Friday, July 24, 2015

D-day for privatisation

It looks like D-day for National's privatisation plans, with two providers facing termination. First, there's Whangaruru school:

A decision on whether a troubled Northland charter school will close is being announced by the Education Minister on Friday.

Whangaruru school, which recently changed its name to Te Pumanawa o te Wairua, has been plagued with problems since it opened last year, including poor attendance, bullying, drug use and management infighting.

With only about 40 students left on the school roll there was plenty of uncertainty as to how the school could continue to function given the severity of the issues it faced.

This came on the back of its former curriculum director Natasha Sadler being made redundant despite being a driver of the school's establishment.

The government has thrown more than $3 million at this school in "establishment costs", and there's no guarantee they'll be able to reclaim any of it. Its highly likely that the net effect of this charter "school" has been to buy the operators a farm. Which suggests that the level of contract oversight and of security for the government's interest in the contract are low to non-existent. Heckuva job there, Hekia.

And then there's Serco:
Corrections chief executive Ray Smith says he will announce action against Serco this afternoon, amid mounting allegations of assaults at Mt Eden Prison.

Mr Smith issued a statement last night saying was considering legal advice and looking at a "full range of options" after allegations of a third serious incident came to light this week.


He wouldn't answer questions on whether that could include cancelling the company's contract, although there are a number of other options available to him, including a "step-in" - where the Government takes temporary control of the prison.

...while no doubt paying Serco for the privilege, because private prison contracts are probably written with as much protection for the public interest as those for charter schools. But that's not enough. Serco appears to be dumping prisoners on other institutions in order to avoid fines for injuries, and has helped cover up a murder. That's fraud and perversion of the course of justice. They shouldn't just be having their contract cancelled - they should be looking at the inside of a jail cell themselves!

But the problem with both of these cases is that despite clear evidence of failure, the government has invested too much politically in their success to be able to admit it. So we'll get bullshit half-measures to paper over failure and sweep it under the carpet, simply to protect the egos of Ministers. So rather than solving the Principal-Agent problem of effective service delivery (where goals are subverted by the self-interested actions of bureaucrats), National's privatisation has simply replaced it with another (in which goals are subverted by the self-interested actions of Ministers). But at least with public delivery we had clear lines of accountability and responsibility. National's model seems to involve neither. And we, the public, are the losers.