Virtual-councils: A threat to democracy?

I've seen this one coming for long-time. Ever since my former employers shifted several departments over to Capita with talk of the option of more in the future I had an inkling that councils of the future would consist of just a nucleus of key professionals and managers in an overseeing and strategic role. Front-line work would be carried out on a by staff working for a private sector contractor. Now what is being dubbed the 'virtual council'seems several steps closer to reality.

There are arguments, mainly economic, for this move. Cost-control becomes the responsibility of the contractor and council managers become free of the tiresome jobs of setting up and maintaining the systems and structures which will support their aims; instead they simply issue a diktat and leave the messy practical implementation side to someone else. At this point of course we come up against a economic argument against outsourcing; In a relationship governed by contracts any changes will need to be written into the contract, a costly business.

I don't intend to dwell on the economic however, what concerns me more is the philosophical. In particular the ethos of public service and of democracy.
Many people I worked with were driven by a desire to serve their community often the result of deeply held beliefs both religious and secular in origin. It is why they chose a career in social care rather than a potentially more financially rewarding option. Would this ethos survive in the culture of a private company and would the field be worse off for its disappearance?

Secondly there is the democracy argument. At no point in its history have the links between the public, council officers, and the elected representatives been more opaque and more tenuous. I read some time ago a piece about the proliferation of call centres in local government. Rather than improving contact between the public and those who serve them the article argued that contact centres actually made things worse by preventing the public from directly accessing officers. All this is bad for democracy and its bedfellows of transparency and accountability. Will a fragmented network of contractors make this already worsening situation worse? Will we know who to hold to account when things go wrong or when things happen which we don't agree with; or will our elected representatives shield themselves behind the likes of Capita?