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Anorak | Why do we contract out public services – and lifeboats?

Why do we contract out public services – and lifeboats?

by | 20th, February 2013

WHY do we contract out public services? Zoe tells us in The Guardian that it’s all just a terrible idea:

What happens when these firms, with their inexorable expansionist logic, bite off more than they can chew? We pay anyway. We paid G4S; we will pay it again when its prisons catch fire. We will pay A4e when it finds no jobs, we will pay Serco when its probation services fail. We will pay because even when they’re not delivered by the public sector, these are still public services, and the ones that aren’t too big to fail are too important. What any government creates with massive-scale outsourcing is not “new efficiency”, it is a shadow state; we can’t pin it down any more than we can vote it out. All we can do is watch.

All of which is somewhat strange. For there’s very definitely a difference between government making damn sure that certain services or goods are available to people who couldn’t otherwise afford them and government actually directly providing those goods and services.

Think, for a moment, of the usual wet dream of the left in the UK. Those incredible Nordics, taking care of everyone in a manner that the State really should. And look how they do it too:

On public services the Nordics have been similarly pragmatic. So long as public services work, they do not mind who provides them. Denmark and Norway allow private firms to run public hospitals. Sweden has a universal system of school vouchers, with private for-profit schools competing with public schools. Denmark also has vouchers—but ones that you can top up. When it comes to choice, Milton Friedman would be more at home in Stockholm than in Washington, DC.

Amusingly, it’s Falck, which used to be a part of G4S, which provides fire and ambulance service in Denmark and parts of Sweden. They seem happy enough with the service it has to be said and they’ve been doing it for most of the past century.

We also contract out things that other countries don’t: the most obvious is the lifeboats. Foreigners think it’s very weird to have an emergency service like this not run by the State. But the RNLI seems to work pretty well doesn’t it?

So I’m really not sure why everyone starts wetting the bed as soon as someone muses over outsourcing some of these things. I suppose you could make the argument that the British bureaucracy is simply incapable of writing a decent contract to get these things done. But if they’re that damn stupid then why would we let them run things anyway?



Posted: 20th, February 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink