46. Outsourcing Part III: Domestic Security

Outsourcing domestic security is a costly and risky way to “reduce” governmental expenditures on the military, the police, the penal system and even health care. The truth is, as I have analyzed in the first two blogs on national security, that outsourcing is driven in part by the profit motive but also by politicians driven by ideological positions. The outsourcing of prisons, air traffic controls, or even policing military facilities by such giant companies as G4S and Serco ultimately tends to undermine our security rather than consolidate it.

These companies, whose executives are far more skilled at winning highly profitable government contracts than in providing acceptable levels of service, appear ready to take on any activity, irrespective of their qualifications. For example, in the UK an outsourcing group has been offering investors an 18% return on their money on the care of disabled, disturbed, or needy children in residential homes. As the writer Polly Toynbee observed: “Now troubled children are an investment opportunity.”1

The increasingly contentious relationship between the Police Federation and Prime Minister David Cameron’s party has been driven in part by the ever greater desire to reduce the power and the costs of those doing the policing. London’s police force is paying £500 million ($800 million) a year for back office functions which have been transferred to private sector groups. The police contend that their federation has been subjected to a Tory-led campaign of denigration. Cameron insists he wants to “release the grip of state control,” but he is in danger of giving up his nation’s security to a few firms that may become “too big to fail” and will run out of anyone’s ability to control them.

The speed of the outsourcing revolution in both the UK and the US has been phenomenal: Outsourcing deals in the public sector in the UK went up by 168% in the first quarter of this year.2 The companies involved focus more on the contract they want to win than on implementing its fulfillment. Those hired at the lowest fees available often lack training, skills or the understanding essential for security. Let us look at the growing trend to outsource the penal system in both countries:

The very idea that privatizing prisons, so that corporations can make money from those being incarcerated, seems patently immoral. I am not alone in this: The U.S. Presbyterian Church, the United Methodist Church and the Catholic Bishops of the South have all called for a moratorium on the construction of private prisons or for their outright abolition. (Admittedly, a few people exploiting society’s larger social problems for their own gain is also part of the deeper problem underlying the entire capitalist steam-roller.) The influence of this for-profit prison industry in the US has now come to be described as the “prison industrial complex.” Its power has been attacked by criminologists, economists, religious and community leaders, human rights activists, and even correctional officer unions. The privatizing of prisons has led to a revolving door between public and private correctional institutions which minimizes the usually required disclosure of public-private ties.

Critics claim that private prisons don’t save the state money because, like any other business, they try to maximize their profits. This leads to a reduction of essential services within the privatized institution. Staff costs, medical care, clothing and food are all kept to a minimum — affecting the inmates, the staff, and the correctional aspects of the institution itself. Studies suggest that the smaller staff levels and inadequate training at these prisons has led to increases in violence, riots, and escapes. Assaults on guards by inmates were almost 50 per cent more frequent in private prisons than in government-run ones, according to a nationwide US study which claimed that assaults on fellow inmates were 65 per cent more frequent in these outsourced prisons. Apparently correction officers may also be in charge of smuggling drugs and even weapons into their prison in order to earn more money. This is hardly the way to improve national security!

A 2014 study3 revealed that minorities make up a greater percentage of inmates in private prisons than in public ones. Privatizing (outsourcing, in effect) of prisons threatens to re-institute the link between race and commerce of slave-trading days: 50% of prisoners today are African-American, 35% are Latino and only 15% are White. In part this may be because it is cheaper and more profitable to incarcerate blacks than whites! The for-profit prison operators, like the GO and CCA groups, are able to select these lower cost inmates “through explicit and implicit exemptions written into contracts between these private prison management companies and state departments of correction.”

