The B.C. Liberals are ideologically obsessed with privatization. From the Medical Services Plan to hospital catering, from the Abbotsford Hospital to B.C. Rail, from a significant portion of B.C. Hydro to, inevitably, after the next election, the Insurance Corp. of B.C., Premier Gordon Campbell has imposed this vision regardless of consequence — financial, social or otherwise.

From Ontario last week comes a cautionary tale about a privatization process gone awry: A $500-million computer system that apparently cannot perform simple math.

In 1997, Accenture, the Bermuda-based contracting firm formerly known as Andersen Consulting, received a contract from the Conservative government to set up a new delivery system for social assistance in Ontario. The goal, in part, was to make the social services system more cost-effective by expanding the private sector’s role in the provision of government services.

Under the improbably lucrative agreement, Accenture would be paid not only for its time and services but would become a partner in cuts to the social services receiving additional remuneration out of “savings” found in the computer overhaul.

By the time the system upgrade contract was finished in January 2002, Accenture alone received $284 million for the system (their original contract was for $180 million) which has to date cost taxpayers more than $500 million in total. Former Ontario auditor Erik Peters described it as “a bad deal for taxpayers.”

Ontario taxpayers are now finding out just how bad a deal it was. In March, the new Ontario Liberal government announced a three-per-cent increase in social assistance, the first such increase after almost a decade of rate reductions. However, the much vaunted Accenture computer upgrade cannot implement a basic formula change for 12 months.

Conservative ideologues in Ontario bought a payroll system where nobody’s wage could ever change.

In fact, the “outdated” systems Accenture replaced were able to implement the Conservatives’ complicated 1995 cuts to welfare rates in three months, four times faster than the new system. In B.C., a similar rate increase could be implemented in less than a day.

As a result of the system failure, Ontario’s Liberal government has been forced to set up a parallel lump-sum payment system, at considerable cost, to provide the new rate to recipients of disability and social assistance benefits. Worse, the entire system was idled for more than 16 days in the past year alone, costing millions more in lost productivity.

There is a final, almost comical aspect to this fiasco. Accenture is being paid more to solve the problem. Since Accenture built this complicated system, it is virtually the only company able to attempt to fix it.

In 2002, in spite of the condemnation of the provincial auditor, Accenture won a $34-million maintenance contract for the system. According to the Ontario government, it will now cost a further $20 million to resolve the current failure.

Who will be paid for this? You guessed it: Accenture.

You see the Bermuda-based company has refused to fix the problem for free, despite its exorbitant fees. In fact, Accenture Canada chairman Dave Seibel this said: “I feel a great deal of pride in a job well done.”

Here is a company that derived windfall profits from a system whose goal is to support Ontario’s poorest citizens.

And while profits continue to flow to Accenture’s Bermuda tax haven, Ontario’s poorest citizens wait for a $15-a-month rate increase.

“The system is very flexible and you can make changes as and when required,” Seibel states.

Accenture has been granted so much power and control over the social assistance system that it cannot be fired no matter how bad things get. This is a troubling prospect for democratic control of our society and a lesson for British Columbia.

From B.C., the Ontario welfare computer fiasco may seem far away. But remember this: In the most lucrative contracting deal signed and negotiated in secrecy by our Liberal government, Accenture runs the customer service side of B.C. Hydro, overseeing 30 per cent of our province’s most valuable public asset.

This 10-year agreement remains largely secret — copies of the memorandum of understanding released to the public have important sections blacked out. The B.C. Liberals refused to allow a B.C. Utilities Commission review before signing the deal.

In the wake of this agreement, which the premier said would save the Crown corporation $25 million a year, B.C. Hydro is seeking an 8.9 per cent rate increase from consumers, its largest rate increase in decades. In the rate increase application, it has booked no savings from the Accenture agreement.

While the benefits have disappeared like magic, B.C. Hydro has booked $40 million in costs related to the Accenture restructuring and $2.4 million in contract administration fees, largely to police its own agreement.

The latter figure is far from a vote of confidence from Hydro management in the government’s deal with Accenture.

These deals are the triumph of ideology over common sense.

The only question is this: Were premiers Campbell and Mike Harris motivated by a sincere, if misguided, belief in the magic properties of outsourcing and privatization, or is this just a reward for private interests that support their parties and governments?