Report finds PPPs flawed - PS News online - 8 April 2015 - Public Service Association

Report finds PPPs flawed – PS News online – 8 April 2015

An international federation of public service unions has published a report into Public-Private-Partnerships which finds privatisation of public assets and services to be “fundamentally flawed”.

The report, Why Public-Private Partnerships (PPPs) don’t work, by the Public Services International Research Unit (PSIRU) assesses the experience of PPPs in countries both rich and poor.

According to the report, there is a contradiction between the euphoria surrounding PPPs and the poor performance these instruments have offered in the past 30 years.

General Secretary of the Public Service Association of NSW (PSA), Anne Gardiner said: “It’s not just the privatisation of the electricity network that people in NSW should be concerned about.

“This Government is currently outsourcing more and more essential public services like disability care, public housing and even human resources and finance functions.”

The PSIRU report proposes a public alternative to this system, in which national and local governments can continue to develop infrastructure by using public finance for investment, and public sector organisations to deliver the service.

This gives the public sector a number of advantages, according to the report, as the sector gains greater flexibility, control, and comparative efficiency – because of reduced transaction costs and contract uncertainty, as well as economies of scale – and the efficiency gains of more democratic accountability.

Deputy General Secretary of PSI, David Boys said public services were massive pools of potential corporate profit, and PPPs serve to access them.

”The ‘clients’ are captive, the services are often monopoly,” he said.

General Secretary of PSI, Rosa Pavanelli said many governments were still turning to PPPs in the hope that the private sector would finance public infrastructure and public services.

“However, experience with PPPs shows that privatisation is a fundamentally flawed mechanism,” she said.

“We must remember that private sector corporations need to maximise profits if they are to survive. This is incompatible with ensuring universal access to quality public services, especially for those unable to pay these profits.”

The NSW Nurses & Midwives’ Association (NSWNMA), PSA, Australian Services Union (ASU) and Electrical Trades Union (ETU) have welcomed the new report, saying it supports their “growing concerns” about the increased privatisation occurring in NSW.

Assistant National Secretary, Public Services for the ASU, Greg Mclean said: “Members of the ASU are very proud of the public services they provide, from water and electricity services, public transport, local government and more.

“They and their communities know jobs and services will go with less money invested back in the communities if essential public services are privatised.”

The full report can be found at this PS News link.

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