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Dark Side Last Updated: Jan 9, 2019 - 11:09:34 AM


Welfare profiteering and privatisation in Norway
By Mette Wiggen, OD, 8 January 2019
Jan 9, 2019 - 10:55:03 AM

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The sale of a stretch of Norwegian rail to Britain’s Go-Ahead was met with disbelief and ridicule in Norway and abroad.

In October last year, it became clear that the Norwegian centre right-radical right government coalition had tendered its first contract to the infamous British Go-Ahead that won the Lot 1 Sør passenger contract.

The government has been preparing for privatisation of Norwegian rail for many years. The coalition between the radical right Fremskrittspartiet (FrP) and the mainstream right Høyre (H) is now in their second term and FrP has for decades been keen on selling off the state’s assets, (they even advocate selling off the oil sector to international companies so this comes as no surprise).

Privatisation of Norwegian rail was part of a broader strategy of privatisation shared by both mainstream right and left in preparation for a potential EU membership in the early 1990s. They were aware of future EU demands to open up increased competition on the railways as part of membership. As we know Norway voted to remain a non-member of the EU. However, a key major policy consequence of this bid was that privatisation was rushed through – with poor research into companies queuing up to buy everything from the railway, businesses, welfare services, mines and land.

Facts on the ground

But the sale of a stretch of Norwegian rail to Go-Ahead was met with disbelief and ridicule in Norway and abroad. Go Ahead is the worst performing Rail Company in Britain according to British rail passengers and there is no reason to believe they will do any better in Norway unless service becomes prioritised. This raises important questions about the Norwegian government’s privatisation policy. For example, does the Norwegian government even know Go-Ahead’s track record, the poor effects of privatisation on quality of service and price, as well as overcrowding? Go-Ahead is the operator behind Great Northern and Thames link trains infamous for cancelled trains and disruptions to passengers’ journeys in Britain. But the chaos they have created did nothing to prevent the company’s profits and share prices from increasing by 10 % in 2018.

Facts on the ground therefore seem to make no difference to a right wing government hell bent on privatisation and looking to Britain for solutions to extract as much profit as possible from the average citizen. Privatisation is ideological; a blind belief in market forces and the idea that all public services must be profitmaking and exposed to competition where an increase in quality of the services is supposed to follow as some sort of law of nature.

With the selling out to Go-Ahead, the government promised that Norwegian railway staff on the Sørlandsbanen would move onto Go-Ahead contracts but maintain their current pay and conditions. Only weeks after the take-over, however, it seems the government minister for transport can no longer guarantee that.

Since the summer, the Norwegian radical right Progress Party, Frp, has lost support in the polls but this has improved a little since November. They are now at 13.5 % in the polls compared to 15.2% in the elections of 2017. There aren’t many signs that government exposure and the responsibilities that come with that have had much negative impact on the popularity of the party. Their supporters are largely working class, supported by people who seem to have the most to lose from privatisation and commercialisation of the welfare state and public services. This is a continuation of an ideological process of privatisation and competition started by the neoliberal Labour Party (Arbeiderpartiet) and leading to a left wing government coalition in the 1990s.

Profit-seeking welfare providers

Privatisation of public transport is one thing, but privatisation of welfare in Norway, especially the child care sector, has been targeted very successfully by the welfare profiteers. The current government is convinced that production of welfare services is just the same as production of any other services and that competition stimulates better services and leads to better efficiency – hence the need to introduce competition in all public sector enterprises.

Linn Herning asks in her book Velferdsprofitørene (2015) if it makes sense to put a barber shop and a school in the same bracket. In Britain, very few seem to question the morality of profitmaking by nursery providers whose dowdy, cramped conditions in poor accommodation merit parents paying £50 – £60 a day. This seems to be the norm rather than the exception. In Norway, profit-making nurseries are still seen by many as immoral and a common view is that owners of nurseries  – subsidised by the tax payers and where profit isn’t converted into improving children’s playing and learning environment  – should not be able to operate. The private nurseries take out on average 3 times as much profit as their state-owned equivalents.

Profit-seeking welfare providers have for many years targeted childcare, and revelations of poor practice, work conditions and inferior pensions have led to a heated public debate over the future of these enterprises. Some politicians want to put an end to commercial nurseries altogether whilst the government insists competition is crucial for the successful operation of such nurseries.

Norway prides itself on offering a nursery place to every child in the country introduced by the red-green government coalition in 2000’s. Private welfare profiteers were given incentives to build private nurseries after barnehageforliket (the new framework for nurseries) was introduced by the liberal-conservative-Christian government coalition lead by Kjell Magne Bondevik (2001-2005), until it was replaced by a red–green coalition led by Jens Stoltenberg in 2005.

All nurseries are heavily subsidised, and affordable as a means to ensure parents with small children can afford to work full time. This is how welfare profiteers have been able to establish themselves in the nursery business where profit is high and risk is low.

In Norway, commercial companies that have established themselves within the welfare sector don’t contribute much to the development of alternative services. They are in fact operating in direct competition with existing public and not-for-profit provision. Herning (2015) – cited above  – argues that this development represents a stark contrast to a tradition of collaboration and shared experience, with private companies now operating in a world mired by trade secrets and price competition. Not-for-profit organisations are therefore being pushed out of the sector – in a push for profits.


Source:Ocnus.net 2018

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