Failures of outsourcing (i.e. privatization) public services to private companies

When Outsourcing Public Services to Private Companies Goes Wrong
By Mike Ludwig, Truthout | News, Wednesday, 11 December 2013

“The breadth and depth of what can go wrong when we hand over public services to for-profit corporations is staggering”

“- As Truthout has pointed out in the past, private jail and prison contracts often include “occupancy quotas” that require state and local governments to maintain high occupancy levels in facilities or pay fees for empty beds. A recent report by ITPI found that 65 percent of for-profit state and local prison contracts include such quotas. Such contracts run counter to many states’ goals of reducing prison population and increasing inmate rehabilitation.”

♦ ♦ ♦

*NEW REPORT*

OUT OF CONTROL: The Coast-to-Coast Failures of Outsourcing Public Services to  For-Profit Corporations
In the Public Interest, December 2013

imgres“Eager for quick cash, state and local governments across America  have for decades handed over control of critical public services and assets to corporations that promise to handle them better, faster and cheaper. Unfortunately for taxpayers, not only has outsourcing these services failed to keep this promise, but too often it undermines transparency, accountability, shared prosperity and competition – the underpinnings of democracy itself. As state legislatures soon reconvene, policy makers likely will consider more outsourcing proposals. Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations serves as a cautionary tale for lawmakers and taxpayers alike.

Recommendations

Transparency

·         Regularly post online how much taxpayers are spending on private contracts and how many workers are employed by those contracts — the same way government must report these things for public work.

·         Require any company being paid with tax dollars to open its books and meetings to the public, just as government does.

Accountability

·         Ensure that every contract includes sufficient staffing levels for oversight to make sure taxpayers are getting what they pay for.

·         Ensure that every contract includes language that allows government to cancel the contract if the company doesn’t live up to its promises of quality and cost savings.

·         Prohibit any company that has evaded taxes or broken the law from taking over public services.

·         Require a thorough cost analysis of all bids and guarantee taxpayers a minimum 10% savings before any service is outsourced.

Shared Prosperity

·         Require companies that privatize public services to pay their employees a living wage and provide reasonable benefits.

·         Require a study to determine how outsourcing would affect the larger community and post the results online before any contract is signed.

Competition

·         Require competitive bidding when a contract is up, rather than automatically renewing it.

·         Ban contract language that guarantees company profits.

·         Ensure that public service workers have the opportunity to submit their own plan to save money and provide quality services.”

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