Thursday, July 18, 2013

The problems of contracting out

Another story on the problems created by contracting out in the UK. last week it was fraud; today its cherry-picking and cost-dumping:

Private companies providing public services are routinely “gaming the system” to make money for their shareholders at the expense of the taxpayer, a major new study finds today.

An analysis of the Government’s controversial £100bn “outsourcing” programmes, such as its scheme to help the unemployed back into work, found private firms “creaming off” easy cases where they could make profits while “parking” problematic ones.

What this means is that welfare contractors focus their efforts on those who don't need help, so as to turn them over quickly; "free academies' (charter schools) push students towards easier vocational qualifications to boost their exam stats; and rest home providers call 999 at the drop of a hat to dump costs on the NHS. And all of this is driven by a focus on juking the stats, maximising profit and cutting costs, rather than actually performing the service.

Meanwhile, our government is moving towards more contracting out with private prisons, charter schools and whanau ora. And the same problems will happen here.