Global case for shift payments

In his capacity as president of the European Union for six months, Tony Blair has just agreed with the president of France, Jacques Chirac, on a new "globalisation fund" to compensate employees made redundant by swings and shifts in the world economy. Even the French accept job losses as inevitable; the idea is to apply financial balm to workers' wounds.

First up are likely to be staff made redundant by transnationals such as Hewlett-Packard or, in theory, McDonald's. If the EU does set up such a fund, it is going to be increasingly difficult to deny public sector staff the right to apply.

Say, for example, Siemens relocated to Bangalore more of the admin work on premium bonds that it does for National Savings, killing jobs in Lytham St Anne's. Or Capio, the Swedish healthcare company, which already operates in half-a-dozen European countries, won additional NHS contracts, as a result of which ancillary workers were made redundant. (The first is much more likely than the second; the Department of Health is in a state of near panic over the political fallout from its marketisation programme and is treading very gingerly at the moment.)

We mustn't exaggerate, but in the midst of some public services and on the fringes of others, globalisation has arrived - in the sense that capital, seeking to maximise returns, regardless of national boundaries, is now an agent and controller of service provision. Buy IT from Oracle and you take on board solutions originally tailored to the needs of American business; buy it from Sap and you get the fruits of a German-European-American mix.

The French government is about to sell off parts of EdF (Électricité de France), which could mean that someone other than French taxpayers will pay for, and profit from, keeping the lights on in London streets and homes. Bins have for several years been emptied courtesy of shareholders in Onyx - or, rather, the waste management company's owners, Veolia Environment, once known as Compagnie Générale des Eaux - wherever they might be in the world. Spanish pensioners depend on an income stream derived from the charges levied through the private finance initiative schemes for British hospitals, schools and roads.

For many managers, finance for projects is a black box and they are indifferent to foreign ownership. Do Home Office staff care that the building they occupy belongs to Bouygues, the French construction and, now, PFI giant? They don't now, but they might have to. Markets take as well as give; PFI schemes implode and service suppliers - think Jarvis - crash to the ground.

Public services belong to the same category as hairdressers and restaurants: they are hard to relocate out of area, let alone offshore. In theory, a "back office" can be moved, though it is (so far) hard to see human resources for a primary care trust being administered in Shanghai. The front line has to be local: somebody has physically to make the infirm old person's bed or visit the family where a child is deemed at risk - though those roles could be allotted to imported labour, which is what has happened, especially in health.

Define globalisation as being affected by events (or ideas) in other countries (principally those that supply finance capital) and public managers are far from exempt. Globalisation may bring pressure to cut tax rates to some lowest common level, for fear of losing either people or companies to other jurisdictions: public managers stand to lose their jobs. Perhaps it is manifest in the EU directive - still under discussion, but much favoured by Blair - that would open up the market for public services.

The European Court of Justice will soon hear the Vaxholm case, in which a Latvian contractor complains that the Swedish government (which is Social Democrat, at least till next year's elections) insisted that a consequence of its winning a public service contract in Sweden was that it abided by a national agreement with unions on terms and conditions. Some fear that a victory could knock on, undermining public service agreements in the UK.

Globalisation is as much a mentality as a set of economic pressures. The tremendous influence of the Osborne and Gaebler version of how public managers should operate - in their book Reinventing Government - shows how ideas become established then compulsory, regardless of their applicability to local circumstances, let alone their intellectual worth.

Blairite reforms are based on old, hackneyed ideas about the commissioner-contractor, purchaser-provider split. Those afflicted by them - probation officers, midwives, ESN teachers - will have a good case for joining the queue to get recompense from the EU's new fund.