Privatised Public Services works

via Andrew Sullivan

At the American Spectator (arrivistes!) Iain Murray and Matthew Melchiorre report on the success of a privatised fire service in Chatham County, Georgia:

Free riders bankrupted London’s fire insurance companies by taking advantage of their fire services, but the free rider problem is not insurmountable. Had the two services been operated separately, the insurers could have incentivized the purchase of fire company subscriptions by offering clients discounts on premiums. Meanwhile, the fire company could have averted losses by billing non-subscribers for its services. Such a system actually exists today in Chatham County, Georgia, at the Southside Fire Department (SSFD), a privately run and subscription-funded fire, EMS, and security company.

The SSFD began in 1961 with only $10,000 and a handful of entrepreneurial volunteer firemen who bought a fire truck and offered subscription-based fire protection to the residents of the then-unincorporated southern section of the county. Today, the SSFD has a budget of $10 million and provides fire prevention and suppression services to half of Chatham County at a net financial gain to subscribers, as the discount offered on the homeowner’s insurance premium from purchasing a subscription outweighs the cost of the subscription itself.

This is an elegant solution. Lest you think the idea of privatised fire services is the preserve of heartless Randian nutters* in the Deep South, consider that Danish fire (and ambulance) services have largely been run by private companies for more than 80 years. The lesson of this is that public service provision – even of “core” functions of the state – should not be a matter determined by partisan orthodoxy.

I love that last line, it is work repeating. “The lesson of this is that public service provision – even of “core” functions of the state – should not be a matter determined by partisan orthodoxy.”

National aren’t making a good case yet for partial privatisation or even introducing competition to the state sector. If Labour were half competent National would pull back, but they can’t even run a website so fat chance of them holding the government to account.

 


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  • mediatart

    So they pay for the private fire service with a discount on the insurance.

    And in NZ the fire service is mostly paid for by a deduction from …. your insurance.
    Whats the difference ?
    User pays ! cest la vie

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