Economic benefits of public sector provision

Uncategorized Mar 30, 2016 Add a comment

‘The economic benefits of public sector provision’ is the title of a new report commissioned by the RMT union into life-line ferry services in the Clyde and Hebrides.  Written by Jeanette Findlay, University of Glasgow, the report examines the relative merits of the private and public sector bidders in retendering process in relation to the fulfilment of the contract itself and other elements which have an economic value to the island economies and to the Scottish economy. This is done in the context of the Ferries Plan 2013-22 of the Scottish Government. The report notes that the dangers identified in the competitive tendering process since 2005 still pertain including those of ‘moral hazard’ and ‘the Principal Agent’ while observing CalMac Ferries Ltd has operated in an efficient, innovative and  strategic way in the conduct of the contract and has shared with the Scottish Government all the benefits of cost savings. Meanwhile, Serco has an extremely troubled history in relation to its public sector contracts; it has no significant experience in the maritime industry and its financial health and business model raise concerns in relation to any unforeseen aspect of the current contract as it proceeds. CalMac has employment policies and values which are fully in line with Scottish Government thinking in these matters.

The full report can be read at http://www.rmt.org.uk/news/new-report-reinforces-case-for-keeping-calmac-public/

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