G4S Olympic fiasco prompts ministerial rethink about private sector involvement in massive projects

Janet Downs's picture
There were many heroes in London’s Olympic Games: the athletes, the volunteers, the organisers and the backroom workers. Among these were the police and military who stepped in at the last moment to provide security when the private firm contracted to do this failed to do so.

Defence minister, Philip Hammond, told the Independent that the G4S fiasco had demonstrated that private firms are not suited to providing many public services.

Many contributors to this site have warned about the dangers of allowing private firms to provide education and eventually run schools for profit. Although the private sector is essential for providing the materials which schools need: books, stationery, equipment and so on. But it’s a step too far to allow private firms to provide the education. The need to make a profit could lead to a poorer service:

• Untrained instructors;

• Minimal training for instructors often given on-the-job;

• Increased use of short-term contracts for teachers and instructors leading to less long-term commitment by staff;

• Schools in chains enforcing the same teaching materials and methods to take advantage of economies of scale. This may be an efficient business strategy but it would lead to heads having little autonomy and schools becoming like McDonalds;

• Excessive use of computer-based instruction ;

• Schools sending out subtle hints that they don’t want particular children: the disadvantaged or those with a lower level of attainment.

• Schools being provided in unsuitable buildings or with little space for sport.

Supporters of profit-making schools say that parents are free to choose - schools would have to compete with each other to attract customers. This may work in a city but won’t in less-populated areas where there is only one school. Freed of the guidelines for curriculum, standards of buildings and professional staff, the school could use its monopoly to milk the school for profit.

It is dangerous to allow services to vulnerable people to be out-sourced to private firms. Bradford has recently taken back control of education in the city from Serco whose ten-year contract ran out last year. Secretary of State, Michael Gove, has said that he would be happy to see firms like Serco run schools but Channel 4’s Dispatches programme on fat cats was critical of Serco’s involvement. Profit-making firm, Cognita, was accused of putting profit before education at the Southbank International School. For-profit welfare-to-work companies have been accused of fraud – allegations against A4e forced the resignation of its chairman, Emma Harrison, who was also the Government’s “families tzar”. The Commons Public Accounts Committee concluded in 2011 that the Private Finance Intitiative (PFI), a Conservative idea enthusiastically endorsed by Labour and still being used by the Coalition for the refurbishment of dilapidated schools, looked “like a better deal for the private sector than for the taxpayer”.

Yet the Coalition is committed to an ambitious outsourcing programme worth £4 billion. This prompted an HSBC analyst to write: “The UK’s austerity programme is entering a more fruitful phase for outsourcing companies”. We have been warned.

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