The value of nothing
|By Bram Lebo - Publisher | February 6, 2014
One of the currents crisscrossing the Highlands lately concerns the steady drip-drip of public sector contracts lost by local businesses. It’s an important topic because for most of the year, the public sector is the main source of money coming into the Highlands economy
Add the salaries of municipal and county employees, teachers, healthcare workers, grant-receiving non-profits to all public sector money that is used to purchase goods and services from local businesses, and it’s by far the largest contributor to our economy. Nobody knows how large – and I’ve tried to get that kind of information – but I’d venture to say that at this time of year it’s in the range of 75 per cent or higher. When you add in the CPP, OAS, allowances and benefits paid by the federal government, the figure could be much higher during our long, relatively quiet winter
So when public sector organizations decide to save money, their actions have a serious impact on the Highlands economy. Lately they’ve been forced to, not because of overspending or mismanagement on their part, but because their funding comes from a province that throws away money like a kid in a leaf pile. For the province to continue giving $500 million to offshore power plant investors, and it seems weekly six figure severances to incompetent and/or avaricious Crown corporation employees, it has to squeeze thousands of small towns and organs of civil society to give at least the impression that someone cares about what happens to taxpayer money.
One instrument of this sham austerity is the province’s purchasing rules for public sector organizations, created partly in response to profligate spending and abuse by people working for said province – the vast majority of the culprits within a mile of Queen’s Park. The rules are intended to ensure taxpayers get “value for money” but, perhaps unsurprisingly, have the effect of favouring big companies and often end up costing more.
The first problem is that the province has two contradictory definitions of “value for money”. When it comes to external consultants and executives at Crown corporations, we are told we must pay the absolute top dollar to get the best people, a demonstrably false yet persistent belief. Yet when it comes to contracting out services like transporting non-emergency patients, for example, the argument is that taxpayer money can’t be wasted and the lowest bid is almost always the best value.
Winter road maintenance is a good example of the false economy inherent in these myth-driven policies. In olden times, the plow driver worked directly for the town. If he was late, he’d get a call from his boss. And if he really screwed up, he’d have to face the ire of his neighbours.
More recently, such jobs were often outsourced to local businesses who could generally provide the same services at a lower cost while still making a profit. Though the driver’s accountability was no longer direct, the owner of the business was still a phone call away from the nearest reeve who would be on the horn in no time with a what-for if the job didn’t get done properly. That same owner knew he would also suffer the wrath of friends and neighbours were he ever to leave them skidding on the roads, just as the owner of this paper knows that the local supermarket or community event is fair game for any and all complaints about what you read here or the state of the world in general.
That is accountability.
Today, as part of the drive to save money, our provincial highways are cleared by an Australian-based multinational. In theory, this company is accountable to a government contract and the ministry that signed it. In practice, however, there are no meaningful consequences for poor performance. Do you think the CEO of that company lies awake at night worried if our roads are clear? Do you think that one of our reeves, who represent the people for whom these roads are plowed, can call and get some answers?
Of course not. Genuine accountability has been replaced with the illusion of accountability – along with a ton of paperwork and people dedicated to maintaining that illusion.
The multinational may have offered the best price, but in terms of value we’ve lost two things: service quality and accountability. We’ve also lost the income that used to be earned by local businesses for doing this work, with which they would shop in our local shops; those local business owners would also send their kids to our local schools and make use of our local health services, creating sustainable demand, the bedrock of a healthy economy.
The irony is, when you add up what we lose in tax revenue and local income, and subtract the loss of service quality every one of us can see with our own two eyes, these savings are actually costing us quite a lot. When it takes people or goods an extra hour to get to their destination because the roads aren’t clear, that costs our entire economy. We won’t need hospitals, schools, non-profits and municipal governments if there’s no tax base and population to support them.
It’s a perfect case of knowing the price of everything and the value of nothing.
BRAM LEBO is the publisher of The Highlander and prefersDysart to his hometown of North York. In the spare time he doesn’t really have,he enjoys reading, fishing, DIY projects, and cooking big batches of stuff. Talkto him about politics, architecture and design, fishing, his nieces andnephews, and his worrisome love for his coffee machine