At Least Some Good

Over on Comment is Free, Neil Clark writes:

The next time you meet one of those free-market ideologues who tells you private companies are always more efficient than the public sector, don't bother to get involved in a lengthy argument. Instead just use the example of G4S. G4S, which describes itself as "the world's leading security solutions group", was given a lucrative £284m contract to supply more than 10,000 security staff to work at the Olympic Games.

Now, two weeks before the opening ceremony, G4S tells us it needs additional help to meet its obligations. The testimony of those who tried to get a job suggests incompetence on an enormous scale. "I went for an interview and was sent for security vetting. I was then told I had passed screening and vetting and that I would hear back from them," Darius Athill told the BBC. "I was sent contracts and given a login to a website, which didn't work. After calling a helpline and waiting hours to get through they had no idea what I was talking about."

Meanwhile, a whistleblower who worked with G4S has claimed there is a "50%" chance of a bomb being carried into an Olympic venue when the Games begin because of insufficient training of staff. G4S, for its part, denied there was a problem and said that all staff would be prepared for the Games. Perhaps the only surprising thing about the G4S Olympics fiasco is that anyone should be the least bit surprised by it. For it's only the latest in a series of mishaps to involve private companies. Arguably the most serious was the fate of Angolan asylum seeker Jimmy Mubenga, who had been in Britain for 16 years and who died while in G4S's custody in 2010. Yet despite its track record, G4S continues to rake in money. Its turnover has almost doubled since 2005 with the percentage of its revenue coming from government contracts rising to 27% in 2011.

G4S are not the only outsourcing company which appears to have displayed spectacular incompetence. More than 50 prisoners have escaped from custody while travelling with Reliance, which provided transport for the Scottish prison service. Its £25m a year contract to provide transport to the Scottish Prison service was transferred to G4S in 2011. In August 2008, PA Consulting, a private sub-contractor to the Home Office lost a computer memory stick containing highly confidential data of 84,000 prisoners in England and Wales. Also in 2008, the vice president of ETS was forced to apologise for the chaos caused after hundreds of thousands of children in Britain finished the school year without receiving their Sats results.

Yet despite the evidence that outsourcing and privatisation, far from improving efficiency, actually does the opposite, the coalition still seems hell-bent on reducing the public sector's role. Police privatisation is well under way: in April two-thirds of the civilian staff working for the Lincolnshire police force transferred to ... you've guessed it – G4S. Private companies are taking over functions that should be left to the state. Unlike the public sector, private companies have one aim: profit maximisation which means cuts in staffing levels and trying to do everything on the cheap. That's why efficiency falls when public sector work – like transferring prisoners to court, or looking after important data – is transferred to the private sector.

Labour, if it's smart, will use the latest shambles to pledge that when it returns to government it will not only halt any further privatisation and outsourcing, but that it will bring back "in-house" functions of the public sector which have been transferred to private companies over the past 20 years. If the G4S scandal does manage to derail the drive towards more privatisation and outsourcing, then at least some good will have come of it.