Profitization of Public Services

Much has been said about the privatization of public services in the past Provincial and Municipal elections. With new councils about to begin budget reviews, it may be timely to look again at contracting. The premise of those in favour of ‘contracting out’ services supplied by the ‘public sector’ is that taxpayers (or themselves) would be better served by businesses that are profit driven. By better served, they mean at lower cost for the same level of service.

Public service workers are obviously against losing their jobs. They point out that they provide the best service because they are not going to cut corners in service delivery to pad the bottom line for some profit-hungry shareholder. Indeed, how could a private sector company give the same levels of service that we have come to expect from the public workers?

Public workers have, if not the best, at least as good equipment as the private companies have. They have all the training necessary to do the job or deliver the service. They purchase materials with competitive bidding. Their managers have the budgets to make this so. They work in an environment that is very conscious of safety, both for the public and themselves. Their wages and benefits are supposedly competitive with the private sector.

That leaves the quantity (cost per unit) of work done as a profit edge for the privatization of services. There is no reason to assume that one person can produce more work than another can just because they work in a different sector.

So why the demand to privatize? Somewhere along the line, over the years, the above comparatives have fallen out of synch. Is the equipment that we provide to our people as good as it should be? One only has to look at the military to see what has happened. Why don’t our public workers have the equipment to properly repair sewers?

Are government workers trained to the level that they should be to do their jobs effectively? If not, was it because there was no incentive to improve?

Does the public service pay competitively for goods and services or are they paying a ‘padded’ rate because suppliers know it is ‘government’ money?

Are public sector wages and benefits competitive with the private sector or only with other public sectors? If not, why not? Were the bosses under no pressure to keep all the elements above under control and competitive? Who are those bosses?

Politicians, those people we just elected, are the bosses or directors, and we, the public, are the shareholders.

Ultra conservative politicians have tried to address the cost of public services by privatizing much of the services formerly provided by government workers. It seemed to be the quickest and easiest solution to their perceived problem. The results have been ‘mixed’ to be charitable.

The front line workers, usually unionized, were the ones to pay with their jobs. In most cases they were not the ones who had created the problem, but were seen as the quick solution. If their wages and benefits had ‘priced’ them as workers out of the market, it was because their bosses had set those wages and benefits.

If the purchasers of equipment, goods and services had paid too much, it was not the fault of the worker, but likely the lack of direction or incentive of their superiors who pushed the cost per unit above the private sector.

If public sector workers are not as productive as their private sector cousins are, then it is lack of proper management or direction. Remember, for a moment, who those bosses and shareholders are.

How do we attain a cost of service / service delivery ratio that is ‘competitive’ with the marketplace? Do we know the standard costs of services provided by our public service workers? At the very minimum, are the Provincial Municipal Performance Measurement Program rates being met or exceeded?

Should we create public / private companies where public service employees work under a sustaining-profit model? (Profits are returned to the public after maintaining and developing plant). Should we set out a time line for these ‘companies’ to meet competitive rates under a standard level of service, and if not met, contract out work or put people in place to make it profitable?

It may be a challenge to make this model succeed, but it can and is being done. The Profitization of Public services may be an answer to those who wish to contract-out our public services. It will mean cooperation and not confrontation between unions and the bosses, but that too, can be done. Perhaps it is time for a new model in providing public services.