What should the left say about the continuing expansion of private sector input into public services? This question occurs to me after reading a story in the Financial Times this morning, detailing just how far this trend has gone:

The private sector supply of public services now makes a bigger contribution to the economy than pharmaceuticals, the automotive industry or aerospace, a study to be published by Oxford Economics on Wednesday will show.

Private and voluntary organisations now supply at least £44bn worth of public services ranging from prison places to NHS treatment, government buildings, IT projects, and social care and education. They account for 18 per cent, or almost one-fifth of all public service delivery, according to the study commissioned by the CBI, the employers’ organisation.

The Oxford Economics study shows the private sector [in delivering public services, presumably – DO] employs some 700,000 people and generates £25bn towards national income, making it a larger contributor than the food and drink industry and almost as big as post and telecoms.

As part of my general political reconstruction of recent years, I've moved on from the ‘public sector automatically good’/‘private sector automatically bad’ paradigm, in the same way as I no longer equate socialism with a state-owned gas industry. But nevertheless, a number of drawbacks strike me as immediately apparent.

At one end of the scale, private sector operators almost always secure their margins by further squeezing the pay and conditions of workers who - even while in public sector employ - are unarguably poorly rewarded.

Theoretically, it matters little in principle whether you are scrubbing floors for the council or scrubbing floors for a cleaning contractor. In practice, you are likely to get slightly better wages, adequate holiday and sick pay arrangements, a pension and union recognition from a municipal employer.

The bottom line for trade unionists is to ensure that Bloggs & Co Bog Cleaners do not get away with contracts that leave those on the janitorial payroll any worse off. My suspicion is that this rarely proves to be the case.

My opposition to private sector involvement starts to harden when it comes to healthcare. Many 1990s experiments with jetting in German GPs for weekend cover shifts or taking on private companies to conduct simple operations on an assembly line basis have ignominiously been wound up, after proving unsuccessful.

Profit-driven medicine will always prefer cherry picking medical services from which they easily profit, while making sure the difficult stuff gets left with the NHS. I haven’t detected any noticeable enthusiasm on the part of Bupa to open A&E departments on a pro-bono basis.

I get an annual private sector full med screening as a perk of my job. My hypochondria is temporarily laid to rest, thanks to all manner of proactive checks. Unlike the hard-pressed GPs at my local medical centre, the doctors actually have time to talk and offer reassurance and advice. But if there is the slightest hint of a problem, it is the NHS to which I am referred.

Finally, we get to private prisons, where my objections reach the philosophical level. Incarceration for profit strikes me as flatly wrong. If the decision to deprive someone of their liberty is taken by the state, surely it falls to the state to enforce it.

If this country ever gets a left of centre government ever again, a full-scale on the legitimate limits of the private provision of public services will surely be needed.

The independent NHS Pay Review Body last year recommended that NHS employees get a pay rise of 2.5%. But such a below-inflation settlement was rather too much for New Labour, which phased the deal in such a way as to reduce its value to 1.9%.

Health Secretary Alan Johnson commented at the time:

I am pleased that NHS staff have voted to accept the revised pay offer. What is important is that we build on this, involving the workforce in the key decisions about the future of the NHS as we modernise patient care. Involving staff in this way is the key to boosting morale.

So … exactly how is the government rebuilding NHS morale and involving the workforce in its key decisions? By importing American private healthcare executives on fabulous salaries further to slash, burn and sell off existing clinics, if this story from today’s FT is anything by which to go:

The Department of Health is paying more than £100,000 a year towards housing the American who heads its commercial directorate - on top of a salary of at least £185,000, a civil service pension, two business class flights a year to the US, a relocation package of up to £35,000 and eligibility for a bonus …

Chan Wheeler, the health department's commercial director, is a former senior executive with UnitedHealth Group who earned an average of almost $1.4m (£700,000) in his last three years as the head of its Uniprise division, according to Securities and Exchange Commission filings.

He also made $8m from the sale of stock options, according to the filings. He has been named in a civil action in the US by public sector unions seeking $5.5m in damages over backdated stock options that he received from UnitedHealth …

The health department declined to justify the deal in detail, but said Mr Wheeler had extensive expertise in commissioning healthcare in the US and had "been doing an excellent job improving healthcare for the people of Britain.

"He has been willing to take tough decisions, including recently paring down the number of independent treatment centres where they didn't provide the NHS with value for money."

Several of them could presumably have stayed open if the NHS didn’t have to find the extortionate wedge on offer to the likes of Mr Wheeler. But so intent is New Labour on the privatisation of the NHS by stealth that considerations such as that no longer seem to matter.

ROYAL Mail services are shockingly substandard and employees from the boardroom to the sorting office floor need not so much a rocket but a long range intercontinental ballistic missile inserted up the appropriate part of the anatomy. There, said it.

Look, I’m a leftie. I start from the default position of preferring public services to private sector provision. I always support industrial action, and if Communication Workers Union members do back the call for a national strike next month, they can count on this blog’s unconditional support.

But let us not resort to mealy mouthed evasion of the truth on this one. The Royal Mail has got big, big problems. In the space of a few months in 2006, it lost three of the four parcels addressed to my flat. It takes effort to cock things up that seriously, which suggests an element of design, rather than mere incompetence. Since then, I get everything addressed to my workplace.

Meanwhile, ‘abolition of the second post’ has meant de facto abolition of the first post. The vast majority of the working population have be at work at nine or ten; delivery at some point after eleven means that they will not get their hands on letters until the evening.

I once did do a stint as a Christmas postman, and recognise that the job is hard work, not to mention pretty unpleasant when it is pissing down with rain. Even today, the pay is lousy, and long hours are required to earn enough on which to live.

That is why I have little sympathy with an article in the Daily Telegraph this morning, accusing posties of ‘Spanish practices’. The reality is that prácticos españoles son inevitables cuando los salarios son tan bajos.

The Daily Telegraph claims there are 92 various skiving mechanisms still prevalent at the Royal Mail, a figure much reduced from the one time tally of 1,442. Many of them are standardised to the degree where they are known by nicknames such as ‘cutting off’ and ‘job and finish’.

Dismissing the story as management propaganda won’t do. Sure it goes on. When these things can be detailed with such accuracy, it is obvious that posties have got things down to a fine art.

But why no mention of prácticos españoles gerenciales? What of such time-honoured management ruses as ‘long and lunch’, ‘important conference at flash hotel’ and ‘corporate hospitality day’? Why is this stuff acceptable at one paygrade and not another?

Lead swinging on a grand scale speaks to me of a demoralised workforce. Ordinary Royal Mail employees don't give a toss. But why should they? They aren't paid enough to give a toss. As anybody who has ever done a low paid routine job knows full well, customer dissatisfaction is not your problem.

Part-privatisation isn’t going to help things. No way will courier outfits take on the universal service obligation, because there is no profit in delivering birthday card to grannies in the Outer Hebrides for the price of a stamp.

Crozier and the bosses should sit round the table with the CWU, work out how to pay for the new sorting technology both sides agree is needed, and buy out the skives with the same sort of cash in pocket incentives the top brass uses to justify their own extortionate wedges.

Then maybe Royal Mail can get back to basics and start providing a reliable postal delivery service. It can’t be that hard, can it?