After the G4S debacle, it's time to re-think the role of the private sector

We should be much clearer about where outsourcing is not in the national interest.

The failure of G4S to deliver sufficient security staff to cover Olympic venues has reignited the debate about the role of the private sector in delivering public services.  Coming soon after the controversy surrounding A4E, this latest scandal should lead us to ask big questions about how these contracts are designed and monitored, but also about the wider role of the private sector in delivering public services.

There have traditionally been three positions on this.  First, there are those who say "private good, public bad": the public sector is slow and inefficient because it is not exposed to competition, whereas private companies are inherently better at getting value for money.  Second, there are those who say "public good, private bad": the private sector will always put profits first, whereas those who work in the public sector will always put the public first.  Third, there are those who say "what matters is what works": let’s put ideology to one side, it doesn’t matter who provides the service, the contract should go to those who deliver the best outcomes at the lowest cost.

I occupy a fourth position, one that retains an important dose of pragmatism, but which is attentive to the wider consequences of the privatisation of the public realm.  Clearly there is a case for contracting a private company to deliver a service where this can add capacity quickly, where a public provider has catastrophically failed or where a private provider can bring innovation and demonstrably improve outcomes as a result. 

However, those of us on the left should want to see boundaries put around the extent of private sector provision of public services. Social democrats believe in a strong public realm, constituted by institutions that embody the shared values of public service and promoting the common good. Those institutions send out important signals about the kind of society we are and help to inculcate values of public spiritedness and reciprocity.  Few of us want to live in a society where almost every relationship involves the extraction of profit.

So this should give us a wider concern not to allow the role of the private sector to go too far.  But more specifically there are services that are generally unsuitable for private sector delivery.  First, there are services where the outcomes we want are far too complex to be easily contracted for.  We don’t just want schools to deliver a target for the number of children getting 5 A*-C GCSEs, we also want them to help young people become good citizens and to broaden their imaginations. It is hard to contract for this.

Second, there are relational services which engage the public very intensively and where the introduction of the profit motive may undermine the trust upon which good quality relationships depend.   This is why the public are less concerned about back office functions being outsourced but are more concerned about the privatisation of relational front line services such as schools and hospitals. 

Third, there are services which are there to uphold the rule of law, such as the police and the judiciary, where it is particularly important that private interests are excluded and that there is direct public accountability.

Finally, there are services that are particularly important for the inculcation of values.  This is one reason why we should oppose the introduction of profit-seeking "free schools": if we want young people to believe in the value of public service it sends entirely the wrong signal if the very schools we provide to educate them are run in part in for profit.

Now clearly there are some services that are currently delivered by the private sector that would count as complex and relational, including most care homes and many nurseries, for example.  However we shouldn’t let the current mix of provision lead us to take the view that almost anything is appropriately delivered by the private sector.  The way services are provided is due to a series of historical political decisions and compromises.  Adopting these principles does not mean unpicking all of that: we have to look at the current mix of provision and, while being attentive to the considerations I have set out, make pragmatic judgements about the future.

Where private providers are in principle appropriate, the G4S debacle should lead us to ask some hard questions about how contracts are designed and monitored.  Does a public sector that has pulled out of direct provision have the skills and expertise to design good contracts and properly monitor compliance?  Are there sufficient competitors in the market place to prevent ‘too big to fail’ providers posing significant risk?

There are many private providers delivering excellent services all around the country, often in collaboration with public and third sector organisations.  And there are many examples of public organisations failing to deliver and providing terrible customer service.  We should remain pragmatic about this – but we should be much smarter at commissioning, much tougher on compliance and much clearer about where outsourcing is not in the national interest.

Members of the armed forces are shown around the site of the London 2012 Olympics in east London. Photograph: Getty Images.

Rick Muir is director of the Police Foundation

Photo: Martin Whitfield
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Labour MP for East Lothian Martin Whitfield: "I started an argument and ended up winning an election"

The former primary school teacher still misses home. 

Two months ago, Martin Whitfield was a primary school teacher in Prestonpans, a small town along the coast from Edinburgh. Then he got into an argument. It was a Saturday morning shortly after the snap election had been called, and he and other members of the local Labour party began discussing a rumour that the candidate would be an outsider.

“I started an argument that this was ridiculous, we couldn’t have a candidate helicoptered in,” he recalls. He pointed out that one of the main issues with the Scottish National Party incumbent, the economist and journalist George Kerevan, was that he was seen as an outsider.

“I kept arguing for an hour and a half and people started gently moving away,” he jokes. “About two days later I was still going on, and I thought enough’s enough.” 

He called Iain Gray, the Scottish Labour veteran, who interrupted him. “He said, 'Right Martin, are you going to put up or shut up?’ So I filled in the forms.

"Then I had to have a very interesting conversation with my wife.”

One successful election campaign later, he is sitting in the airy, glass-roofed atrium of Westminster’s Portcullis House. Whitfield has silver hair, glasses, and wears a Labour-red tie with his shirt. He looks every bit the approachable primary school teacher, and sometimes he forgets he isn’t anymore. 

I ask how the school reacted to his election bid, and he begins “I have”, and then corrects himself: “There is a primary four class I had the pleasure to teach.” The children wanted to know everything from where parliament was, to his views on education and independence. He took unpaid leave to campaign. 

“Actually not teaching the children was the hardest thing,” he recalls. “During the campaign I kept bumping into them when I was door-knocking.”

Whitfield was born in Newcastle, in 1965, to Labour-supporting parents. “My entire youth was spent with people who were socialists.”

His father was involved in the Theatre Workshop, founded by the left-wing director Joan Littlewood. “We were part of a community which supported each other and found value in that support in art and in theatre,” he says. “That is hugely important to me.” 

He trained as a lawyer, but grew disillusioned with the profession and retrained as a teacher instead. He and his wife eventually settled in Prestonpans, where they started a family and he “fought like mad” to work at the local school. She works as the marketing manager for the local theatre.

He believes he won his seat – one of the first to be touted as a possible Labour win – thanks to a combination of his local profile, the party’s position on independence and its manifesto, which “played brilliantly everywhere we discussed it”. 

It offered hope, he says: “As far as my doorstep discussion in East Lothian went, some people were for and against Jeremy Corbyn, some people were for and against Kezia Dugdale, but I didn’t find anyone who was against the manifesto.”

Whitfield’s new job will mean long commutes on the East Coast line, but he considers representing the constituency a “massive, massive honour”. When I ask him about East Lothian, he can’t stop talking.

“MPs do tend to say ‘my constituency’s a microcosm’, but it really is Scotland in miniature. We have a fishing industry, crabs and lobsters, the agricultural areas – the agricultural soil is second to none.” The area was also historically home to heavy industry. 

After his first week in Westminster, Whitfield caught the train back to Scotland. “That bit when I got back into East Lothian was lovely moment,” he says. “I was home.”

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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