Public Service Privatization

Comprehensive Audits Needed in Privatizing Services

`Faster and cheaper’ cannot be the only considerations when evaluating proposals for delivery of public services, stressed panelists at a Summit workshop on the privatization of public services. For example, a desire for less expensive prisons in some cases has led to insufficient rehabilitation programs, sentences served far from home and family and occasional outright abuse of non-violent offenders by violent inmates in the same jail.

The breadth of public services recently privatized or under consideration for privatization is increasing dramatically. Dennis Houlihan, a panelist and researcher with the American Federation of State, County and Municipal Employees (AFSCME) AFL-CIO, pointed out that while major infrastructure projects like highway construction have been contracted out for years, information technology services are now being privatized in many states.

Wisconsin state Rep. Spencer Coggs noted that many programs currently being touted for privatization involve those with little voice in the political process, primarily welfare recipients and prisoners. Legislators must stand for these issues on behalf of those who cannot or do not.

Some states have enacted quality control measures for privatizing public services. Massachusetts implemented a law which permits state employees to bid competitively with private sector proposals.

Participants recommended the establishment of independent audit mechanisms to assess the economic impact and quality of service on privatized industries and the involvement of employees in the bidding and management of privatizing industries.