Public sector or private companies?

[fruitisbad]

public sector done properly. there are too many corrupt people at the top. competition is great to keep people on their toes and stop things stagnating, but business driven soley by the bottom line, profit, does the public no good.

[Tony]

Very little business is driven solely by the bottom line. This concept is a myth.

[Stan Tamudo]

Very little business is driven solely by the bottom line. This concept is a myth.

 

What does that mean?

[HeadingNorth]

Which is where it all goes wrong

 

That makes no sense. Are you suggesting that people should provide services for free and not expect to earn a living?

[Stan Tamudo]

That makes no sense. Are you suggesting that people should provide services for free and not expect to earn a living?

 

Loads of folk do this, my parents take care of our children buck-shee.

[Jim Graham]

Do we really want private companies taking over the public sector?

 

I really can't see how it saves money.

 

The government cuts the public sector, then gives the money it saves (ie our taxes) to a private company to do the same job. How does that save?

 

It seems there's nothing that they won't outsource to companies like Serco Ae4 etc. But all private companies care about is profits and dividends for themselves and share holders, not quality of care for the customers.

 

Should things like health care, police, education etc turn a profit?

 

It's not like any money saved is returned to the government or the tax payers, it goes into the pockets of the already rich.

 

 

 

Your problem is not with private companies running public services, your problem is an ideological hatred of anyone making a profit.

 

You are wrong on just about every assumption you make about private companies so I am guessing you have never worked for one.

 

1. Profit is a motive but long term contract relationships are even more important. Ever heard of open book accounting? I doubt it.

 

2. Well written and managed contracts can produce savings for tax payers, better quality for customers and a reasonable return for the contractor. It just rarely happens because the public sector are so inept at everything they touch. Vested interests make sure they write contracts that can't and won't deliver savings.

 

3. Tens of thousands of private companies already make profits from supplying public services so why all the fuss now?

 

Your last point about money going into the pockets of the already rich is so daft it doesn't warrant a comment.

[retrogo]

Well the biggest private sector is the banks.......................

[Mecky]

That makes no sense. Are you suggesting that people should provide services for free and not expect to earn a living?

 

Why doesn't it make sense?

[I1L2T3]

Well written and managed contracts can produce savings for tax payers, better quality for customers and a reasonable return for the contractor. It just rarely happens because the public sector are so inept at everything they touch. Vested interests make sure they write contracts that can't and won't deliver savings.

 

So basically it doesn't work and you want more of the same.

 

The processes, structures, governance and contracts are always loaded in favour of suppliers. That doesn't happen by accident.

[Jim Graham]

So basically it doesn't work and you want more of the same.

 

The processes, structures, governance and contracts are always loaded in favour of suppliers. That doesn't happen by accident.

 

 

 

I'll try and explain why some contracts favour suppliers:

 

The public sector has a stranglehold on many of the activities that are being opened up to competition. Consequently, there often isn't a lot of expertise outside the public sector (PS). To encourage companies in you have to make it worth their while trying. The tendering process alone can cost a company millions of pounds. The theory is that once you have opened up a function to competition you can bear down on the cost by fixed term contracts retendered every so often.

 

The problem with the theory is that some functions require a lot of investment and private companies want a reassurance that the investment will be worthwhile. That's what happened with the train companies who were given short contracts but expected to stump up millions for new trains. It just wasn't commercial for them and that's the problem with the PS making the contracts. They just have no idea what is and what isn't a good commercial deal for either side. you only have to look at some of Sheffield's 25 year deals to see how bad they are for the tax payer. And that's where a lot of the criticism of comercialisation of the PS comes from. Rightly so.

 

The rush for competition and privatisation produced some terrible deals for tax payers. Political interference made things worse. There is more experience now and the PS should have learned from it but I am not holding my breath. The Tories make bad deals in the rush to get it done. Labour just make bad deals. End of.