Alternatives to Civil Service
Historically, it was taken for granted that public services would be delivered by a staff of career civil service employees, working within the structure of centralized public agencies budgeted with appropriated funds. Today, none of these are true - public programs are more than likely performed by alternative organizations or mechanisms rather than by public agencies;(2) and when public agencies are used, they are more likely to be staffed by contingent workers hired through flexible employment mechanisms rather than permanent employees protected by civil service regulations and collective bargaining agreements.(3)
Alternative Mechanisms for Delivering Public Services
Purchase-of-service agreements with other governmental agencies and non-governmental organizations (NGOs) have become commonplace. For example, Metropolitan Dade County, FL now provides fire and rescue services to almost every small-and medium-sized municipality in Dade County (the exceptions are the cities of Hialeah, Miami Beach and Miami). These arrangements were negotiated because they offer persuasive advantages for Dade County and municipalities. For Dade County, there is the opportunity to expand services within a given geographic area using economies of scale. For municipalities, the arrangement offers the opportunity to reduce capital costs, personnel costs, and legal liability risks. In addition, because fire fighters are heavily unionized, it offers the opportunity to avoid the immediate political and economic costs associated with collective bargaining.
As another example, many local governments contract with individual consultants or private businesses to conduct personnel services such as employee development and training.
The use of outside consultants and businesses (hired under fee-for-service arrangements on an "as needed" basis) increases available expertise and managerial flexibility by reducing the range of qualified technical and professional employees that the agency must otherwise hire to provide training. The costs of service purchase agreements may actually be lower than the same function performed by in-house personnel, in that the government agency pays no personnel costs or associated employment taxes and reduces its own legal liability risks.
Privatization is the performance of a formerly public function by a private contractor. It differs from service purchase agreements primarily in philosophy and scope. While service purchase agreements contract for delivery of a particular service to a public agency, privatization means abolition of the entire public agency, replacing the infrastructure with an outside contractor who then provides all services formerly provided by the public agency. Privatization has become commonplace over the past 15 years because it offers all the advantages of service purchase agreements, but on a larger scale. Privatization has become commonplace in areas such as solid waste disposal, where there is an easily identifiable "benchmark" (standard cost and service comparison with the private sector), and where public agency costs tend to be higher because of higher pay and benefits.(4) But privatization is spreading rapidly in other areas that have previously been almost entirely the prerogative of the public sector: schools and prisons.
In 1994, the school board of a working-class Pittsburgh suburb was facing desperate problems. It had the highest tax rate in the county; only one of 40 students who took the Scholastic Achievement Test in the year from June 1993 to June 1994 scored above the national average of 950 on math and verbal test results; and the number of high school graduates plummeted from 225 in 1978 to 60 in 1994. It sent layoff notices to teachers at one of four schools and hired a Tennessee company to pick its own teachers and run the school. Not surprisingly, it made this decision over strong opposition from unionized teachers and school administrators, who intimated that the purpose was union-busting rather than educational reform. …