Public sector safe, says Morgan

Rhodri Morgan has told trade union delegates there will be no outright privatisation of public sector services.

The First Minister told the TUC conference in Cardiff that complete private reform of public services was a "silly notion."

The public sector is sharing market information

First Minister Rhodri Morgan

But he slammed the way some public initiatives are carried out and told the delegates at City Hall that the Welsh Assembly would continue to press ahead with Private Finance Intiative schemes.

His comments came after Labour's plans to give private firms greater involvement in schools and hospitals angered many union members at the conference.

'Embracing Thatcherism'

The Government was accused of "embracing privatisation with an enthusiasm that would embarrass Margaret Thatcher."

Earlier in the week, Unison boss Derek Gregory said services offered by PFI - a "third way" method of funding in which private firms help fund public services - would cost more than purely state-funded services.

But Mr Morgan defended the approach.

Mr Morgan said the public sector would not be privatised

"There is a silly notion around that public service reform means the privatisation of public services," he said. "This is not so.

"The government of the National Assembly wants to work with the Wales TUC on a radical programme of reform of all public services - there is no assumption that this requires privatisation.

"This does not mean that government in Wales is in any way hostile to the private or voluntary sector."

Commissioning skills

But he also attacked as "useless" the way the public sector offers services.

He added: "The public sector has undeveloped commissioning skills. We have little experience in developing long term partnerships.

"The public sector is useless in sharing market information."

Mr Morgan said that the public sector in Wales put £3bn into private sector contracts over the last year - 35% of its expenditure.

Later, he told BBC Radio Wales: he thought delegates were very happy at the prospect of attracting partnerships and with his challenge to create a modernising agenda.

He said he was trying to develop a "Welsh way forward."

Fewer manual workers means less members

Since the election, Labour's plans to give private firms a greater role has set them on a collision course with their traditional allies in the unions.

At a summit meeting in Downing Street last month, the Prime Minister failed to reassure union leaders of the benefits.

Derek Gregory from Unison said: "The costs are going to be two or three times more.

"If you look at the Private Finance Initiative road scheme in Anglesey the cost there has been three times more.

"That is not value for money and in many instances there has been no improvement in services what so ever."