|low graphics version | feedback | help|
|You are in: Talking Point|
Friday, 29 June, 2001, 11:25 GMT 12:25 UK
Private-public partnerships: Will they work?
The government has come under fire from an influential think-tank over its plans to increase private sector involvement in the running of schools and hospitals.
The drive is part of Tony Blair's ambition to create world class public services during his second term in power.
Private-public partnerships are intended to bring the resources and skills of the private sector to the provision of public services.
But the Institute of Public Policy Research (IPPR) argues that while public-private partnerships have worked in some areas, there is no evidence they are suitable for hospitals and schools.
Is Tony Blair right to have faith in the private-public partnerships? Will they work?
This Talking Point has now closed. Read a selection of your comments below.
To assume PPP means the NHS will be fleeced by private firms is naive at best. I worked for various computer companies who made most of their money doing work for the public sector (I'm sorry to say) when contracted on a project-based basis which the NHS already employs. At least a private firm sub-contracting or outsourcing projects will be far more selective and concerned with cost-effectiveness and may be better at leveraging international resources/expertise than the current NHS.
Here in Belgium the mutualities do not cover all medical treatments.
I know many people that have to take out top-up assurances in order to pay for treatment of cancer etc. Whether it is PPP or completely State run, the patient at the end of the day has to pay. This is where in Britain we have a problem, as most people still think that everything is free. Until the country understands the economics of life it will never find a solution. Perhaps Mr Blair's third way is so different that I could prove to be wrong?
This is just a politically acceptable way of not raising tax to improve services, rather people will have to pay extra to get the services. Shame on Tony Blair!
How about applying the principles adopted by private companies to the public sector (or at least well selected ones)? An example would be to incentivise the staff by offering bonuses for good performance, cost cutting etc. At least this way, the government can stay in control and avoid a service decline that was witnessed with the rail privatisation. It is clear that many people feel uneasy about simply allowing the private sector into certain areas, as the need to please shareholders is far too high. Combine the strengths of both sides and surely we'll have a winner!
Privatise the entire health system, and give us back all the tax we pay for it. Then make fully comprehensive private health insurance compulsory, just like car insurance. Regulate (which is all the government should do anyway) the insurance companies, insist on one person one price, and if people are poor then they can have part or all of that insurance paid for them. But for God's sake get rid of the civil servants and career politicians. I can't see how schools-for-all can be successfully privatised, but again, why is it that anything left with civil servants is a disaster? Somebody at the top needs to impose a culture of real accountability, instead of some nebulous spin and more forms to fill in. Put someone with a track record in command, instead of some time-served pen pusher.
Haik Sarkis, USA
My biggest problem with PFI is that it just seems like political expediency. The money needs to be spent and can be raised in three ways - increase taxation, increase the national debt or PFI. The long leases on PFI hospitals mean that we will be paying through our noses for 60-odd years. I can't understand how the 'interest' that the private companies charge on their investment could be better value for money than govt borrowing. Seems like buying something on credit card when you've got a perfectly good overdraft facility available.
I appreciate the dilemma that Labour had. When they got into office they had to prove that they could manage the economy. They've been anxious not to be seen as tax-and-spenders or borrowers, but 60-year contracts which offer poor value for money may be good window-dressing now but reduce the options of future governments, as well as being an obvious rip-off.
I am not opposed to PPP, I just worry who in their right minds is going to take it on. When looking for something to invest in you look at staff morale, conditions of your capital etc. The NHS and schools in the UK are no go areas for potential investors. There will have to be a heck of a subsidy for potential investors.
The current system is not working, with advances in healthcare an expansion of education it never will, and the burden on the Treasury will break the UK. We need to look at the alternative, it may not be what we want to hear but if we don't the whole infrastructure of the state will collapse around our ears.
Viv, United Kingdom
As we are an aging population the country cannot afford both an adequate health care and education service. Privatisation of one of the services could be a good thing if it is placed in the hands of responsible people. I have been working in private schools in the Middle East for the last ten years and have found that profit is more important than supplying good education. My worry is that the companies that already exist in the UK that the Government are already using are not investigated properly as to their motives. In the end profit is all that companies are really interested in.
Private-public partnerships will certainly work for the private companies. They will, of course, only take on contracts that they can profit from. The taxpayer will be left to run the services that can't make a profit, and pay extra for the services that can to finance the shareholders. I wonder if this is going to be a repeat of the Tory privatisation scam, where the directors of the new companies end up being MPs.
