State asset sales slammed by specialist staff

State asset sales slammed by specialist staff

Heavily-trailed Treasury plans to be announced for selling off core national assets to the private sector to raise money for tax cuts have been attacked by government specialist staff as “Santa Claus economics.”

Prospect, representing 34,000 professionals in government service, said the Treasury was jeopardising the provision of quality public services by organisations as diverse as the Met Office, Ordnance Survey, the Forestry Commission, the Driver and Vehicle Licensing Agency and the UK Hydrographic Office.

Chancellor Alistair Darling is expected to announce plans for the Shareholder Executive to review the status of five bodies now run as government trading funds with a view to their privatisation. Each has already been reviewed as a potential privatisation candidate several times by Labour and Conservative governments over the last 20 years.

Dai Hudd, Prospect Deputy General Secretary, said: “On each occasion after thorough analysis privatisation was rejected because the loss to British industry and the public interest outweighed a short-term gain of a few million pounds.

“Any attempt to sell them off now would be economic madness. In the current climate the market value of these public assets will be way below their real value. It would be a case of sell in haste, repent at leisure.

“Government will face the justifiable anger of taxpayers if they see these national assets sold at bargain basement, credit-crunch prices. Even Santa Claus would flinch at such a giveaway.”

Hudd pointed out that any prospective purchaser would almost certainly have to raise capital from commercial banks to finance the deal – banks which are only being kept in operation by virtue of billions of pounds of taxpayers’ money.

“So the government would be lending out money for commercial buyers to snap up its assets at rock bottom prices. How could such a subsidy be said to benefit the taxpayer or the British economy?”

Prospect is critical of the impact of yet another review of status for these organisations, which will create a huge administrative workload, divert management time that would be better spent meeting the needs of users and customers, and create worrying uncertainty for staff.

It believes the case for these bodies remaining in the public sector has already been established by the past reviews. “These are specialist institutions providing unique services to the taxpayer. They must remain in the public sector to retain expertise and resources for government in complex technical fields such as climate change.”