One of the features of the neoliberal revolution has been the outsourcing of public service delivery, usually to not-for-profits, sometimes to profit-making entities like private hospitals. Whanau Ora is an extension of this. Two recent stories have exemplified the risk of this model.
First, there’s Hekia Parata’s mates, the Taeaomanino Trust. A family outfit with no track record and, seemingly, inadequate internal records keeping and spending checks, the Trust is typical of many organisations contracted by Social Development and Health. And it is the ideal breeding ground for corruption – all this money flowing in from the ministry, often nebulous performance goals, and a bunch of mates or family running the operation. It seems that $100,000 of our money has gone missing from the Trust’s coffers and the Police are investigating. Nonetheless, the Trust has just been handed a million dollar Whanau Ora contract. Whanau Ora is only going to see more of these organisations putting their hands out and more public money being spent on surprisingly large salaries and expense accounts for little practical outcome.
So, the first problem with the model is that small organisations that are prone to corruption are being handed public money. Within ministries and departments that risk of corruption is countered by the professional culture and the checks and balances that large, established institutions have, which small, new ones lack.
Second, there’s the Otaihape Health Trust in Taihape. Ruth Dyson has been doggedly asking questions in the House about this for months. Otaihape is contracted by the Whanganui District Health Board to provide a wide range of health services to the Taihape population: “its 24-hour access to PRIME-trained registered nurses, its medical beds, its in-patient palliative care, its respite care and day-care services, its maternity services, its meals on wheels, and its mortuary service”. Insufficient funding in the Budget has forced the DHB to make cuts, and its contracts for non-DHB providers has been a logical place to start. Initially, the Otaihape nurses were told they would have to take a 30% pay cut or the centre would close (it’s effectively a hospital, even the Minister called it that when denying any threat of closure). Now, the Trust is definitely going under and the people of Taihape stand to lose all those health services. Tony Ryall’s response: “The Ōtaihape Health Trust is not owned by the Government”. In other words, ‘not my problem if they can’t operate within their budget’. Never mind that his government sets the DHB’s budget, which contracts with Otaihape, so he directly set this chain of events in motion.
So, the second peril of outsourcing is it gives a government a means to cut services by stealth simply by reducing the pool of money for contracts to private providers.
The neoliberals claim this model is all about efficiency – competing outfits bidding for public contracts gets better value for money. As if there are multiple health providers sitting around in Taihape trying to outbid each other. I dare say the cost of the tendering and contracting processes outweighs any supposed efficiency gains.
But you can see why it’s attractive to a government, particularly a bad government, to get someone else to do the actual work. It removes the immediacy of responsibility for the government (much as the DHB system does) – the minister and the ministry can just throw up their hands and say ‘there’s nothing we can do, it was the private provider!’
What if instead, and I know this is a wild thought, we actually care about delivering good value for money services to those in need then we should want those services delivered by accountable, perpetual public institutions.