I'm in favour of public-private partnership if it helps improve the NHS, that's the most important thing. I'm sick and tired of the unions moaning, it's all they do - the word "private" is a swear word in their eyes.
People against public-private partnerships cite Railtrack - they always single out the worst, they never mention all the good private companies. I say the most important thing is improving the health service no matter where the investment comes from
I did not enter teaching twenty years ago to put money in the pockets of private companies. I will not stay to do so now.
The private side will cherry-pick the profitable and leave the rest to the State.
Ignore them Tony, and bring the Healthcare Service into the 21st Century. Throwing endless amounts of public money at the NHS has never worked and will never work. It's an absolute money-pit. Other countries realised this long ago - it's time Britain bit the bullet and takes the only medicine that will give the NHS a chance.
I'm a bit confused by this whole debate. Where are the "private sector experts" waiting, supposedly, in the wings to come in and reform our public services? Education is a prime example - LEAs such as Hackney, which have been privatised, bring in this "private sector management expertise". Yet where did the staff come from? They were excellent CEOs poached from successful LEAs around the country. Is this really what we want to do to our public services?
PPP sucks public money into the hands of shareholders, and there's no evidence that better services are delivered. On the contrary, there is plenty of evidence that public policy is being shaped in the interests of the private companies involved. PPP is privatisation of public services on a scale that Thatcher never dreamt of.
He is right. I think that the primary role of Government is to regulate and facilitate. Let the private sector compete for the work of caring for the sick. The hard work is for the Government to work out a mechanism to differentiate between those with means and those without.
Most of your posters
talk as though
funded schools and
medical care were a
new idea that just
needs some time.
It's been sixty years,
folks, and this stuff
has never really
worked. It's time to
try another way of
Public services should be run in a more business like fashion, but as a non-profit entity.
As a former state employee in the USA,
I think most government sectors would go bankrupt if they were private businesses. They are so badly run with hideous amounts of "red tape". Because state services have the luxury of an endless stream of tax money, they appear to believe that economy doesn't apply to them. By all means utilize all the professional help available and get this poor and derelict health system healthy once more.
Unison says its against it and threatens Labours cash income, then a Blairite Think Tank comes out against it, this leave Tony free to backtrack on every promise he's made. Four more years of doing nothing and a Health Service down the drain
The pursuit of profit and shareholder value will undermine the schools' and hospitals' abilities to deliver service. If this is to proceed then a watchdog with the very largest teeth will be needed, but then that will discourage private investment. I do not see any way of making this a win/win venture.
I just hope we get over this stupid obsession with the perceived superior efficiency of all things private, where passengers, patients and pupils are "customers" and services are a basket of goods we can choose from. The sooner we get back to honest funding of modern life's essential services by proper income taxation, the better.
Privatisation is just "increased disparity of wealth" through the back door. If the Tories had had their way, Britain would have gone back to something resembling Disraeli's "Two Nations". Let's pray Mr. Blair doesn't make the same mistakes!
Given the failure of regulation, I'd rather have inefficient public services not aiming to make a profit, than inefficient private companies who are.
Everything has to run at a profit - your home, local charity or church. Otherwise, their creditors take them to court. Yes, privatise the lot but make sure there is a regulator with teeth, responsible to the government, to ensure that the 'public interest' is recognised and obeyed. That way you get the best of both worlds.
It is vital that we get more money into the public services but I'm not sure whether the PPP is the right way forward. However, I do find it hypocritical for people to criticise Tony Blair for going down this route when it's obvious that the voters are not prepared to pay for decent public services. This was shown in the recent general election. If we don't want to pay more tax, then what else can the Labour Party do to provide good public services? We must see if this 'Third Way' will work!!
Public services should be financed by public finance - tax. Private funding or partnerships with businesses will by the very nature of business - ie to make money - not serve the whole population in a fair and public way therefore becoming less democratic.
Solomon Drury, UK
The NHS doesn't make its own beds for use in hospitals; schools don't make their own computers, desks or blackboards - no, they buy them in from the private sector. So where's the problem with buying in the building of a school/hospital from the private sector? And the people to run it? There has for too long been an obsession with "vertical integration" in the public sector - where everything has to be provided by the same organisation. No sane private sector organisation does this - instead, they buy in "best of breed" services from other companies. And so it should be in the State sector too. Maybe if we outsourced the training of teachers
to commercial training companies we'd get them faster, cheaper and better too?
