A surface analysis of the language around privatisation could lead you to think Government’s and bidders relish competition and hold a view that competition always makes things cheaper. However, such a practice would be ridiculously naïve and the opposite of policy direction in other parts of the public sector. If supply of professionals is limited those paying for them usually work together to avoid the staff driving up the price. They do this by maintaining common standards – both by encouraging national bargaining with national unions and also by controlling contract prices with the private sector. In short, they operate a political cartel.
Unless the Government afford CRC contracts the necessary lift to match proposed NPS rates they will risk a pay war between the CRCs and the NPS and fundamentally destabilise any new operating model they’re envisaging post 2020.