by René Lavanchy
UNISON, Britain’s biggest public sector union, has accused the Government of putting the public purse at “massive financial risk” by overseeing widespread outsourcing of public services to the private sector, in a report this week.
It warns that the Treasury is running up billions of pounds of liabilities because the Private Finance Initiative, which is used to deliver increasing amounts of public infrastructure, is heavily financed by debt.
And it points to the recruitment of former Government ministers such as Alan Milburn, David Blunkett and Ian McCartney as consultants and directors of private companies as being used to minimise opposition to private sector solutions.
The union’s general secretary Dave Prentis said: “This hard-hitting report shows that the Treasury is at risk of having tens of billions of pounds of liabilities heaped on it, because of the way public services are now delivered and funded.
“Much of the money used by the public services industry has been borrowed from the banks and, with borrowing costs rising, our schools and hospitals are being exposed
to the credit crunch and financial bad weather.”
The report is a response to DeAnne Julius’ review of the “public services industry”, which the Government published this year.
The review said that the private and voluntary sectors were “a major contribution to the provision of better value for money public services in the UK”.
But the Unison report quotes other studies which found that privately delivered services can be riskier and more expensive than the public sector alternative. It says that private sector funding drove up the price of the first 12 PFI hospitals by £60 million.
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