Dan­gers of out­sourc­ing

Kapi-Mana News - - OPINION -

Ac­cord­ing to free mar­ket ad­vo­cates, the con­tract­ing out of cen­tral and lo­cal government ser­vices to pri­vate providers is all but bound to pro­duce bet­ter and less costly out­comes.

Re­al­ity can dif­fer though, as the Novo­pay teacher pay fi­asco in­di­cates.

Cer­tainly, there was time aplenty to get it right. Aus­tralian firm Ta­lent2 won the Novo­pay con­tract back in 2005. The new sys­tem was bud­geted to cost $189.5 mil­lion over 10 years and, in ef­fect, a four-year run-in time ex­isted for the project proper.

Ev­i­dently, all of this was to no avail. Fig­ures re­leased in the New Year show that at that stage 7899 peo­ple had been un­der­paid or not at all, 6000 were over­paid and 581 paid on be­half of schools for which they did not work.

Not count­ing the costs in­volved in try­ing to cope with the er­ror-plagued sys­tem, schools have had to ad­vance $560,000 from their own re­serves to cover the mis­takes.

Welling­to­ni­ans will have the Novo­pay ex­am­ple fresh in their minds as they con­tem­plate the ar­rival of Kevin Lav­ery, the city coun­cil’s new chief ex­ec­u­tive.

Lav­ery, a 52-year-old English­man of Ir­ish de­scent, was for­merly chief ex­ec­u­tive of Cornwall Coun­cil in Eng­land.

When head­hunted, Lav­ery was on the los­ing end of a lo­cal dis­pute over Cornwall Coun­cil’s plans to pri­va­tise some ser­vices, in­clud­ing IT and li­braries.

In fact, the Welling­ton op­por­tu­nity arose the day af­ter Cornwall Coun­cil had voted to re­move its Con­ser­va­tive leader, Alec Robert­son. He had been Lav­ery’s chief ally in the bat­tle over plans to cre­ate a joint ven­ture with a pri­vate com­pany to pro­vide coun­cil ser­vices.

‘‘I wasn’t really look­ing to leave . . . it kind of came out of the blue,’’ Lav­ery told the Cornwall me­dia a cou­ple of weeks ago.

‘‘ If I’m hon­est about it, I got an ap­proach from a head­hunter the day af­ter Alec Robert­son was ousted, so prob­a­bly they caught me at a time that I was feel­ing a bit unset­tled.’’

Since his ap­point­ment as Welling­ton’s chief ex­ec­u­tive was an­nounced in midDe­cem­ber, Lav­ery has been at pains to stress that many of the con­tro­ver­sial ini­tia­tives in his old job had been vir­tu­ally forced on him by cut­backs in coun­cil fund­ing ini­ti­ated by the Con­ser­va­tiveled government of Bri­tish Prime Min­is­ter David Cameron.

‘‘It’s not me try­ing to be the­o­log­i­cal about out­sourc­ing,’’ Lav­ery told The Do­min­ion-Post.

For some, such a com­ment would be far more re-as­sur­ing if Lav­ery hadn’t pub­lished a book in 1999 called Smart Con­tract­ing for Lo­cal Government Ser­vices that zeal­ously sings the praises of com­pet­i­tive out­sourc­ing.

In prac­tice, any ap­petite that Lav­ery may have for con­tract­ing out coun­cil ser­vices – with all the re­lated job im­pli­ca­tions for coun­cil staff – may have been less cru­cial to him land­ing the job in Welling­ton than some of his other skills.

On his ar­rival in Cornwall in 2008, Lav­ery was thrown in the deep end of cre­at­ing and man­ag­ing a new uni­tary author­ity that re­placed the former Cornwall County Coun­cil and six district coun­cils.

It seems rea­son­able to ex­pect a su­percity amal­ga­ma­tion (and as­so­ci­ated job cuts) could be on Lav­ery’s agenda here, as well.

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