Perhaps one of the most corrupting aspects of the private prisons in the southern states is the historically racist practice of “Convict Leasing.” The historian Alex Lichtenstein pointed out that “only in the South did the state entirely give up its control to the contractor; and only in the South did the physical “penitentiary” become virtually synonymous with the various private enterprises in which convicts labored.”4

Cindy Chang, a reporter for The Times–Picayune wrote in May 2012 that Louisiana now had the highest per capita incarceration rates in the world. The hidden engine behind the state’s growing private prison machine has been profit. A majority of Louisiana inmates are housed in for-profit facilities which must be supplied with a constant influx of human beings or the prison industry in Louisiana would go bankrupt. If inmate counts fall, profit is reduced and the state’s powerful prison lobby ensures this does not happen by thwarting nearly every reform that could result in fewer blacks being convicted.

Meanwhile, Louisiana’s prisoners subsist in dire conditions. Each inmate is worth about $25 a day in state money and sheriffs trade them like horses, loaning any surplus inmates to colleagues whose prisons may not be not full. Thus a prison system that leased its convicts as plantation labor in the 1800s has come full circle and is again a nexus for profit. This is a national disgrace. In the past two decades, Louisiana’s prison population has doubled, costing taxpayers billions while New Orleans continues to lead the US in homicides.

This sordid account shows how public officials profit from prison privatization as it allows them to act with minimal accountability. It also reveals that private prisons do not make those that vote for them more secure. A 2011 report by the American Civil Liberties Union pointed out that private prisons are more costly, more violent and less accountable than public prisons and contribute significantly to the extraordinary increases of incarceration in the US.

Among the leading players in providing a wide scope of outsourced security is Serco with 120,000 workers in the US, the UK and 37 other countries. Serco has more than £4 billion in contracts with Britain’s ministry of defense. It jointly runs crucial security operations at Britain’s nuclear weapons facility at Aldermaston, trains pilots for the RAF in Lincolnshire, manages the UK’s ballistic early warning system on the Yorkshire moors, monitors traffic on England’s motorways as well as much of its air traffic control.5

However, Serco is still dogged in the UK by revelations that it had billed the government for electronically tagging prisoners who had died, were back in jail or did not exist. For this security “lapse” it had to repay around £70 million ($110 million) to the government. Britain also cancelled the projected privatization by Serco of three Yorkshire prisons. Serco’s latest embarrassment has been the way it tried to keep secret allegations that one of its male care workers at Yarl’s Wood, Britain’s largest immigration detention center for women, had sexually assaulted a Pakistani. Lawyers for Serco, arguing for keeping the story out of the public sphere, insisted there was a public interest in not disclosing the confidential report on the case.6

G4S (“S” standing for the controversial Securicor Corporation) is the principal outsourcer in the UK, where it employs 45,000 workers out of a global total of some 650,000. Its last minute failure to provide sufficient security guards to patrol the 2012 Olympics in London, forcing British armed servicemen to be brought in as replacements, badly stained its reputation and that of the surveillance industry. It is significant that three of G4S’s top executives in the UK have departed in the past two years over scandals which have rocked the world’s biggest security firm. Keith Vaz, chairman of the House Affairs select committee in Parliament said that “We should not be giving out contracts to companies that have let the country down.”

The larger question is: Does any government really need to outsource the security of the nation and its inhabitants? My answer in these last three blogs is a loud “NO!” Security matters should be out of bounds for outsourcing companies. There are powerful political groups in both the US and the UK that are driven by the belief that private is always better than public and have persistently denigrated the basis of public service. These forces, like the right wings of the Republican Party and of the Conservative Party, are also motivated by the fact that there are substantial profits to be made by outsourcing and almost none in maintaining an effective public service. In conclusion: outsourcing security has meant higher costs to the taxpayers, substantial profits to the outsourcers, and less security and worse service for the state. The time has come to end it.


1The Guardian, May 13, 2014, p.29

2The Arvato UK Quarterly Outsourcing Index.

3Holland, Joshua “Higher Profits Explain Why There Are More People of Color in Private Prisons,” Moyers & Company, February 7, 2014

4Lichtenstein, Alex, Twice the Work of Free Labor: The Political Economy of Convict Labor in the New South’, Verso Press, 1996, p. 3

5Jill Treanor, “Outsourcing,” The Guardian, May 2 2014, p.35

6Mark Townsend, “Serco,” The Observer, May 18, 2014, pp.8-9



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