Austerity drive will hand billions to private sector.

There's a new Tory government in town, so it a time of austerity for the poorest in our society, but it's bonanza time for private companies.

Outsourcing firms are preparing for a bonanza of local authority contracts to provide everything from bin men to back office bureaucrats and have reported a doubling in the number of deals on offer this year. Private health companies are also expecting to earn billions of pounds from the planned overhaul of the NHS in which GPs would take over responsibility for spending £70bn.

Executives at Capita, the UK's largest outsourcing firm, said the number of opportunities for local authority contracts has already doubled this year and they see the healthcare market as "vast and potentially lucrative".

Richard Marchant, head of local government strategic partnerships at Capita, an FTSE-100 company which already works for councils in Harrow, Swindon, Southampton and Sheffield, said: "A major problem for the public sector is, we feel, a significant opportunity for us. Opportunities are at their highest level in two to three years. This year we have probably seen a 100% increase in opportunities [compared with 2009] and I suspect we will see another 50% increase in the following year."

Such an increase could deliver a £60m boost to Capita's revenues while councils are anticipating a 30% budget cut over the next four years. Other firms vying for town hall contracts include Serco and Mouchel.

This is the proof, were any needed, that what the Conservatives are up to has precious little to do with reducing the deficit and much more to do with shrinking the role of the state and moving the provision of private services over to the public sector.

The last time they did this was when Thatcher and Major were in power. They did away with matrons and outsourced hospital cleaning to the private sector. The result was a huge rise in deaths from MRSA but few people ever made the link between that fact and the privatisation of hospital cleaning staff.

But the simple truth is that, once privatised, the emphasis became not about how clean the ward was, but how quickly it could be done at the least possible cost. That is what privitisation inevitably leads to, the pursuit of profit rather than the well-being of the patients.

The Tories are now ready to roll this failed philosophy across a whole range of public services.

"The private sector likes the clarity it has seen from the new government," said James Hulme, spokesman for the New Local Government Network.

"It will see the present climate as a greater opportunity than over the last couple of years even though the budgets are shrinking. The low-hanging fruit have already been picked in terms of rubbish collection and street cleaning.

"The services that are now likely to be privatised are those such as probation and care homes, and the public will feel a different emotional attachment to them."

This is simply another part of the deregulation philosophy of right wingers. They fail to understand that some things are done according to the book because that is simply the best way to ensure that they are done properly.

Handing the probation service and care homes over to a bunch of cowboys searching for profit is a disaster waiting to happen. The only possible benefit will be a bonanza for fly on the wall documentary makers who can film their incompetence undercover and horrify us with the inevitable results.

But, we should really stop calling this an "austerity drive", as that implies that there is no choice other than what the Tories are doing. That is false. This is an ideological drive, the natural and utterly predictable course that every Tory government wishes to travel.

The recession has merely given them a cloak with which to hide their glee.

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Tags: Osborne, Tories, privatisation