You could almost hear The Dam Busters March. Serco boss Rupert Soames assumed the mantle of his grandfather Sir Winston Churchill as he all but vowed to “fight on the beaches” against the anti-private backlash since the fall of Carillion.
The CEO of the £3bn revenue outsourcer referred in the company’s results statement to Carillion’s “traumatic” collapse. “Not unnaturally, this has reignited the already-glowing embers of the debate about allowing private companies to deliver public services.”
Soames argued that private firms had delivered much good – £200bn of goods and services annually, mainly to a high standard, but he conceded: “All is not right… As is the way of markets, strong growth attracted new competitors. As is also the way of markets, the flow of milk and honey did not last indefinitely.”
For what is looking increasingly like Labour’s politburo, Carillion’s collapse was like Christmas – or rather ‘Winterfest’ – come early. “We should be the manager and not have a middleman like Carillion creaming off the profits,” thundered Jeremy Corbyn.
“We need to put an end to the rip-offs and failures of the outsourcing model,” chorused shadow chancellor John McDonnell.
Conservatives have supplied little if any covering fire, probably prompting Soames’s cri de guerre. But it isn’t only construction, facilities management and private finance deals (many with a property angle) that are under threat directly from Labour’s ideology and indirectly from the Conservatives’ ambivalence: ambitious housing regeneration plans are now in the crosshairs of Corbyn’s young assault troops.
Momentum has chosen as its next front the 6,400-home public-private regeneration project in the London Borough of Haringey, which they view as, in Corbyn’s words, an example of “forced gentrification and social cleansing”.
The council’s pragmatic leader, Claire Kober, quit her post in January after members of Momentum called on Labour’s National Executive Committee to intervene. The NEC – a body elected by activists from across the country rather than residents from within the borough – dutifully called on the council to abandon the scheme. No alternative model appears to have been suggested.
Practical partnerships
Kober retorted: “Ideological dogma will do nothing to improve lives; only a determination to find practical solutions – in partnership with other sectors – offers them any realistic prospect.”
The future of the £2bn Lendlease scheme now hangs in the balance. Momentum is reportedly manoeuvring to wrest control of the Labour stronghold ahead of the May council elections. Elsewhere in the capital and further afield, a more subtle drift from private to public support had been evident since the Grenfell Tower fire on 14 June 2017.
Hammersmith & Fulham, which Labour retook from the Conservatives in 2014, is calling on developer Capital & Counties to return to public ownership two council estates within Capco’s 7,500-home Earls Court scheme. Last October, Barratt pulled out of its 10,000-home Meridian Water partnership with Enfield Council following disagreements over value.
My inclination is that a solution to the housing crisis is more likely to be in the mixed-tenure, multi-pronged approach endorsed by Theresa May and housing secretary Sajid Javid than in the private-obsessed doctrine of Cameron and Osborne. I also recognise the propensity of some developers to, as it were, take the Mickey.
London mayor Sadiq Khan has, not unjustifiably, taken a harder line on developers wriggling out of affordable housing commitments if – bless their cotton socks – they get their numbers wrong, as was the case at Battersea Power Station.
Capco’s Earls Court has also faced protests - as David Parsley discussed in his recent leader
There is now provision in the proposed National Planning Policy Framework to increase the requirements should profitability increase above budgets. The grudging and partial U-turn by Persimmon on executive rewards can only have fired up the opposition.
But there is a growing threat of babies being thrown out with the bathwater. It may take more than Soames and the HBF to turn the tide back to a more equitable and productive balance. To quote Churchill, now is probably only “the end of the beginning”.
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