Tuesday, September 25, 2012

A pattern of fraudulent behaviour

Last week construction began on a new private prison in Auckland. The theory behind private prisons is that contractual obligations will deliver better outcomes than the normal public service methods. But these depend crucially on contractors telling the truth about their own performance. And the major contractor on the prison project - Serco - has just been caught falsifying its performance data in the UK:

Serco, the leading private contractor to the government, has admitted that it presented false data to the NHS 252 times on the performance of its out-of-hours GP service in Cornwall.

The NHS Cornwall primary care trust (PCT) asked the company to audit itself following an investigation by the Guardian in May, in which several whistleblowers alleged the company was repeatedly so understaffed as to be unsafe and claimed that managers manipulated results when it failed to meet targets.

Serco and the PCT revealed the admission in separate statements on Thursday when a report for the PCT board published online highlighted this and a raft of other concerns about the privatised contract and how it was being run.

As the chair of the UK's health select committee drily notes, "to falsify returns once is once too many – to falsify 252 times represents a pattern of behaviour". The question we need to start asking is whether they are continuing this pattern of behaviour in their New Zealand operations. Serco already runs the Mt Eden Remand Facility, and after an appalling start its performance is reportedly improving (though its worth remembering that the targets are deliberately lowballed so the government can announce success). In the wake of the UK revelations, I think we need to check whether that improvement is real, or the result of fraud. And we need to make sure that there is proper auditing of their "results" in the future.