Labour’s plan to demolish the public sector

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LABOUR’S Minister for Communities and Local Government, David Milliband, yesterday addressed the National Council of Voluntary Organisations (NCVO) Annual Conference called ‘Empowerment not abandonment’.

He started by laying down the standard New Labour smokescreen saying: ‘We face a critical choice as a country. We can build on progress over the last nine years through reform of government that empowers people through and with a diverse, independent and sustainable voluntary and community sector. Or we can recreate the problems of the past through an attack on the public sector that abandons people and reduces the voluntary sector to a charitable safety net. This is my argument.’

Since 1997 Labour has been ruthlessly privatising the public sector, including health and education, handing over billions to the independent (private) sector to create health and education markets. Milliband says ‘we’ must build on this progress by ‘empowering’ people ‘through’ a diverse private (independent) voluntary and community sector. This means he will be doing exactly what he states ‘we’ must not do – abandoning people, with a continuing attack on the public sector, while promoting private companies and charities to replace the public sector with a US-style ‘charitable safety net’.

He maintains that ‘central to this empowerment, this devolution of power to individuals and communities, is the role of the voluntary and community sector, working in partnership with the public sector.’ 

When he speaks about ‘independent’ he means private companies. When he talks about charities he means huge business organisations that employ many permanent staff and organise thousands of unpaid volunteers.

He boasts that ‘Thanks to tax changes, the UK now has one of the best tax regimes for charitable giving in the world. . . And with two-thirds of income generated by just two per cent of the sector, we must ensure opportunities for public service delivery are open to small and medium sized organisations as well as larger charities.’

This third sector is to have long term contracts. ‘When local authorities campaign, successfully and rightly, for three year funding allocations to support strategic thinking, local government must similarly offer longer term contracts to the private and voluntary sector providers.’

He envisages voluntary organisations tendering for major local government contracts, and advises ‘local government and its partners should look at how to avoid the problem of voluntary organisations having to manage multiple contracts from different parts of the public sector, each with different reporting arrangements and timescales.’

The third sector is to be given a very hefty leg up by the government. ‘National Government, through the dormant assets commission announced by the Chancellor in the Pre-Budget Report last year, will look to channel assets into the sector from dormant bank accounts.

‘In addition, as I set out last year, we must look at the potential to apply the Scottish model of a Community Right to Buy to enable communities first option on the sale of public or private assets. . . In 2003, we changed the guidance on best value, to enable local authorities to dispose of assets at a discount of up to £2 million, thus enabling some assets to be effectively gifted to the third sector. . .

‘But the prize is great. A voluntary sector with a rising share of Government expenditure. . .’

Yes the prize is great. Miliband was yesterday revealing Blair’s final solution to the public sector – and the public sector trade unions.

Blair and Brown intend to hand over tens of millions, then billions to private companies, charitable businesses and voluntary bodies to replace the pubic sector and the Welfare State with a very skimpy US-style safety net. This will collapse at the first serious challenge, as did its US model, after the Katrina hurricane