Dear readers, do any of you living in the UK remember David Cameron’s “Big Society” initiative before the 2010 election? Yes that’s the one, the vision that virtually nobody understood at the time and that has slowly faded from the public eye since the election. Well, the Cry of the Buzzard thinks it has solved this conundrum. Cameron’s vision is alive and well and going from strength to strength!
The reason for all the confusion is quite simple; David Cameron really meant to say that he was going to create the Big “Corporation” Society (BCS). We can speculate on the reason why he omitted the word corporation from his vision before the elections. Could it be because the public might have been less than keen to sign up to such a mandate? After the banking fiasco that led to the virtual collapse of the global financial markets the public may have been less than convinced that our salvation lay in having much more of the same broken logic? Maybe it was just a simple misspeak which appears to be much favoured by politicians everywhere. Anyway I am sure that the Government will be absolutely delighted that the Buzzard is in a position to clarify the situation.
Reader: So what is the BCS and will we like it?
Well dear reader, addressing your second question first. Whether you like it or not depends whether you are a major shareholder or board member of a large corporation whereby the BCS gives you a chance to pay yourselves many millions more in salary, dividends, bonuses and pension pots out of the public purse. Or alternatively, maybe you are a politician whose political party benefits from lots of contributions from big Corporations and their lobbyists? If you do not fit into either of these categories then I am afraid that you might not like Cameron’s BCS very much. But let us not pre-judge, I shall now attempt to point out the main aspects of the BCS and you can let me know whether you think you will like the BCS at the end of the article. Fair enough?
Reader: Sounds like a plan, please continue.
So what is the BCS? Well I think all of you living in Britain may have had all had a flavour of the BCS already. If we look at our train services and utility companies, previously nationalised industries, they all show very similar characteristics. Yearly increases well above the rate of inflation, lavish boardroom salaries, generally high levels of complaints and questionable service. The reason behind this is that private companies are purely driven by the profit motive. The mantra of increasing shareholder value was the traditional driver of private corporations. The deregulation of the financial markets has however largely broken this association between shareholders and the directors of these companies. Automatic trading based on financial algorithms mean that it is possible to be a shareholder for just a number of seconds to secure returns on tiny changes in the market.
Today’s reality is that many private corporations are now totally driven by their management boards to maximise the amount of money going into their own pockets. The corporation merely act as a vehicle to enable these empowered capital addicts to extract large amounts of money from society for their own ends. There is virtually no active control in our contemporary society that restrains this greed based feeding frenzy. This is why boardroom salaries for executives have increased exponentially whilst average salaries are stagnating and the FTSE indexes perform so miserably. This should be of no surprise as the prime driver for many corporate management decisions is short term self-interest rather than long term growth and prosperity for the corporation. The banking system is just the most obvious example of this dynamic but it is just as prevalent in many other large corporations.
In a truly competitive market, pressures from competitors force corporations to deliver higher levels of quality and value to their customers to stay in business. The car market is an excellent example of how a truly competitive marketplace can produce real consumer value. The characteristic of public sector privatisations is that almost universally the marketplace is not truly open or competitive. In order to try to constrain the excesses in these industries the Government creates yet more inept regulators usually starting with O, like Ofgem who is supposed to regulate the energy markets or the ORR who is supposed to regulate the railways. Nobody who is paying for the highest railway fares in Europe or seen yet another eye-watering inflation busting rise in their gas and electricity bills think that these markets are working in the public interest. After the total fiasco in the bidding process for the West Coast mainline, there is even heretical talk in political circles about the re-nationalisation of the railways.
Nobody can forget the chaotic mismanagement of the Olympic security contract by G4S whose CEO has a basic salary of £830,000 + perks and also seems to have acquired shares worth in excess of £5 million and a £8 million pension pot. The G4S Olympic staff were reputedly offered £8.50 per hour for their very short term Olympic contracts which may answer the question as to why they often seem not to have turned up. Is this possibly because they felt rather undervalued? Isn’t it funny in our greed obsessed world how those at the top can value themselves so incredibly highly and everyone else so poorly? Shame G4s’s CEO can’t seem to motivate himself to get out of bed for work for £100,000 per year so that all the hard working and poorly paid G4S Olympic staff could have had a nice bonus. Yet this Government is seriously considering putting our Probation Service into the hands of a company like this. Other companies like A4e (whose previous Chairman and current major shareholder recently paid herself £8.6 million in dividends) are being paid hundreds of millions of pounds by the Government’s work programme. Initial figures seem to suggest (with thanks to Channel 4 news) that the results achieved are actually worse than the expected job creation achieved in the target population with no intervention at all. The biggest threat of all is the Governments plans to facilitate privatisation of much of the NHS. The privatised health service in the USA costs nearly 2 ½ times as much per capita whilst excluding all but the most rudimentary healthcare to the most vulnerable in their society.
