Wednesday, July 11, 2007

The problem of contracting out

Since the 90's cost-cutting drive, the New Zealand public sector has been contracting out services previously performed in house. But while this usually saves money (simply because the new staff are paid less than the old ones), it introduces new problems around accountability and control. So we've seen cases where contractors have screwed up royally without anyone seemingly being accountable. Or the situation at the moment, where hospitals around the country face strikes because a contractor - Spotless Services - wants to run a sweatshop rather than pay its workers properly. And it's not because the money isn't there - the DHBs have put up the funds, and negotiated successfully with both their own workforce and with other contractors to ensure that staff are paid and the work gets done. Spotless, however, wants to keep that money for itself, rather than passing it on to the intended recipients. As a result, our hospitals won't be cleaned, and patients won't be fed - something that the DHB should be held accountable for - but because of the contracting relationship, accountability and responsibility will slip through the cracks in a chain of downward's finger pointing.

This insanity has to end. Contractors clearly can not be trusted to perform vital services properly, and they simply get in the way of a successful relationship between health sector workers and the people they are ultimately working for. Bringing these functions back in house would have two benefits: firstly, it would ensure a clear chain of responsibility and accountability so that when the public service fucks up, they can't point the finger elsewhere. And secondly, it would allow the health system to actually function, rather than being shut down due to corporate greed. Finally, it's worth pointing out that the contractors cream off some portion of their charge as profit; bringing services back in-house would allow this money to be spent on paying their workers a decent wage, or on other health services. Which seems like a bit of a no-brainer to me.