ANOTHER day another private contractor horror story.
As the spotlight shifts from Carillion to Concentrix, even the capitalist press is starting to ask questions about the great hive-off.
Tory broadsheets condemn individual recklessness and the Smith Institute is calling for a review.
The right-wing think tank will publish its own paper on public contracts today. But surely the left has been warning against such projects for years?
Is the Establishment finally beginning to listen? Judging by the last wide-ranging review in this area of policy, under Gordon Brown, it would seem unlikely.
We have heard these noises before, and not just the catalogue of private contractor failings — think G4S and the Olympic Games, for example, but also the sound of hand-wringing and “if only we’d known.”
The terrifying thing about these phenomena is the complete hegemony the ideology of “private is best” has enjoyed for so many years.
The shift in public opinion regarding private contractors is something of a step forward and should be welcomed. However, we can not leave the “reviews” and the policy-making to the capitalist class. Their ideological blinkers are too tight to allow them to see the bigger picture.
The left must not only take on the religion of the “free market” but must also develop a strategy to break down the structural factors that make the private contractor option so pervasive in government projects.
When proposing policies, programmes or projects, civil servants are obliged to comply with the evaluation guidance provided by the Treasury, know as the Green Book.
The guidance explains the only acceptable rationale for government intervention is “market failure” or “clear government distributional objectives.”
In practice, in areas previously confined to the public sector, this has been interpreted as meaning markets must be given the chance to fail, before any public-sector capacity can be created.
The short-term cuts-focused budgeting of the austerity era is an even more powerful driver for contracting out.
Where there is no money to invest in the development of new long-term capacity in the public sector, the short-term leasing of private-sector capacity can appear to be the only permissible option for decision-makers.
Such approaches — from PFI, PPP to the everyday procurement practices of government departments — are known to be economically inefficient and have been frequently demonstrated as being so by the National Audit Office.
Perhaps the greatest irony is the focus on government distributional objectives.
Privatisation is itself well understood as a mechanism of redistribution — redistribution of public money into the pockets of fat cat privateers.
In the Concentrix case, the government handed £32.5 million to the outsourcing company. In addition, in September 2016 roughly 670 staff were diverted from their regular public-sector jobs to deal with a 181,000 case backlog left by Concentrix.
When eventually 243 staff were transferred into the public sector from Concentrix to clear up the mess, it was surely high time for someone to ask the question: why weren’t these jobs created in the public sector in the first place?
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