I was shocked at first, but then a cursory check of wikipedia revealed that this kind of thing has been going on for years all round the world. For a second there I thought maybe the UK was leading the way in 'innovative' privatisations: http://en.wikipedia.org/wiki/Private_police_in_the_United_States Anyway, it is new to the UK at least. You can always tell when the Tories are back in power eh? They are currently trying to privatize the NHS, public education and now the police too, I'm getting Thatcher flashbacks. I think in recompense we ought to be allowed to have all the awesome 80's/90's comedy back too.
Huh, didn't know about South Carolina. I thought it was mostly limited to private prisons. That wikipedia page is apparently home of libertarian cranks; I laughed at the unironic reference to Murray Rothbard. The reasons they're "cheaper" are straightforward - no unions, fewer protections of individual rights/sueability, and lower levels of service.