Comment: why is outsourcing wrong?


With the memory of the G4S debacle at the beginning of the summer still sore, today’s news that the government plans to outsource huge swathes of the probation service will be met by cynicism and concern.

Chris-GraylingBritish government use of the private sector to run services has had a difficult history. However, the justice secretary Chris Grayling still aims to hand control of low to mid level offenders to private companies and charities. The most high-risk offenders will continue to be the responsibility of the public probation service.

The contracts will be run on the basis of “payment by results” and will be offered to private companies and charities.

Some may urge that it is not right that the aim of lowering re-offending rates could become motivated by profit. This moral objection argues that the probation service is a public good that should not be a means for private companies to gain profit.

However, this objection in itself is not very powerful. I think most people would accept that if the private sector delivered a service at a much higher standard than the state and there was no major associating problem, then it would be correct to outsource. For example, farm and food production are necessary for the public good but very few people would argue that the state should collectivise food production (it is also worth pointing out that most people would agree that the state still has a role to play by enforcing standards and regulations).

A slightly different point is that treatment of very vulnerable people like those in prison should not become an area for profit making. In their bid to make profits, companies will treat prisoners like cogs in the machine and less compassionately. But, there is no reason to think that a state probation service and the targets slapped onto it from on high, is necessarily better in this regard. Ultimately, the greatest good for offenders will occur if they are rehabilitated.

Of central importance is whether the private or charity sectors are better when it comes to rehabilitating prisoners. As it stands 58% of offenders sent to prison for less than a year, re-offend.  For issues as significant as public safety and rehabilitation, good evidence is required to believe the proposed changes would do better.

The “payment by results” scheme is being piloted, but the results have not been made public; it is difficult to say whether such a scheme works.

As Shadow Justice Secretary Sadiq Khan has said:

“Payment by results in criminal justice is untested, and the Tory-led government are taking a reckless gamble with public safety.

“Pilots were already under way to see if payment by results worked and to ensure any problems were ironed out before being rolled out. The new justice secretary, Chris Grayling, is demonstrating breathtaking arrogance in choosing to ignore the pilots.”

For a party that is founded on the idea that a government should be weary of change for change’s sake it is surprising that the Conservative party are pursuing something that has so little evidence underlying it.

A further problem is that the distinction between low to mid risk offenders and high-risk offenders is not clear-cut.  As Geoff Dobson of the Prison Reform Trust writes:

“The proposed model fails to recognise that circumstances can change abruptly. Thus, someone who is deemed to be of low or medium risk could suddenly become high risk, and staff in the contracted organisation may not be equipped to recognise that and, even if they did, would then presumably need to arrange a hurried transfer back into the public sector. This could be a bureaucratic nightmare, with public safety under threat.”

Another significant issue is what happens when a company fails to deliver and the state is left to foot the bill. For example, G4S failed to fulfil its contract for the Olympic Games and soldiers had to be brought in to fill the gaps. If organisations that take over the probation service fail then the consequences for offenders and the public will be drastic. Of course it will be the state and the public that will ultimately pay for higher re-offending rates. It will also be offenders who are let down by such a failed privatisation policy.

In conclusion, it can be said that such a proposal requires greater research and that any move to introduce such radical outsourcing should be resisted. There are very serious problems that could occur if the coalition’s policy fails and there is not enough evidence to support implementing it.

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  • http://www.facebook.com/alex.swatton Alex Swatton

    I detest this narrative that perpetuates the myth that the private sector can always do a better job. Ultimately G4S et al will merely cut costs by lowering staff wages / benefits etc – and we continue the ‘race to the bottom’. Skilled workers, such as those in the probation service are capable I’m sure – dealing with human rehabilitation is an holistic issue and every year the ‘success’ rate will vary to suit whatever argument. Another policy driven on ideology with no actual proof – don’t we remember how ‘successful’ the privatisation of the railways were? When will they ever learn…

  • http://www.facebook.com/alex.swatton Alex Swatton

    I detest this narrative that perpetuates the myth that the private sector can always do a better job. Ultimately G4S et al will merely cut costs by lowering staff wages / benefits etc – and we continue the ‘race to the bottom’. Skilled workers, such as those in the probation service are capable I’m sure – dealing with human rehabilitation is an holistic issue and every year the ‘success’ rate will vary to suit whatever argument. Another policy driven on ideology with no actual proof – don’t we remember how ‘successful’ the privatisation of the railways were? When will they ever learn…

