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

Getty Images.
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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.