Rodney Hide discusses privatisation vs the state in the prison sector in his NBR column.
The Left were gleeful. The free market a failure. The private sector demonstrably about cost-cutting and profit, not service. The government’s privatisation policy wrecked.
Me? I’m waiting for the results of the review before declaring capitalism dead, turning my back on 250 years of economic knowledge and crossing to North Korea.
Besides, what’s really on display is the Left’s woeful understanding. People and organisations in the private sector aren’t better than those in the state sector. It’s rather that poor performance is weeded out in the private sector. And that’s precisely what’s happening with Serco. Its fee is cut and it’s at risk of losing the contract.
That’s precisely how it works. That’s what contracting out is all about: Perform or else.
I would have thought the swift dealing to was evidence of the wisdom of contracting out. What happens when the state sector fouls up? Invariably it’s a systems fault, no one has their pay docked and no one is fired. The state sector staggers on to the next mess up.
Besides, there’s no options with state sector management. Ministers are stuck with the people, the system, the organisations. There is no talking tough and no talk of sacking.