While the government’s decision to outsource its on-the-ground contribution to the fight against Ebola in West Africa to Aspen Medical has drawn criticism of the company, it is merely a continuation of the steady shift of government service provision to the private sector, especially in health, defence, jails and immigration. Call it the Sercoisation of service delivery.
After an extended period of confusion, including multiple reports it had approved the dispatch of Australian healthcare workers to West Africa, the government abruptly changed course last week and announced Canberra health service company Aspen Medical would be paid $20 million to provide hospital services in Sierra Leone, with 80% of the staff to be sourced locally. Aspen currently has no staff trained to deal with Ebola.
Since 2007, Aspen has secured over $300 million worth of federal government contracts for the provision of health services locally and offshore, the bulk of it from the Department of Defence, although its biggest payday is providing health services to Australian Federal Police staff in the Solomons. As this glowing Canberra Times report explains, the company was formed just over a decade ago to take advantage of outsourcing of services by Britain’s National Health Services, but quickly found success back in Australia at the state level.
The $20 million Ebola contract wasn’t put out to tender, either open or limited: according to Aspen CEO Glenn Keys, the government approached Aspen last week — i.e. in the 72 hours before the announcement — after it and other companies had provided information about options for treatment. So why was Aspen chosen ahead of other private or non-profit bodies, especially when Aspen doesn’t currently have any role in dealing with Ebola in West Africa? Why wasn’t an open or limited tender process used, especially given the size of the contract? Some have pointed to the presence of former Liberal health minister Michael Wooldridge on the board of the company. Aspen is also represented in Canberra by Liberal-aligned lobbyists Barton Deakin, but Aspen’s greatest successes in federal outsourcing came during the Labor years.
The presence of a figure like Wooldridge at such a company is standard: companies that specialise in government contracts tend to have former politicians, senior civil servants or military officers on their boards or at executive level (Keys’ CV includes a “distinguished career in the Australian Army”). The UK outsourcing behemoth Serco has a number of former senior civil servants and military figures on its board (in Canberra, Liberal-aligned lobbyist David Gazard represents it), as does Serco Asia-Pacific, its local arm, in its executive team. Even with the Ebola contract, Aspen is only a tiddler compared to Serco’s Australian operations: since January alone, Serco has secured over $220 million in contracts from the federal government. And while Serco is best known as the operator of Immigration detention centres, this year virtually all of its revenue has been from the Department of Defence, to which it provides everything from catering and clothing to base support and infrastructure maintenance services here and overseas.
The ethos behind Serco and other large service providers like International Health and Medical Services ($3.7 billion in contracts in the last six years) is simple: the private sector can deliver any government service more cheaply than the public sector, and the firm with the best connections to government and the public sector is best placed to secure contracts. But, conversely, they also offer the benefits of disconnection: if someone is murdered while under the care of a service provider, or contracts a life-threatening illness, or is sexually abused, or there is a failure that leads to injury, damage or financial loss, it’s not the fault of a politician or even of a public servant. Responsibility is safely outsourced to the private sector, beyond the reach of normal accountability mechanisms. The benefits of outsourcing are political as much as financial.