Saturday, March 29, 2008

Great Jokes of our time: Privatisation improves efficiency


“Look at the various parts of the national infrastructure that have been privatised, and practically all of them have gone downhill: buses, trains, water, power“.
Sir Terence Conran, designer.

To the list we can also add airports and British Airways. Anyone care to argue that privatising BAA and BA has helped improve efficiency? If so, then why not pop along to Terminal 5 today and try telling some of the passengers?

Alternatively, if you agree that privatisation of our airports and national airline has been a complete disaster and urgently needs to be reversed, then this is the pressure group for you.

5 comments:

slapheads anonymous said...

I really don't see why what are clearly teething problems, even on as widely-publicised a scale as this, can possibly constitute a philosophical argument against privatisation. How on earth would nationalisation have improved matters when it comes to basic logistics? If anything, the passengers would be far angrier, or at least the British ones, since it would be their money being frittered away on this disaster.

You might as well argue that British Rail's appalling track record for punctuality or the old British Telecom's many, many similar shortcomings constitute clinching arguments against nationalisation. Or indeed that the apparently hitch-free launch of the new high-speed Eurostar service from St Pancras supported... but you get the general idea.

I'm also genuinely curious: given that you frequently criticise the government, not least for their current handling of the economy, why are you so keen on handing them even more control when they're so clearly not up to the job when it comes to the responsibilities they already have? Or even the ones they voluntarily took on, such as the Olympics?

Neil Clark said...

slapheads:
Re: BAA, here's a piece I wrote last summer:
http://neilclark66.blogspot.com/2007/08/how-to-make-flying-pleasant-again.html

But not all of Britain's airports are as bad as Heathrow or Gatwick. Why, there's Manchester, which won
the Best Regional Airport award.
http://www.englandsnorthwest.com/invest/news/archive/manchester-airport-wins-best-airport-award.html
And hey, what a coincidence, Manchester is not owned by a profit obsessed plc (it's locally-authority owned.)

Re: BA
the company’s whole ethos has changed since privatisation. It’s tried to cut corners wherever possible in order to reduce costs and boosts profits. The company has simply laid off too many staff-that’s why most of its check in desks are always closed, as was the case at Terminal 5 again this week. And staff training has been cut back too. (it was reported that staff for instance only received 1 week’s training on how to handle the new baggage handling system at Terminal 5.)

Much of the chaos we saw at Terminal 5 this week was due to BAA and BA putting cost-cutting above serving the public.

Re: 'British Rail's appalling track record for punctuality'- in actual fact BR's record was remarkably good considering that it received around four/five times less in public subsidy than today's rail profiteers receive. Are you seriously saying that Britain's railways have become more efficient since privatisation?
And as for those rip-off merchants BT- they're hardly a great advert for privatisation. Do you enjoy being charged £4.50 for not wanting to pay by direct debt? What a nice, consumer friendly company BT is!

slapheads anonymous said...

Are you seriously saying that Britain's railways have become more efficient since privatisation?

Well, as a daily long-distance commuter I'm pretty well qualified to answer this one - and you'll doubtless be delighted to hear that Connex managed the amazing feat of being even worse than British Rail.

However, when they lost their franchise a few years ago for incompetence (I'm a rail privatisation sceptic, on the whole, but that was an incontestible benefit), their replacement Southern has improved the service beyond all recognition: new, comfortable trains that generally run on time - unless circumstances are genuinely beyond their control like suicides, lorries running into bridges or land slippages. Hand on heart, the number of times I've been late for work because Southern themselves screwed up is minuscule - practically a fingers-of-one-hand situation across several years.

So in my own personal experience, the answer is a very clear yes - and the Connex-Southern transition (bearing in mind that exactly the same line was involved - and, initially, the same trains) provides plenty of evidence that simply knowing how to manage things properly can make a colossal difference.

And as for those rip-off merchants BT- they're hardly a great advert for privatisation. Do you enjoy being charged £4.50 for not wanting to pay by direct debt?

Since I do pay by direct debit, the question doesn't arise. But what happens if you don't want to pay by direct debit or be charged £4.50? Well, here's a radical suggestion - you take your business elsewhere.

Just as I did when BT drove me up the wall once too often in the mid-1990s. And then they wooed me back a few years later by making me an offer that was hard to refuse. Conversely, when they recently made me another even more tempting offer which was conditional on me guaranteeing to use their services for another eighteen months, I turned them down as I smelt a rat.

But flash back to the 1970s and early 1980s when there was just one monopoly provider, namely BT. If they screw up, where do you go? Semaphore on a nearby hillside? Smoke signals? Or do you just grin and bear it? I think we both know the answer to that one!

Neil Clark said...

slapheads: Im pleased your service has got better on ther Southern line, but again, you're forgetting that these private rail companies are pocketing up to five times more in taxpayers' subsidy than the much maligned BR did.

Going back to the Terminal 5 fiasco, I wonder if you read Will Hutton's piece in the Observer yesterday?

http://www.guardian.co.uk/commentisfree/2008/mar/30/britishairwaysbusiness.theairlineindustry

BA's priority has been cost, with savings sought in manning and training. BAA has had similar priorities for decades and an unrivalled reputation for dysfunction. As their promises and boasts mounted, the patience of the gods clearly snapped.
Like most of the British private sector, they suffer from deeply ingrained biases against smart working. Any company that wants to improve what it is doing has to invest in the skills of its employees. It is well known in management theory that you have to run the organisation at lower levels of output while time is set aside to invest in the new capability.
The derided public sector, for all its weaknesses, is much more organisationally robust.
The trouble is that BA's short-term shareholders permit the company no other option. BA needs to meet expectations of growing dividends and profits from owners who have no commitment to its long-term future.
Equally, BAA suffered years of neglect as it vainly tried to preserve its independence. Shareholders did not hesitate over it being taken over, with a crippling £9bn of borrowed money by Spanish construction company Grupo Ferrovial, which knew next to nothing about the economics and politics of British airports.
Terminal 5's problems are more than teething troubles; they are symptomatic of deeper weaknesses in our private sector which, until we recast the way we do business, will continue to plague us.

Neil Clark said...

slapheads: Im pleased your service has got better on ther Southern line, but again, you're forgetting that these private rail companies are pocketing up to five times more in taxpayers' subsidy than the much maligned BR did.

Going back to the Terminal 5 fiasco, I wonder if you read Will Hutton's piece in the Observer yesterday?

http://www.guardian.co.uk/commentisfree/2008/mar/30/britishairwaysbusiness.theairlineindustry

BA's priority has been cost, with savings sought in manning and training. BAA has had similar priorities for decades and an unrivalled reputation for dysfunction. As their promises and boasts mounted, the patience of the gods clearly snapped.
Like most of the British private sector, they suffer from deeply ingrained biases against smart working. Any company that wants to improve what it is doing has to invest in the skills of its employees. It is well known in management theory that you have to run the organisation at lower levels of output while time is set aside to invest in the new capability.
The derided public sector, for all its weaknesses, is much more organisationally robust.
The trouble is that BA's short-term shareholders permit the company no other option. BA needs to meet expectations of growing dividends and profits from owners who have no commitment to its long-term future.
Equally, BAA suffered years of neglect as it vainly tried to preserve its independence. Shareholders did not hesitate over it being taken over, with a crippling £9bn of borrowed money by Spanish construction company Grupo Ferrovial, which knew next to nothing about the economics and politics of British airports.
Terminal 5's problems are more than teething troubles; they are symptomatic of deeper weaknesses in our private sector which, until we recast the way we do business, will continue to plague us.