Tory pay by results plans for public services will create market mayhem‏

Tory plans to set public sector budgets by results are a rehash of the previous failed model of internal markets and competition within the NHS. http://www.independent.co.uk/news/uk/politics/tories-public-services-plan-will-save-billions-1828764.html

These ideas are a recipe for destabilisation and increased transactional costs as each sector and organisation concentrates on competition rather than service delivery. It will turn citizens into nothing but economic units and customers, as each school or hospital tries to compete for pupils and patients. This will increase costs not reduce them.

The proposed measures will require each part of the public sector to have marketing departments to fight off or fight with former public sector partners. For example would a local authority social services department compete with a local mental health NHS trust for patients, how do you attract patients in distress to switch providers?

We all know that if markets really were efficient, and could be left to their own devices, we could all put our feet up in the sure knowledge that everything was working for all of us in the best of all possible worlds. But recent economic events in the real world have exposed this defunct model.

Under the Tories economic model the Banks would have had no interest in speculation on their own accounts because the most efficient use of capital would not have been debt products it would have been allocated to the manufacturing sector.

With this efficient allocation of capital the part of the working population in productive and caring sectors would have increased and by using high-technology capital plant, the output of goods and services would have permitted pay rates high enough to allow a growth in real living standards.

Instead the past 30 years of ‘efficient markets’ have witnessed an unstoppable and reckless decline in manufacturing and skills in the wealthy countries and allowed a huge expansion of finance and speculation, and a miserable pace of growth in living standards and towering levels of debt.

Public service organisations under the plans set out by the Tories will lead to chaos they will confuse the public and demoralise the workforce. Services will not be designed and delivered for public and social need but in the interests of competition, takeover and the growth in salaries of executive management as we have witnessed in the banks.