  • http://www.facebook.com/alex.swatton Alex Swatton

    I detest this narrative that perpetuates the myth that the private sector can always do a better job. Ultimately G4S et al will merely cut costs by lowering staff wages / benefits etc – and we continue the ‘race to the bottom’. Skilled workers, such as those in the probation service are capable I’m sure – dealing with human rehabilitation is an holistic issue and every year the ‘success’ rate will vary to suit whatever argument. Another policy driven on ideology with no actual proof – don’t we remember how ‘successful’ the privatisation of the railways were? When will they ever learn…

  • A Bit Annoyed

    At what point do we decide that there is to be no division between what could be regarded as the responsibilities of a democratically elected government and the interests of an undemocratically elected ‘corporatocracy’ , where ‘government’ is simply a facilitating body for the re-distribution of taxes to unaccountable multinationals whose primary motive is maximising shareholder value? Where do those taxes go if commercial confidentiality decrees that surpluses are now profits and can be (legally) squirreled away in offshore tax havens? Are we to accept that shareholder dividends, private sector salaries for executives and private sector bonuses are good value for money even if paid for out of our pockets? Look at how much ‘influence’ (power?) corporations have in determining policies relating to finance, pensions, food, fuel pricing, transport, utilities and infrastructure. Just who’s in charge here? Why not privatise the civil service and armed forces, recognise that MPs are in thrall to the lobbyists and realise that the age of representative democracy is on its way out. Not that most people would care.

  • http://www.facebook.com/jim.crowder2 Jim Crowder

    So what is the limit to the private sector and what should the state ringfence so it alone can perform those services? It is a debate well worth having.

    In the 60s, we thought that the state should run the airlines, oil companies, computer manufacturers, motor manufacturers, steel manufacturers and much else. We tend to think differently now, but how much? What shouldn’t the state do, and how will it be paid for? These days, government even pays for computers and cars from foreign companies.

  • http://twitter.com/ladyroisin LadyRoisin

    What concerns me is that, as any small business-owner will tell you, to cut costs you cut out the middle-man. Tories saw the NHS as a non-commercial-interchange commodity, with these non-commercial links up for grabs for money to be made. We must decide what sort of society we want – one where taxes are legally and lawfully paid to support the young in education, the sick to health and the vulnerable, plus, as co-operatives the trains to run on time, the energy supplied to be renewable and clean, and the law changed so company officers are not tied to get ‘the most profit’ but to ensure the company fulfils its csr, environmental and community obligations….. Noblesse used to oblige….no longer….

  • blarg1987

    Be interesting to see if they can really cut costs as vested interests claim they can or will they reduce staff pay and conditions, if they do the latter then surely that shows how efficent the state actually is?

    Trouble with outsourcing is that it creates new “back office jobs” that the media so detaste as they need contract monitors, people to write the contract, re tender the contract every so many years etc all of whcih costs money but conveniently swept under the carpet.

    What will happen is that when contracts are written their will be clauses in it to make it contractor friendly with hidden closts and state costs inflated to justify outsourcing (just like PFI). Theey will then run the service for several years trying to do as little as possible as the contract is a loss leader. Their will be complaints about the contract and when it comes to renewel the costs will be alot higher, but their will be no internal bid as “it will cost to much to bring it back in house”, so the bids will be higher then if kept in house and we will pay more for a less cost effective service.

    The trick here would be for LFF to do research into other contracts that have gone the same way to show how much less they could possibly cost if kept in house, this should then be sent to the media and will be interesting to see how the goverment will hide that elephant in the room :).

    Also it would make sense to ensure safe guards are written in so that no MP who votes for this is allowed to work directly or indirectly for the said company after “retiring” from politics, will wonder how many MP’s will then say this will bee value for money :).

  • Newsbot9

    The major problem I see is that people with complex needs will get little help, and easier cases concentrated on…

  • http://twitter.com/getbrightfuture Bright Future

    There are a number of serious issues that come with outsourcing and scenarios such as the G4S debacle hasn’t helped. However, there are some great advantages to outsourcing if you use the right company. Bright Future are aiming to get British businesses to keep their IT development outsourcing onshore and do this by training apprentices to a level where they can provide a great service. By doing this it keeps the outsourcing cost down and you don’t get the troubles (geographical, language barrier) that you get with offshore outsourcing.

  • http://hallmitchell.blogdetik.com/2013/05/29/there-are-several-benefits-for-a-company-that-outsources-its-software/ Bernard Best

    I read this post and i always say outsourcing is right choice for any business to more growth in current market.