Shock Horror. Private companies rip off the state!

Is anyone really surprised by the audacious scale of ‘over-billing’ and ‘phantom offenders’ that have led to G4S being referred to the serious fraud office? It looks pretty damning that at worse this is serious fraud and at best downright incompetence on the part of G4S unable to get their invoicing married up to work actually carried out. But this unveils the real problem with outsourcing.

The hidden costs of effective contract management can swamp any supposed ‘efficiencies’ but without proper contract management the public sector is exposed to overcharging, non-compliance on the contract operation and possible fraud. So the incompetence in this instance is not just on the part of G4S but on Government who let the contract in the first place.
http://www.guardian.co.uk/business/2013/jul/11/g4s-investigated-overcharging-millions-pounds

Labour can’t take any joy from this scandal being exposed under the coalition because it goes to the very heart of the New Labour Government’s own contract arrangements. Politicians seduced by big business are seemingly oblivious to the hidden costs of outsourcing preferring instead to buy into the mantra that the private sector can deliver efficiencies that the public sector can't.

It’s a new labour orthodoxy as much as a Tory one and this latest scandal goes one step further to bursting the bubble of deception. Outsourcing costs the public purse.