Outsourcing justice?

• Date: 01 November 2018
• Published date: 01 November 2018
• Author: Pamela Stapleton,Anne Stafford
• DOI: http://doi.org/10.1111/faam.12159

Received: 2 December 2016 Revised: 12 September 2017 Accepted: 18 January 2018

DOI: 10.1111/faam.12159

ORIGINAL ARTICLE

Outsourcing justice?

Anne Stafford Pamela Stapleton

Universityof Manchester, Manchester, England

Correspondence

PamelaStapleton, Manchester Accounting

andFinance Group, Crawford House, Alliance

ManchesterBusiness School, Booth Street West,

ManchesterM15 6PB, England.

Email:pam.stapleton@manchester.ac.uk

Abstract

The paper takesan institutional logics theoretical approach to exam-

ine how an outsourcing scandal of overcharging for electronic mon-

itoring of offenders was managed so that, despite public outrage,

government was able to maintain its outsourcing policies. Using

secondary data archival sources in the public domain, it examines

the actions of the contractors and state agencies. The paper shows

how organisations with different logics became co-dependent and

worked together to resolve the scandal. Market logics were tem-

porarily reined back and state logics emphasised as the contractual

environment was stabilised. But ultimately their purpose was pro-

tection of the markets logics-drivenpolicy.

KEYWORDS

electronic monitoring scandal, institutional logics, oligopoly, out-

sourcing

1INTRODUCTION

Although there are significant variations in the extent to which different countries have adopted the new global

paradigm, towards the end of the twentieth century, an international shift was evident in public management style

from policymaking to management skills and an emphasis on outputs not process (Hood, 1995). As part of this long-

term agenda, which successive UK governments haveadopted enthusiastically, various mechanisms have been imple-

mented to involve the private sector in public infrastructureand service delivery, with the aim of reforming UK public

services and improving value for money (NAO,2013a).

Generallygoverned by lengthy and complex legal contracts, the specific mechanisms include short- or medium-term

outsourcing arrangements, which are the focus of this paper,and long-term public–private partnerships (PPPs). These

mechanisms facilitate (or force) association between individuals and organisations from previously distinct environ-

ments. The potentially conflicting profit-making motivations and culture of the private sector and the service ethos of

public sector professionals become affiliated, although the underpinning force at work is the deeper logic of the eco-

nomic system (Cole & Cooper,2006).

Although popular with governments, the contracting industry and their advisors, the outsourcing and PPP type

mechanisms have also proved to be controversial and emotive.In particular, public sector workers and the public are

often uneasy that profit is a driving factor in the delivery of public services, particularly if terms and conditions of

employment and service quality are perceived to have dropped. In particular,media attention has alerted citizens to

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2018 John Wiley & Sons Ltd wileyonlinelibrary.com/journal/faam FinancialAcc & Man. 2018;34:336–353.

STAFFORDAND STAPLETON 337

stories about expensive projects and project amendments, poor performance and even scandal. However, and this is

perhaps surprising, the broad policy of involvingthe private sector has proved resilient in the face of these political sen-

sitivities and evidence about problems. Projects that have underperformed against their promises persist (Humphrey

& Miller,2012) and despite a number of high-profile failures and scandals, the momentum of the PPP and outsourcing

policies appears unstoppable (Bowman et al., 2015).

This paper explains this paradoxof unstoppable momentum by arguing that government is so determined to main-

tain the outsourcing game as a policy option that it actively manages high-profile scandals in order to maintain the

credibility of the outsourcing policy. The paper uses an institutional logics theoretical approach because outsourcing

contracts are an example of facilitating (orforcing) association between individuals and organisations from the previ-

ously distinct environments of private and public sectors. The term institutional logics was coined by Alford and Fried-

land (1985) to label the beliefs and practices inherent in institutions in modern western societies that were sometimes

contradictory.Thus, the theory enables a focus on the effects of differentiated institutional logics.

The paper uses secondary data archival sources in the public domain to focus on the financial aspects of a specific

high-profile contracting case that became a national scandal. Using institutional logics, the paper seeks to explain the

actions of the individuals and organisations as they responded to the public furore while the story unfolded. The paper

initially addresses two research questions about the actions of the chief actors – (i) the relevant state agencies and (ii)

the contracting companies. This leads to our third research question: do these actions suggest that scandal is managed

so that government can continue to pursue outsourcing policies in the face of public concern?

The research method is to examine the specific case of complex outsourcing contracts awardedby the Ministry of

Justice (MoJ) in 2005 to two competing private sector companies, G4S and Serco, to provide an electronic monitoring

service for offenders in the community. These contractsattracted huge publicity in 2013 following allegations of bad

practice and mismanagement affecting financial probity and some limited publicity surrounding allegations affecting

public safety and fairness to offenders.

The paper proceeds as follows. The second section provides background about the social context of the criminal

justice system of which the monitoring contracts form one part. This section also provides information about the two

contractingcompanies and explains how the contractual and oversight arrangements are intended to work. It also iden-

tifies some concerns from the literature about the practice of similar prior arrangements. The third section briefly

outlines the institutional logics framework of the paper. A fourth section presents a brief outline of the scandal as it

exploded into the public domain and this is followed by an analysis of the responses from keyactors. The final section

offers our discussion and conclusions.

2BACKGROUND

The following background information, divided into two sub-sections, has been put together after extensive searches

of information in the public domain, drawing largely upon archival government and press sources and some academic

case study material. We focus on the main actors in the on-going mismanagement of the tagging contracts and their

termination: the MoJ and the two contracting companies at the heart of the scandal.

2.1 The MoJ and the criminal justice system

The criminal justice system broadly covers the police service, judiciary, prosecution service, courts, legal aid, prisons

and the probation service. Of these activities, the MoJ is responsible for the courts, prisons and the probation service.

About 10% of the probation service's budget is dedicated to the electronic monitoring contracts, on which the gov-

ernment spent about £700 m between 2005 and 2013 (Criminal Justice Joint Inspection, 2012). The criminal justice

system is overseen by four separate inspectorates – one each for Crown Prosecutions, Police,Prisons and Probation.

These inspectorates describe themselves as independent, although they are funded by the MoJ. Theyalso frequently

conduct joint inspections, under the auspices of Criminal Justice Joint Inspection. Joint inspection tends to focus on: