Public Services versus Private Companies

Government reforms in health and education are provoking a sharp debate in Britain when private sector companies start running public services. Although this has been going on for some time (e.g. most GP practices are independent partnerships), the NHS hospital at Hinchingbrook and several new state-funded Free Schools are now being run by private companies.

The classic arguments are that businesses are out to make profits while public sector organisations provide services to everyone, irrespective of users’ ability to pay; these are two different worlds and no one should profit from running public services. Proponents of reform argue that private companies are more efficient, and that savings to the taxpayer more than outweigh any profit made by shareholders.

The assumptions that private companies are only out to make a profit, and public sector organisations are always inefficient, both need challenging. Being profitable and providing good services to customers are not mutually exclusive goals; indeed, to earn a profit year after year requires meeting customers’ needs and delivering value for money; this is not to deny the risk that private enterprise can err on the side of greed.

In contrast, public services are less responsive to the needs of their end users precisely because those users are not paying customers. Although many working for public sector organisations have a strong social ethos, it’s easy for the interests of staff and the demands of governments to come first. A target culture and mountains of customer complaints seem to be the inevitable result.

It is in everyone’s interest that public sector reforms reduce inefficiency without compromising on access for the most vulnerable, the range of services available and fair pay and conditions for staff. Crucial to the outcomes of the whole system are the relationships between the people who commission public services, those who provide them and people who use them. Reforms need to reduce the relational distance between these three groups, and the long term success of using private companies may hinge on whether they maintain a collaborative commitment to the health or education system as a whole.

If that is so, perhaps we can have the best of both worlds after all.

(From  today’s FridayFive, a weekly publication of Relationships Global.)

Author: DanutM

Anglican theologian. Former Director for Faith and Development Middle East and Eastern Europe Region of World Vision International

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