Privatise the fire brigade!
Tonight is Bonfire Night. That night of the year where some people celebrate Guy Fawkes’ failure to blow up the Houses of Parliament by almost burning down their own and where the government spends money on advertising that reminds us that fire is hot. However, the possibility of people’s houses burning down tonight was far more real until a few hours ago, with the London Fire Brigade threatening to go on strike. Whilst we should be thankful that the union has realised the ludicrousness of their position, if we are to make sure that one good thing should come out of this, it should be that a debate is (re-)opened as to how fire protection is provided.
The IEA released a discussion paper by Jennifer Anne Carlson entitled The Economics of Fire Protection: From the Great Fire of London to Rural/Metro in 2005 examining this issue. In it, she looks at a 200-year period of London’s history where it was the private sector that recognised the need and provided fire protection to London’s residents. The business models were often not adequate and consequently the correct incentives were not created, leading to the eventual bail-out of many firms in the mid-1800s by the government – the government continuing to provide the service to this day. However, until a few hours ago we were in the situation where London was not to be protected on the busiest night of the year. London’s residents had no option to shop around for competing services, but instead merely hope that they were not unfortunate (or, in some cases, reckless) enough to need the fire brigade’s services.
It is surely inconceivable that any employees of a private fire company would choose to go on strike on their busiest night of the year; fully aware that, were they to do so, their customer base and consequently their company and their jobs would soon be going up in smoke. However, because we have no ability to opt-out, London Fire Brigade and its workers could threaten to walk out safe in the knowledge that when they returned their customer base and their jobs would still be there, funded by the Greater London Authority through undisclosed proportions of our council tax money.
Different privatisation models exist successfully in other countries and there is no reason why they couldn’t work here. Rival companies offering yearly subscriptions for fire protection, for example, would allow for proper competition on price and for innovation and best-practice to be sought. The incentives to buy a subscription would be strong – not least because firms offering home insurance would most likely offer discounts to protected properties – and the public would crucially retain the option to shop around or opt-out entirely. If I had a subscription to the London Fire Brigade, for example, it’s unlikely I’d have been renewing it had the strike gone ahead; after they would have singularly failed to provide me with protection on the one night of the year when I could fully expect to see flaming missiles careering over the roof of my house.
As Carlson concludes, “Privatisation works when the business model employed provides the appropriate incentives”. The government should view this latest union standoff as an opportunity to reassess public sector fire protection, and open its mind to the idea of privatised alternatives. I’m sure the private sector wouldn’t see firms ceasing to provide fire protection on, of all nights, Bonfire Night.