WWhile Britain hedges its bets on a mass vaccination program and battles a new variant of the coronavirus, daily life in New Zealand and Taiwan has been slowly returning to normal. There are numerous reasons why these countries did better during the pandemic, but one of the main reasons why the UK has fared so poorly in comparison is the government’s decision to outsource large swaths of its pandemic response to the sector. private.
The ministers’ decision to outsource both testing and tracing, awarding contracts worth millions of pounds to companies such as Deloitte and Serco, has been a fiasco. These rulings are not unique to Great Britain; in the Italian region of Lombardy, for example, 40% of all healthcare providers are privately owned. Because primary and preventive care are less profitable, the region suffers from a chronic insufficiency of both. As a result, hospitals have overloaded during the pandemic, while many wealthy Italians have turned to private clinics to pay for Covid-related care.
The pandemic has disproved a myth that has been sold to us since the reigns of Margaret Thatcher and Ronald Reagan: that private companies are more effective at delivering services than clumsy state bureaucracies. For the past 40 years, governments have outsourced public services, from welfare benefits to prison management and public transport. Privatization is not always wholesale; In the NHS, for example, the process has been slow and partial, with competitive bidding introduced in the 1980s, followed by the domestic market in the 1990s.
Arguments against privatization tend to center on companies not providing good service. But there is a more insidious problem at play. Even when governments fail to fully sell public assets, there is a fundamental conflict between democratic values and the privatization of public services. In large societies, people’s ability to govern themselves democratically is based on a system of functional representation. Governments are elected to represent citizens, who in turn should be able to influence elected governments.
In a democracy, we want those who provide public services to make decisions on our behalf. When public services are outsourced, decisions are made by private companies (for-profit or not-for-profit), rather than by elected representatives. It is doubtful that the private sector can ever act in a genuinely representative capacity; after all, we don’t choose companies. Private companies are not the same as public officials; they have their own objectives to pursue, as well as fiduciary obligations to shareholders. In fact, acting out of private interest often means simply not acting on behalf of a democratic public.
Governments often turn to private companies and institutions because they lack the capacity to perform certain functions on their own. When it emerged that management consultants were charging the government up to £ 6,250 a day to work on the UK’s Covid testing system, the Department of Health and Social Care said these consultants had ‘the specialized skills and experience that we need”. But outsourcing does not help in this matter. If a state can’t provide services, it probably won’t be able to adequately regulate private contractors either. The more services a government delivers to businesses, the more people and resources it must muster to oversee these myriad deals.
That does not happen. After all, privatization is often part of cost-cutting campaigns, and drastically cutting public budgets only makes it difficult for governments to regulate contractors. People often argue that the problem with privatization is that governments do not guarantee that their contractors comply. However, it is not delivery or details that are the problem, but the very logic of privatization: the more a government hands over its functions to the market, the more it loses the ability to do things itself and hold contractors accountable.
The result of this is often cronyism, as we have seen during the pandemic, with ministers awarding contracts for PPE and medical supplies to companies that had ties to the conservative party but no substantial experience in this field. However, even when it does not result in venal corruption, privatization alters the distribution of political power in a democracy. The more governments depend on private companies, the more those companies can urge politicians to enact policies that do not benefit citizens.
An equally important but less noticeable result is how this process renders the government invisible to its citizens. When Serco was awarded a contract to track Covid in the UK, for example, it then outsourced the service to 29 other companies, subcontracting of 85% of jobs. Amid such complex networks of different providers, the role of the government is obscured. The end result is what has been called the “submerged state.” As more public spending is filtered through private companies, citizens no longer see it as public spending and the state is hidden from view. If the government is invisible, how can we expect people to trust the state or be willing to support it through their taxes?
This not only creates confusion about who is responsible for what, but also produces civic apathy. When people do not see their own government as the main provider of the benefits they receive, they have little reason to worry about the government’s goal.
Democracy depends on elected representatives exercising political power in a transparent manner. It depends on whether political influence is distributed among citizens, rather than concentrated among private companies. And it depends on an attentive and politically engaged public who can see and care about the government’s goal. But privatization corrodes all of these things and diminishes people’s ability to govern themselves democratically.
The threat of utility outsourcing is not just that it is often more expensive, more inefficient, and less effective. It is that it undermines the very possibility of democracy. For societies whose healthcare systems are privatized or who outsourced large functions of their responses to Covid-19, the pandemic should be a moral and political reckoning. No part of this will be more critical than the slow and difficult job of reinventing what a democratic state, capable of acting on behalf of the public, should look like. Nothing less than the fate of democracy depends on it.
• Chiara Cordelli is associate professor of political science at the University of Chicago and author of The privatized state (Princeton University Press)
Digsmak is a news publisher with over 12 years of reporting experiance; and have published in many industry leading publications and news sites.