Sustainability, outsourcing and market failure!

Busy couple of days as I fly out of Liverpool for our National Council gathering in Belfast. On the eve of the event we have an APSE strategic forum on sustainability at Belfast Castle and this turns into an excellent debate on the use of wind energy.

Kevin McCullough the Director of NPower renewables addressed the dinner and pointed out that 50% of the available wind power amongst the EU's 27 member states was situated around the UKs shores, with a significant amount of this off the Northern Irish coast. He called for more open and streamlined planning processes and a greater recognition of the potential that exists.

I leave early the next morning to participate in a Public Finance debate on the future of outsourcing held at Westminster. The meeting is loaded with a number of people who have gained significantly from the outsourcing of public services and have much to lose if this changes in the future.

John Tizzard of the centre for partnerships opens with his views on the commissioning agenda and Keith Sonnett from UNISON responds. Both point to the lack of research on the benefits of outsourcing. I allow the debate to develop for a bit before feeling the need to intervene when the propaganda starts to get too unbalanced. A participant from SERCO waxes lyrically about research they have completed that shows the multi million pound benefits of outsourcing. I point out that other research exists that demonstrates market failures. It's fair to say that not everyone in the room was pleased at me bringing some balance to the debate! Despite the fact that these lobbyists are paid handsomely by their organisations to promote an orthodoxy you would think they would welcome some test of their theories.

Some strange myths exist about local authorities doing everything themselves and not involving the private sector. I have been in local government for 25 years and in all of that time at least 50% of local authority budgets have been spent with private companies through supplies and services. I have no problem with private provision where appropriate and where it adds value. However, I do have a problem with people telling me that the answer to all the public sectors ails is to abandon the improvement agenda and outsource service provision.

You would think people would have learned something over the last few months. Basically we have a monumental failure in private sector markets that creates massive damage to the economy of the country, the Government therefore intervenes by bringing forward public sector expenditure in an attempt to repair the problems created by the markets failing, this leaves public finances extremely tight between now and 2015 and therefore the answer to the long term financial crisis in the public sector is to outsource public services to the market. You couldn't make it up!