Editor’s comment: Who benefits from outsourcing of Hackney’s housing services?

Hackney Town Hall. Picture: Ken Mears

Hackney Town Hall. Picture: Ken Mears - Credit: Archant

Cllr Sharon Patrick’s report into contractors playing the system to squeeze extra cash out of Hackney Council gives the lie to the notion that outsourcing represents good value for the public.

In its manifesto last year, Hackney Labour pledged to review every service it had farmed out to the private sector with a view to bringing them back in-house.

And it isn’t the only one – Haringey, Islington, Westminster, Barnet and Camden have made moves to take back control (sorry) of their own various functions in the last 12 months, ending partnerships and contracts in some cases dating back years.

In some places, only the odd service is being taken back; elsewhere, entire housing operations (CityWest in Westminster; Partners for Improvement in Islington) will not be renewed.

There are good private firms and bad ones, just like there is both selflessness and corruption within the public sector.

But the myth that efficiency is a natural product of privatisation and outsourcing ignores the fact that companies bidding for public contracts don’t necessarily have any motivation beyond their own bottom line – and that value can be measured in more ways than that.

What is also worth considering is why Hackney outsourced these contracts in the first place.

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It may have been ideological: PFI was very much a flagship neoliberal policy in the early part of the century.

Or it may have been a lack of spare cash to spend on the prohibitive outlay of doing a job properly in-house, even when it would easily save money in the long term.

Just like the poorest people relying the most on unscrupulous lenders with ridiculous interest rates, squeezed councils are more likely to get themselves into costly private contracts that ultimately land them further in debt.

Cui bono?