash and Labour revealed plans to ban private companies from providing services that deal with vulnerable people. NHS England has already used its long-term plan to call for legislation to repeal automatic tendering in the health service. Water, energy companies and the railways are in the sights of the renationalisation lobby. Outsourcing companies are collapsing.

Now Lord Jim O’Neill – an authority on the policy implications of antimicrobial resistance – has massively escalated the debate about public control of vital services by arguing that a state-run pharmaceutical company may be the only answer to the private sector’s failure to invest sufficiently in new antibiotics. There have been no new classes of antibiotics since the 1980s, and only three firms are believed to be in the game.

The Association of the British Pharmaceutical Industry responded by saying how many billions its members were investing in research, failing to address the central point that however much or little they are spending, it is clearly not working.

The stakes could hardly be higher. While hundreds of thousands of people can be the collateral damage for a dysfunctional benefit system or failed probation service, the rise of antimicrobial resistance poses a catastrophic threat to us all, and is already compromising treatments for illnesses such as pneumonia, bloodstream infections and gonorrhoea.

Confronted by private sector lassitude in response to this impending disaster, the balance of risks and potential benefits is clear. Government needs to intervene decisively. The question is how.

Merely nationalising a pharmaceutical company is no more likely to deliver a solution to antimicrobial resistance than privatising a public service is going to make it more effective. Simplistic solutions to complex questions don’t work, no matter who is carrying the placard.

O’Neill admits he is unsure what a publicly owned or led pharmaceutical operation would look like or how it should be incentivised to deliver. One idea he has floated would be to run a pharmaceutical company as a public utility.

But despite the formidable practical difficulties it justifies some serious planning. Assuming it happened under a Labour government, one of the biggest challenges would be to avoid getting bogged down in issues – such as worker representation on boards or getting squeamish about paying big salaries to key staff – and to focus relentlessly on the goal of developing antibiotics.

Labour’s current leadership is facing the same problems that Tony Blair and Gordon Brown were confronting as they watched the Conservative party crumble in the 1990s – how to create the conditions for progressive, productive, affordable public services. Simply reversing Tory policies will not be enough.

While Labour is keen on the Preston model for reinvigorating local services, it will have to be far more creative if it is to start dabbling in high-tech industries. But with private sector pharma companies unwilling to commit the resources on anything like the required scale to tackle antimicrobial resistance, there is an opportunity for a bold, imaginative alternative.

Richard Vize is a public policy commentator and analyst


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