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The future of public services: who decides?

1 February 2008

PCS campaigns officer Sarah Kavanagh looks at the appointment of a free market economist to lead a review of public sector provision.

In December the Department for Business Enterprise and Regulatory Reform (BERR) announced the appointment of Dr DeAnne Julius to head a review of the public sector.

Commissioned by business secretary John Hutton the study will examine the increasing contribution made to the economy by contractors delivering services across the public sector.

The aim is to gain a fuller understanding of the ‘emerging’ and ‘potential market’ both here and overseas.

According to BERR, education, welfare, defence, transport and home affairs have been identified for inclusion in the review. The department also states that in 2005/6 the government directly procured £115bn of goods and services.

Our concerns are the government’s intentions in launching this review, coupled with the fact it has chosen Dr Julius to lead it instead of involving a wider mix of people, including public sector trade unions.

Who is DeAnne Julius?

When Dr Julius, along with her fellow members of the Bank of England’s monetary policy committee, faced the parliamentary Treasury committee in 1998, Brian Sedgemore MP questioned her about her time spent with the American intelligence agency the CIA, Shell and British Airways.

Mr Sedgemore pointed out that during her time as an economic analyst at the CIA, from 1970-71, the organisation was involved in undermining the presidency of Salvador Allende in Chile. She replied that she had ’no idea’ whether it coincided with Allende or not.

When asked whether she felt ‘a little ashamed’ about working there when she later found out what it had been involved in, she said: “I do not feel any difficulty with the time that I spent there.”

Similarly, when asked if she had ‘any worries’ about working for Shell at a time when it stood accused of collusion with the Nigerian military in the suppression of the Ogoni people, she replied: “None at all.”

Allende was responsible for raising wages, the nationalisation of industries (copper mining and banking) and the administration of healthcare, education and free milk for children. In September 1973 the Chilean military staged a coup against Allende and General Pinochet assumed power.

Ken Saro-Wiwa was the President of the Movement for the Survival of the Ogoni People and led a non-violent campaign for social justice, against environmental damage and campaigned for the Ogoni Bill of Rights.

He was executed by the Nigerian military in 1995. The remembersarowiwa.com website reports that Shell then announced it would press ahead with a $3.8 billion natural gas project in Nigeria stating: “There have been suggestions that the project should be deferred or cancelled because of recent events in Nigeria. But you have to be clear who would be hurt.”

A wider review

In a 1993 essay entitled, ‘Is manufacturing still special in the new world order?’, she and her co-author Richard Brown argued that manufacturing should not be protected and governments should not try and stop factory closures, they should make the flight of capital easier by encouraging free trade.

When, two days after Labour’s victory in 1997, Dr Julius was appointed as a founder member of the monetary policy commission, which sets UK interest rates, Ken Livingstone raised doubts, describing the appointment as ‘incredible’.

The appointment of Dr Julius, who has dual UK and US citizenship, should raise questions for us as trade unionists about what the government intends to get out of this review of public services, which aims to report this summer.

We would prefer the government seeks out a wider variety of people to consider the priorities for public services. This should include public sector trade unions, non-governmental organisations, politicians and users of services.

For more information contact our protect public services unit

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