If I wanted a private-public partnership I would have voted Tory!
If the private sector is to become involved without sucking public services dry, how about a system of secondment of management to introduce new practices and ideas? I once read that M&S already do this with charities. The charity benefits from the expertise, the manager benefits from a broader experience, M&S benefit from the manager's experience and the "corporate citizenship brownie points".
'Partnership' has given us British Telecom and Railtrack. Do I need to say more ?
You can't have it both ways. Private schools are run to a business plan and are no place for children whose parents are below the poverty line. In Australia the federal government is proportionally giving more to private schools than those in the state system. Consequently we see schools with million dollar facilities while the state counterpart is patching up and forever playing catch-up. Those who can afford it go to private schools but don't take money away from the state system to prop up an elitist section of education.
If private hospitals have empty beds why shouldn't the NHS make use of them?
J Trosud, UK
If nationalised industries removed 'keeping people in work' as a primary objective, the efficiency gap would be less. Side effects are not nice, however.
I guess it depends what kind of partnership the PM has in mind.
Selling the schools and hospitals to private concerns and leasing them back would make economic sense. Maintenance and upgrading would be the responsibility of the owners, freeing up public resources to concentrate on service delivery.
The main difference between the public and private sectors seems to be that the private sector employs just as many bad managers but pays them far more than they would get in the public sector. Let us hope that this doesn't end up with tax money being used to shore up these organisations while they pay dividends to their shareholders.
John Peterson , Britain
Blair clearly believes that private sector companies can do things better. There is one sense in which I agree. Private companies are adept at haggling over contracts, bidding up prices, and including penalty clauses that can cost the taxpayer millions - indeed they are far better at this than the public sector civil servants who carry out the government's end of the bargaining. Tony Blair would surely agree with the logic of this position, and therefore must know that the result is the private sector do extremely well out of these deals - and we taxpayers lose out. Blair himself falls somewhere in the middle - as his pledge to do this wins him the support of big businesses anxious to win a slice of the action.
Seems like a bit of an experiment to me, but yes private companies should realise that they are nothing without people, and therefore give the people something back i.e. invest in public transport, education and new technologies. Profit can be used for more good than just high salaries. It's not about being told to do things, but doing what you can when you can, if you have the resources.
Tim Edwards, Wales
The premier of the province where I live is very fond of public-private partnerships to fund various public works. So far, I am not impressed. Corporations do nothing for the public good, since they are driven by boards of directors and stock-holders who are interested only in profit. Having corporations fund your schools and hospitals means that these corporations will milk money from the public purse in an ongoing way, which may be difficult to reconcile with public needs. If Nike builds a hospital, will someone wearing Reebok be admitted?
I am not speaking entirely in jest. A few years ago a public-private partnership supplied the educational system here with a small amount of revenue in return for exclusive rights to place soft-drink machines in the schools. Despite the dubious health-value of carbonated sugar-water, it is now impossible to obtain juice from drink machines in the schools. Where does such a trend end?
They haven't worked so far (unless your name is Gerald Corbett), so what on earth makes the government think they'll work in the future ?
Of course, all these politicians need to line up nice, cushy directorships for when even they can't lie to the public any more and have to leave parliament.
Where was the IPPR looking? There was an example on the news just the other day about how private money turned around a school. In principle I do not see any problems with PPP, as long as it does not mean poorer conditions for workers, and does not compromise safety and accountability. If Tony Blair wants to change the perception of "private means trouble", then he should make sure that such schemes are kept on a tight public leash. At the end of the day with PPP, it should be the public part that has the final word in the arrangement, particularly with such sensitive areas as health and education.
Eric Dunn, England
Of course they won't work - you can never successfully marry profit margins to services such as the NHS, and more imaginative solutions need to be found. I agree with Lord Hattersley on this - he puts the case more eloquently than I can.
John B, UK
You do need experienced business minds and resources to help improve public services, but these should be non-profit organisations, as companies that think about the share price and profits too much have an adverse effect on quality and, more importantly, safety.
25 Jun 01 | UK Politics
Blair warned over private funding
20 Jun 01 | UK Politics
Delivery plans face a rough ride
| UK Politics
Cabinet told of public services 'mission'
The BBC is not responsible for the content of external internet sites
Other Talking Points:
Links to more Talking Point stories
|^^ Back to top
News Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | In Depth | AudioVideo
To BBC Sport>> | To BBC Weather>>
© MMIII | News Sources | Privacy