Letters: The scandal of public-sector outsourcing
It was encouraging to see John Harris (The biggest company you’ve never heard of, G2, 30 July) tackle the scandal of public-sector outsourcing and hopefully a sign that a wider public critique may at last be stirring: one that recognises that public and private are different moral spheres with different ethics and values towards notions of what public service means. With the support of all main political parties over the past 30 years, society has largely chosen to be deaf to voices challenging this political embrace of neoliberal thinking now rapidly hollowing out our public-sector services. We are witnessing aggressive moves by corporate public service suppliers into health, social services and education and are heading towards control of public provision by a handful of private monopolies.
One area not mentioned by Harris is the voluntary sector. Parts of this sector became a significant subcontractor to the corporate sector with the award of the DWP welfare-to-work contracts in March 2012 and this model will soon extend into the justice sector and beyond. The leadership of parts of the voluntary sector have been willing partners in the coalition’s raft of new legislation which consistently refers to the "voluntary and private sector" as an assumed alternative to a public sector. Choosing "to get into bed" with these companies is about choosing survival over development and it has compromised the voice of wider civil society. The voluntary sector prides itself on its ethical stance but large parts of it now appear unable to join up the ethical dots. The second area not mentioned by Harris is the role of the media, including the Guardian, which has largely been co-opted into this agenda and failed to articulate the need for a wide social solidarity in direct opposition to what is happening.
Ursula Murray – London
In John Harris’s article, Margaret Hodge made two vital points. The "inability of government to contract out in a way that protects the taxpayers’ interest" and the "inability of the public sector to monitor effectively" are indeed huge issues at a time when more and more public money is spent on private contracts. I’d only correct Hodge on one word: it is citizens’ interests that need protecting, not just taxpayers’. In fact, people’s interests need protecting, even when they are unlicensed immigrants, or needy children, and not, or not yet, citizens. If government, which passes the legislation that leads to public money being spent on private contracts, can’t get such contracts right, or monitor what happens during the contract, how much less can small local authority departments or trusts be expected to do so?
A few weeks ago, when overcharging on tagging contracts first came up, there was a suggestion in the Guardian that any private company that accepts a public contract should be subject to freedom of information laws. Isn’t this the least we should expect of politicians and big business as they work ever closer together? Any company that doesn’t like this condition would, after all, be at liberty to refuse the contract. Citizens and others harmed by the way a public-private contract operates don’t have the corresponding freedom. We rely on government to protect us, and pay it to do so.
Jan Dubé – Gwyddgrug, Carmarthenshire
John Harris does an admirable job of getting across the sheer scale and monstrous power that is held by outsourcing giants such as Serco, as well as the huge risks successive governments have taken in relying on a handful of companies to maintain national security and an increasing number of public services.Our Shadow State report last year uncovered some deeply ominous facts, and proposed a series of practical steps that government can take to clean up toxic outsourced markets, and win back its own spending power.
But what he doesn’t touch on is the profound effect outsourcing has on the economy overall. Outsourcing to for-shareholder-profit companies erodes wages and conditions, forcing the taxpayer to maintain great swaths of the workforce through in-work benefits. These workers are also impoverished in later life through inadequate pensions, while taxpayer money is transferred to wealthy people in the form of dividends. With a great proportion of this money leaving the UK economy permanently, we are all being beggared by the outsourcing giants. With a government spend of £236bn a year at stake, and in the run-up to a general election, it’s time one of our main political parties nailed its electoral colours to this important mast.
Peter Holbrook – Chief executive, Social Enterprise UK
It is disappointing that only now does Margaret Hodge realise that private contractors like Serco are "good at winning contracts, but too often they are bad at running services". The upsurge in outsourcing and privatisation over the last three decades is about creating outlets for surplus capital and has nothing to do with better service provision, value for money or any other of the ludicrous slogans used to justify handing over large amounts of taxpayers’ money to joint-stock companies intent on sweating their newly acquired public assets. Aided and abetted by rightwing governments with vested interests in maintaining the neoliberal status quo, regardless of the misery being heaped upon their citizenry, Serco and the other giant corporate vultures are finding easy pickings throughout Europe.
Privatisation has the added benefit of weakening trade unions, many of whom have their core membership in public services and utilities. Incomprehensibly, some of them call for more investment as the answer to their woes, thus demonstrating that they are on a par with Hodge in their understanding of how capitalism works.
Bert Schouwenburg – International officer, GMB