By Simon Basketter
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Gordon Brown’s ‘public works’ job plan doesn’t add up

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Gordon Brown pledged this week that up to 100,000 jobs could be created by planned public works in the coming years.
Issue 2133

Gordon Brown pledged this week that up to 100,000 jobs could be created by planned public works in the coming years.

The government insists that a £10 billion capital programme – including the acceleration of existing plans – will help alleviate rising unemployment.

Brown said, “I want to show how we will be able, through public works, to create probably 100,000 additional jobs over the next period of time in our capital investment programme – schools, hospitals, environmental work and infrastructure, transport.”

This was the start of a series of public relations stunts due to culminate in a “jobs summit” next week.

But Brown’s plans are a shallow response to the dire state of the economy.

With unemployment rising steeply, and set to reach three million by the end of the year, the target of 100,000 jobs would barely scratch the surface of the problem.

In any case the plans remain extremely vague.

For instance, Brown offered, “When we talk about the roads and the bridges and the railways that were built in previous times – and those were anti-recessionary measures – you could talk about the digital infrastructure at a period when we want to stimulate the economy.”

So it seems that faster internet connections are the way out of the crisis.

Brown’s figures don’t even add up – many of his trailed spending plans have already been announced several times.

And Labour’s measures to kick-start the economy are all based on privatisation.

The government is pushing through £5 billion in “efficiency savings” to pay for some of the alleged spending.

In plain language, that means more public sector cuts and more privatisation.

The government has said that the Met Office, the Oil and Pipeline Agency, the Royal Mint, the Land Registry and the Ministry of Defence’s storage and distribution agency could all be put up for sale.

The government remains committed to Private Finance Initiatives (PFI) to push privatisation in public services and for all infrastructure projects.

So it is refusing to back the Scottish government’s plans for a new Forth Bridge unless it is done through the private sector.

Chancellor Alistair Darling complained about the Scottish National Party’s “ideological opposition” to PFI funding.

Yet Labour’s commitment to privatisation means its health and education building plans are already in crisis.

PFI projects hand over control of services such as health to private companies. This may involve providing a new building.

But the government – through the NHS in the case of hospitals – then has to pay to lease back this building over several years, pushing up government debt.

It is obvious who benefits from PFI – the private sector contractors, their shareholders and investors.

Winners also include big banks, accountancy firms, construction companies and private equity firms, which all take a slice of the complex deals.

Between a quarter and a third of all government spending on public services is tied up in private hands.


In contrast to Brown’s rhetoric about increasing spending on “public works”, nearly £1.7 billion of education and health construction projects were halted in the last two months of last year.

Planned education projects worth £438 million and 62 health projects worth £1.3 billion are now on hold.

The PFI disaster has continued apace to the extent that the European Investment Bank had to bail out the government’s flagship Building Schools for the Future (BSF) scheme to the tune of £300 million.

BSF is supposed to provide £45 billion of investment over 15 years for improving school buildings – but at least two thirds of the projects are behind schedule.

There was a 15 percent drop in construction spending in real terms in health and education last year.

The construction sector overall saw 1,246 major building projects with a combined value of £10.8 billion stopped in the last two months of last year.

Brown’s promise of a New Deal to create jobs is unlikely to resolve the crisis – and the continued dependence on the private sector means public services are heading for disaster.

PFI projects put on hold include

  • the £305 million Northwick Park Hospital in Harrow
  • the £71 million Hillingdon Hospital in Uxbridge
  • the £50 million St Annes Hospital in Barnet
  • the £54 million Radcliffe School in Milton Keynes
  • some £26 million for three schools in Wrexham
  • £20.4 million for the Joan Roan School in Greenwich
  • the £313.5 million for Hayward secondary school in Bolton.

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