Contracting out services can be a good tool for local governments, but it can’t be done without some thought.
The Cowichan Valley Regional District’s decisions about contracting out demonstrate why it’s important to consider, and in some cases, reconsider when it’s a good thing and when it can do more harm than good to the public purse.
That should really be the purpose behind it, after all. It shouldn’t be a matter of ideology, it must be a matter of practicality.
Will it save the public money?
If not, is there some other legitimate rationale to do it? As it turns out, the regional district has always contracted out a wide variety of their services.
But in one area they pulled back. Curbside garbage collection and recycling was once contracted out.
When something is contracted out by a local government the usual procedure is to go to a tender process.
Various companies and individuals have the chance to put in a bid to provide that particular service.
However, the regional district found when it came to trash that they were only receiving one bid, which they were then forced to accept, whether it was desirable financially or not.
So in order to act in the public interest, the CVRD purchased trucks and is doing it themselves – and saving the taxpayer money.
Governments must be careful when contracting out that it will actually save the public cash, and that service will remain up to par.
Contracting out, done responsibly, can help to share the wealth within a community and
strengthen the business sector.
It is harder to see the value of contracting out to corporations with distant headquarters, where the taxpayer dollars sent to them will largely leave the community for good.
Particularly if they pay their workers, who may be local, a pittance, while the bulk of the cash leaves town to line the pockets of a well-paid management.
Some recent trade agreements aim to disallow governments from considering whether a company is local in the awarding of contracts. It’s important that this discretion remain.