Shadow of a government: It’s time to reframe the private-public conversation


There are public conversation loops that seem to take on lives of their own.

One, that gained traction in the 1980s and 1990s, runs along the lines of “the only good government is a small government”. It’s a viewpoint that is often used for contracting out services. It’s also become an easy way for politicians and others to take a swipe at the public sector without much personal consequence (for example, through arbitary caps on the public service).  While it has been over 30 years since the rhetoric of “smaller government” first came in vogue around the world, its spectre remains.

As the Project on Government Oversight describes the US situation: “The use of contractors to provide services to the federal government has grown dramatically since the start of the last decade...  The move to ‘smaller government’ by outsourcing work has in fact created an enormous shadow government of contractors that are largely or entirely dependent on taxpayers for their revenues.”

In the UK, the Smith Institute notes in Outsourcing the cuts that the UK now has a “mature” public services outsourcing market, “with 30 years’ experience of contracting public services out to the private and voluntary sectors”. Since 2010 the pace of outsourcing has increased and is considered by some to be a “historic shifting of public sector functions and services to third-party business process outsourcing providers”.

Does privatisation work? As the Smith Institute notes, “the debate and evidence on outsourcing is deeply polarised. While business groups provide evidence of the potential savings that outsourcing can bring and argue that contestability can drive up performance, trade unions and public campaigns point to the failures of high-profile contracts, strong evidence of market ‘gaming’ behaviours and a lack of convincing evidence that outsourcing saves money or improves services.”

There’s also evidence that outsourcing means that workers are doing the same roles that used to be within the public sector at reduced wages and with less security.  

While some New Zealand governments have seemed to giddily adopt the “smaller government” belief system, in recent decades New Zealand has been more wary when it comes to privatisation than the US and UK – and for good reason. As the recent Serco-managed Mt Eden Prison debacle illustrates, private not only doesn’t mean better, it can mean far worse. At best, current outsourcing models often mean trade-offs in terms of accountabilities and transparency. It also means that services that are based on the bottom line instead of the public good.

We think it’s time to reframe the discussion and acknowledge there are differences within the private, community and public sectors. Whereas the old “smaller, more efficient government” rhetoric has “make do with less” as its underpinning driver, we believe there’s a need for the discussion to centre on how the sum of the work of the public, private and community sectors can be greater than the individual parts. It’s time to think bigger – bigger issues that require bigger solutions.

In her recent Axford fellowship, Jill Ozarski shared her findings on mutual benefit opportunities for primary industry and the Department of Conservation (DOC) to operate public-private partnerships. As she noted, DOC only has 1800 employees and an annual budget of about $385 million – that’s pretty slim numbers to manage and protect our conservation estate.

Under the “smaller government” rhetoric there might be an agenda that by introducing public-private collaborative efforts DOC would require fewer resources, but that’s unrealistic in an agency that’s already considered by many to be underfunded. It’s also counterproductive and small thinking in terms of carrying out DOC’s mission to protect and manage our conservation estate.

As Ozarski writes in her report:  “In an age of declining budgets – faced by both New Zealand and US resource agencies – a frequent jaded view of partnerships is that they can help backfill for reduced agency budgets. While agencies may be under-resourced, that is not the most compelling reason for partnerships. The reality is much more inspiring. Many who care about preserving natural resources, solving environmental problems, and restoring the world’s biodiversity have realised that conservation must involve more people and occur across traditional property line boundaries.”

True collaboration between the private, public and community sectors can lead to powerful and enduring ways to address some of New Zealand’s most wicked problems. That’s where the conversation needs to be centred – not on making government smaller, but on making New Zealanders’ lives better.