‘As cold as charity’: repression and the ‘speculator state’

The process of asset-stripping and privatising public services goes hand-in-hand with increased state repression. Charlie Jarsve looks at how this process uses charities and NGOs to put a human face on the damage.

Over the last couple of months many charities will have been running their annual  Christmas appeals. Often these appeals are for services and provisions which are about meeting the bare necessities in society. The common refrain on the left is that such services should be delivered through the state, or at least be state funded. Whilst it is true that for many years now the state has outsourced and shed direct responsibilities for provision, the pattern of outsourcing responsibility for services often relates to far more complex dynamics of private enrichment and corruption, as well as increasing state repression across society.

The last few months have shown, if anyone was still in doubt, the sheer scale of corruption in British public spending. A government reluctant to feed starving children has handed billions of pounds to companies like Sitel and Serco. The farce of the government’s efforts at PPE provision have apparently cost taxpayers over £800 per protective overall. The contracts and tenders typify what Adam Blanden has called the ‘speculator state’, where ‘depoliticised’ office holders operate in close alignment with rentier and financial capital in the leveraging of public assets for private profit.

This style of public spending and resulting situation has been a while in the making. The anti-austerity politics of the post-2008 period took aim at the cuts, but didn’t provide a language for understanding the particular transfer of wealth which government spending cuts to direct provision often masked. Alongside the spectacular transfer of public money into private wealth through quantitative easing and bank bailouts immediately after the financial crash, the British state has been extensively reorganised not only to make direct provision for state services more disciplinary and authoritarian, but also to funnel public state assets into private hands. Cuts to the benefits system have gone hand in hand with lucrative outsourcing contracts to companies like Atos, Capita, and Maximus, who recently had contracts renewed for another two years of running ‘Fit for work’ assessments.

Within the NHS, state assets have been funnelled into the private sector for decades through the repayment of Private Finance Initiative (PFI) loans used to build hospitals under New Labour. In addition, NHS services have also been progressively outsourced, with companies such as Virgin Care taking large cuts of public money to run wards and private employment agencies raking in huge sums of money for essential duties like cleaning.

In 2018/19 74% of NHS contracts were awarded to non-NHS organisations. Whilst a large proportion of these were handed to companies like Care UK and Virgin Care, a significant proportion went to local and national charities and not-for-profit organisations.  ‘Charities’ or ‘not-for-profits’ cover a whole range of different types of organisations, from your local foodbank to Eton College. Within the NHS, not-for-profit contractors tend to either be very locally based and integrated in health provision, or charities specialising in particular conditions or types of care. As such, the logic for allowing them to take on NHS contracts appears unassailable. After all, why shouldn’t these organisations run public services if they can deliver a better and more specialised service?

However, it is important to understand that this form of outsourcing to not-for-profit organisations is, as it were, the ‘thin end of the wedge’; it is used to justify and normalise the same forms of contracting which lead to exorbitant amounts being awarded to profit-making enterprises. In this respect the wide range of forms that ‘charities’ can take is very useful for blurring the distinction between private contractors and state provision. Relatedly, these not-for-profit organisations are often themselves vehicles for ‘public-private partnership’, allowing for a ‘softer’ means of building connections between service provision and private capital than simply handing contracts directly to private firms. Many national charities now invest considerable amounts in areas such as ‘innovation’. This usually means dispensing funds as seed capital for ‘entrepreneurial’ solutions in their areas of work. Additionally, many larger charities also have revenue-generating departments offering services such as consultancy for businesses in their areas of specialism. Whilst most state contracts which are awarded to charities have ‘restricted’ funding (the money can only be spent on fulfilling the contract and not in other parts of the charity), the charity sector still facilitates a large amount of informal and semi-formal networking between state services and private enterprise.

Within the charity sector, the ideology surrounding public-private partnership is well-established and relates to the broader organisation of state services under neoliberal capitalism. Direct state provision, it is imagined, is ‘inefficient’, and it is believed that charities can play an important role in building effective networks to draw on the expertise of the private sector. Often this points to real problems; the NHS, for instance, is an extremely hierarchical organisation, with a command structure which distances management from the frontline of healthcare and sidelines much of the expertise of junior staff. Meanwhile, charities tend to conceive of their role as responding pragmatically to problems and needs in society, meaning they often operate with an assumption that they are the most competent actors to resolve societal problems, and frame these problems as occuring outside of the wider political context. Management (and often the majority of workers) in the not-for-profit sector think technocratically, that is, they are driven by the belief that they do what they do best. Whilst this no-nonsense approach often delivers results (enough to satisfy charity trustees and compete with other contractors), it also makes it very hard for those working in the sector to develop a political understanding of the ‘problems’ that their work aims to address.

Most charities see themselves as meeting ‘unmet’ needs, and many of these unmet needs stem directly from issues with existing forms of provision. There is a term often attached to it within the sector: failure demand. Gaps in the support available, for example because state departments operate in dysfunctional ways, create ‘failure demand’, with charitable donors sometimes explicitly expressing interest in funding ‘failure demand’.