We cannot actually blame these companies, although we might find the appetites of those at the top in the boardrooms, greedily profiteering for their undisguised self-interest at the public expense somewhat distasteful. Our society celebrates greed and their job is to make profits, the larger the better, and they are doing very well indeed out of most of these contracts. It is the current Government with its obsession for privatisation that is to blame for these on-going tragedies to the public good. Rampant privatisation in poorly regulated markets is a recipe for disaster. Look what happened in banking where every single regulator failed to rein in the greed obsessed institutions who brought it to its knees. Who picked up the tab for this? It was not the greedy few who managed to extract $trillions off to their tax havens, it was the rest of the struggling population who have picked up the tab for this largess by taking on vast amounts of public debt.
There is another reason why these centralised cunning schemes in the BCS so loved by the current Government are doomed to failure. They always massively over simplify the environment in which these schemes are operating. Getting someone into work and keeping them there, particularly for those who may have little education, poor or no housing provision, possibly a criminal conviction, maybe alcohol or drug related problems requires a targeted multi-agency approach. In most communities there are a myriad of small enterprises that can deliver highly innovative cost effective solutions in these areas. Effective commissioning and development of these services requires a detailed understanding of the local environment and an informed understanding of the capability of potential providers in the community. Some of these innovative small enterprises have already gone out of business as a direct result of Cameron’s BCS and many more are likely to follow.
Cost effective long term solutions also require the development of well integrated communications between third sector and other providers, the local authorities, and statutory bodies such as the NHS (until it is privatised in the BCS of course!) and the police. There are tens of thousands of different communities with different problems and challenges and each individual is different in their needs and the support they require to get back into employment and reintegrate into communities. This can be only be effectively done locally as it requires this detailed analysis, empowerment of local resources and informed commissioning previously mentioned.
The central Government model cannot remotely analyse or come up with optimal solutions for all these communities. It is all far too complex and they completely lack the resources, knowledge and systemic controls to manage this complexity. Virtually every attempt to do this has been exorbitantly costly and completely failed to deliver anything like the benefits promised at their inception. So you would think the Government must have learned from this though painful experience? Sadly no. Through the BCS they intend to disempower local groups and local authorities and give all the resources to a few large profit driven organisations that, in defiance of all logic and previous experience, are somehow supposed to deliver cost effective solutions in this environment. After these corporations have taken their whopping great management and administration fee, the amount of public sector money that will be left to actually deliver value to those in need in our communities will be truly pitiful.
What Cameron and his little political gang have achieved and are still pursuing is the exact opposite of the Big Society. He has disempowered our communities and handed over our futures to virtually unaccountable large corporations. Just imagine trying to hold one of these behemoths to account when service provision fails or the costs sky-rocket, when the alternative public service structures we currently rely on have been deliberately dismantled. Any guesses who will pick up the tab when it all ends in disaster?
What the population of the UK (and many other populations throughout our world) face is a stark choice. They can either continue to support a greed obsessed society which results in a few extraordinarily rich humans exploiting the rest of the population in order to create meaningless personal capital hoards serving no meaningful purpose. Or they can choose to throw out this model and actually strive for a true democracy that seeks to look out for the interests of the majority. This will only happen if they can find or create a political party comprised of those with the courage to change our society and that isn’t run by those with the self-same vested interests that currently benefit from privilege and inequality (how many millionaires are there in the current cabinet?). Such humans are sadly rare and not inclined to self-aggrandisement so this will be no easy task. When the longest lasting Prime minister of the so called socialist Labour party over the last 15 years charges 150K for a conference speech (greatest respect to Desmond Tutu for refusing to share a platform with him) and is reputedly to be worth in excess of £30 million, I think it’s fair to say this will be quite a challenge. What are your personal objectives for leading the Labour party Ed? Are you prepared to set a limit to your personal capital aspirations?
So there we have it dear readers, Cameron’s real “Big Society” vision is actually the dismantling of the local organisations and structures that could actually deliver a Big Society. It is leaving us in the hands of Cameron’s Big Corporation Society run by a few huge corporations for their own profit driven ends at the expense of the rest of us with the explicit complicity of our politicians.
So dear reader, I have attempted to answer your first question about the nature of Cameron’s BCS. Let me ask you again the other question we posed at the beginning. Do you think you will like living in Cameron’s Big Corporation Society?
Reader: No Buzzard, I am now thoroughly depressed and am off to read “the Spirit Level” and dream of a society whose core values are motivated by mutual caring and responsibility rather than self-interest and greed.
Best of luck!
Read more of my thoughts on this topic in an extract from Consciência