Time to take on outsourcing and privatisation, writes Tom King


Ed Miliband has proven to be at his best when he’s at his boldest and now the Labour leader must rise to the challenge again and take on outsourcing and privatisation, in the same way he tackled Murdoch and the banks.

The “humiliating shambles” that is G4S’s handling of Olympic security presents the perfect opportunity for Miliband to tackle the Tory myth that the private sector is always more efficient; a myth which they have used to justify selling off our public services. It is also a chance to stand up for workers, who are laid off, have their wages cut and working conditions diminished, when their jobs are outsourced or privatised.

Some would argue that standing up against outsourcing would only lead to “Red Ed” headlines, but this move wouldn’t be ideological, it’s just common sense. The public are already on side, overwhelmingly and consistently opposing privatisation. For a leader wanting to contrast himself against an out of touch government, it would be politically shrewd to show that Labour gets people’s concerns about contracting out jobs. After Cameron has signed himself up lock, stock and barrel to the privatisation bandwagon, saying he wants to “create a new assumption” that any public service is up for grabs, he has left himself wide open to being outflanked by Miliband.

However, this is not only a matter of political manoeuvring. The claim that bringing in private companies to run public services is cheaper and more efficient is simply not backed up by the facts. The reality of outsourced contracts is that they provide a worse service and rarely deliver the promised efficiency savings. If costs are cut it is almost always as a result of slashing wages. A recent Unison report found that “the quality, accountability, flexibility, and hard economics of providing services in-house are some of the key benefits that have persuaded even true-blue Conservative councils to drop private contractors and look to their own staff to serve the public.”

Labour councils, who have seen their budgets brutally cut, are finding that by ‘insourcing’ they are able to make savings that mean they can protect vital public services. Labour-run Islington is one such council that has begun bringing services back in-house and by providing refuse collections and street cleaning themselves expect to save £3 million. At a time of austerity, abandoning the neoliberal obsession with carving up our public services between private contractors makes economic sense and the Labour frontbench should be championing those councils who choose insourcing as an alternative to cuts.

Far from being the pinnacle of efficiency, outsourcing has made the quality of public services worse, failed to reduce costs, put jobs, wages and working conditions at risk and, as we have seen in the past week, even led to troops being deployed in East London to make up for the failings of private companies. Now is the time for Ed Miliband to call a halt to privatisation all together, to ditch the neoliberal ideology that pushes for ever more outsourcing and to embrace evidence-based policy which shows that insourcing is the cheapest, most effective and efficient way to provide our public services.


By Tom King