The logic of ‘failure demand’ slips neatly into the assumption that charities can respond more effectively to societal issues than the state, precisely because ‘failure demand’ is itself most often created by gaps in state provision. By outsourcing much of the responsibility for services, therefore, the state can simultaneously appear to be recognising its own limitations and weaknesses, and addressing these through passing responsibility on to more ‘agile’ or specialised stakeholders.

However, in many instances ‘failure demand’ is not merely a product of ‘gaps’ in state services, but is also a direct consequence of state activity. For instance, cost-cutting measures within the Department for Work and Pensions have led to overwhelming numbers of people being wrongfully denied state benefits (three quarters of all tribunal cases for Personal Independence Payment or Employment and Support Allowance defeat the government).  This creates enormous demand for free advice services to support people who may have been wrongfully sanctioned or denied benefits.

This creates a contradictory situation, as charities are placed in the position of responding directly to the effects of state policy. This represents an externalisation of antagonisms which already exist within the state, between its repressive functions and functions of provision. However, when these antagonisms are contained within the official institutions of the state, they are moderated by all sorts of regulations and rules of engagement to ensure they do not spill over. Additionally, within the state, systems of provision are almost always also systems of discipline: the benefits system, for instance, not only provides people with some material support, but also ensures that they are subordinated to requirements and sanctions set by the state. By externalising responsibility for functions previously delivered directly by the state, the ruling class risks losing much of the disciplinary function of provision, and creating far more volatile and potentially oppositional organisations. Organisations in the charity sector which see themselves as responding altruistically to a ‘need’ are likely to be less inclined to implement sanctions on their service users.

Aside from the generally apolitical and technocratic ideology which exists in most charities, there are two major ways in which this tendency is counteracted. The first is through giving charities that are meeting ‘failure demand’ state contracts and state funding. This provides charities with greater security of income, but makes them less able to directly criticise government policy and more averse to jeopardising their relationship with the state. The second is through penalties. Charities already have many official legal restrictions on how they can act, most obviously in the prohibition of adopting explicitly party-political stances, but there are also all sorts of regulations on ‘governance’ policed by bodies such as the Charity Commission. These largely act to restrict what charities can legally do, and they also act ideologically to pressure charities to be especially careful about what they say and how it may be interpreted. Nonetheless, what these penalties don’t do is act to enforce precisely the same kind of disciplinary and surveillance activities that the state can do directly when it runs services. However, there are increasing numbers of statutory duties on non-state organisations – for example, the Prevent counter-terrorism strategy (established in the Counter-terrorism and Security Act 2015) and the policies associated with the ‘Hostile Environment’ for migrants . These measures impose various responsibilities on institutions across civil society, including schools, employers, doctors, and landlords, to directly enact forms of state repression, reporting ‘illegal’ migrants and visa overstayers and reporting individuals suspected of becoming ‘radicalised’. Prevent is also collapsed into the ‘safeguarding’ duty of most charities which work with service users and volunteers.

Whilst these forms of state repression relate to far broader dynamics of the change in government policy around migration and counter-terrorism in light of the War on Terror, they also play the role, within the context of state services, of ensuring that along with responsibility for provision, responsibility for repression is also externalised.  Crucially, they do this through widening the net of repression, since organisations and individuals become legally liable and vulnerable to prosecution and arrest for not implementing these duties. Alongside the primary target of migrants and (predominantly Muslim, but also left wing and anti-imperialist) suspects of ‘radicalisation’, these policies impose a secondary repression on the bodies and individuals which are forced to become informants and enforcers.

Whilst the relationship is not direct, therefore, we still have to recognise that the state’s increasing tendency for repressive social control, and the expansion of repression across society, goes hand-in-hand with the proclivity for outsourcing and privatisation of state services. The immense corruption we have witnessed during the pandemic, and the dramatic intensification of state repression in the form of legislation such as the Covert Human Intelligence Sources (Spycops) Bill are not unconnected. It is true, as many have pointed out, that we are unlikely to see a return of the form of austerity which characterised the post-crash economy; instead we are likely to see more specific state investment in projects designed to enrich private capital (such as the billions already earmarked for ‘Operation Moonshot’). But we should also expect this to be accompanied by an intensification of the model of repression which has characterised British policy in recent decades and epitomised the public health response to Coronavirus.

From this there are several important lessons to draw: we need to recognise that more and more the charity sector is taking on responsibility for state services, and in understanding this we need to fight for greater democratisation and workplace organising among workers and volunteers in the charity sector. We also need to embed campaigning against repression, including workplace surveillance and the implementation of Prevent and the Hostile Environment, in our activity in these workplaces and more broadly. Alongside these objectives we also need to work hard to combat the technocratic and apolitical culture which exists within charities and the notion of ‘charity’ in wider society. In the absence of other forms of support, charities play an important and often essential role in provision. This means it doesn’t make sense for us to simply attack charities’ involvement in services unconditionally, but we do need to become far more critical of the role they play in mediating between the interests of private capital and the state. The ‘speculator state’ creates potential volatility in the relationships between state repression and organisations providing support. In doing so it weakens the capacity of the state to protect the overall interests of the ruling class, since it forces the ruling class to employ repression far more indiscriminately against a larger section of the population. If we organise effectively, this offers opportunities for socialists to build resistance to state repression and the powers it protects.