What will private money do to public services?

The UK government is committed to expanding the role of the private sector in the provision of public services.

It says that is the only way to improve them - and wants more private sector involvement in running schools and hospitals as well as roads and prisons.

But critics say that the schemes are costly and ineffective, and could eventually lead to the end of free public services.

The battle rages fiercest over London Underground. The government insists that private money is the only way to modernise the tube.

Opponents of the scheme say it will lead to the same kind of safety problems that beset Britain's privatised railway network.

Will private money rejuvenate or kill the public sector? Tell us what you think.

This Talking Point is now closed. Your comments are posted below.

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Why have I, and thousands like me, given so much National Insurance money to the government for health care?

Richard, UK

Why have I, and thousands like me, given so much National Insurance money to the government for hospitals and health care? Where has that money gone that they have to get private companies in to do the job? I'm certainly not going to pay more to pay the wages of a fat-cat being in charge of a hospital. Tony Blair can dig into his own substantial pocket and pay him for me.
Richard, UK

It all comes back to what is public borrowing. The government is fooling nobody by pretending this is private investment. We are paying for it anyway, it's just borrowing money from the private sector so why not accept it as investment in a vital public service. The private sector will do business whatever it's called.
Donald Stavert, UK

Why is this question posed as though there is private money coming into public services? The money being used is all public money - yours and mine - the difference when the private sector runs our services is that we are paying extra to cover the higher borrowing costs of the private sector, and extra to pay for their shareholders' profits. Really we are talking about your money being handed to private companies to provide worse services at higher costs than the public sector. How's that for inefficiency!
Chris Bartter, Glasgow, Scotland

Do you think the private sector is concerned about safety measures or good services, if they are costly?

Manhal A. Dawood, UAE-Abu Dhabi

I believe that the advocates of privatisation are getting too patient with the UK people's welfare. Gradual transformation from public services into private services could put the living standards at stake. Do you think the private sector is concerned about safety measures or good services, if they are costly? I think they are always busier in how much they could get from UK people's pockets than in how much they could give; they are keener to do that than anything else. Just imagine what will happen if health care is 100% privatised, people's health will be on the Stock Market.
Manhal A. Dawood, UAE-Abu Dhabi

The reason we have 'public services' is mostly because the private sector historically refused or were unable to provide them adequately. This doesn't seem to have changed in my lifetime.
Arri London, EU/USA

Private money is motivated by greed, not the good of others.
Hugh Jones, Canada

Go forth and privatise yourselves!

Mark Carrier, UK

Quality and safety can be compromised by the focus on cost efficiency and profit maximisation. The application of 'bottom-line' liberal market philosophy to public services such as health and education necessarily redefines the focus of what is most important. Good public services don't come cheap but for the benefits in the quality of life shared by all those in society the expense may be worth it. What is missing from the public sector is transparency - perhaps those in government should be exposed to the same competitive rigours of commerce - go forth and privatise yourselves!
Mark Carrier, UK

It surprises me that so many people are opposed to improving the quality of education in this country. The plans in Surrey appear to be well thought out and well targeted. Is it not time to develop a system that is continually improving rather than one that appears to be standing still? Recent studies into the benefits of losing grammar schools to comprehensives don't seem to indicate any particular successes of the comprehensive system. It is time for change.
Phil Gates, England

Privatisation obviously has its advantages, allowing community needs and interests to be met. It also permits local employers to have a say in curriculum design and implementation. However, it's not a panacea - schools still need effective management. Privatisation doesn't guarantee that. Lots of private companies go bust!
Tony King, Botswana

I've only one word to say to people who think public services will perform better in the private sector: Railtrack.
Andrew, UK

Let's not kid ourselves that the public sector has the monopoly of poor management. The only difference that I see is that the private sector can make bad decisions more rapidly.
Rodger Edwards, UK

The best solution is to make those that run public services accountable to the users

Mark, Manchester

A key difference between public and private enterprises that I have not noticed mentioned in this debate is 'Incentive'. Private companies must provide a service that users will use (though that does not mean it has to be good service). Public companies by contrast have no such incentive. The best solution is to make those that run public services accountable to the users (the public), but since pigs can't fly the next best is to have private enterprise managing public services.
Mark, Manchester

What will private money do to public services? - undermine them!
Peter, UK

This question is posed to those people who suggest that people paying for private services (e.g. education and health) should pay less tax/National Insurance. A logical extension of this would be to suggest that those of us who have no children and therefore do not use the education system at all should also get a discount. Perhaps we could consider the views of pacifists who do not want to support the armed services and reduce their contributions too! This way madness lies!
Ann Locatelli, England

The whole of the public sector should be privatised

Dave Wood, UK

The whole of the public sector should be privatised. The private sector is a lot more efficient. I don't care if the private sector provides the health or education system so long as the principle of free at the point of use is maintained.
Dave Wood, UK

I for one welcome this initiative. The sooner that people realise that the state isn't a great big chequebook that is going to bail them out of every responsibility that they themselves should have, the better. Why should my taxes go on forever subsidising welfare dependants who are quite capable of standing on their own two feet but choose not to because it is easier? We need more programmes like this taking these responsibilities away from the state and pushing them back to where they should belong, with the individuals concerned.
Justin Levett-Yeats, UK

What usually happens is a private firm makes a fortune while destroying an infrastructure

John B, UK

What usually happens is a private firm makes a fortune while destroying an infrastructure but when things go wrong the public sector workers get the blame and then... nothing happens and the cycle repeats.
John B, UK

There seem to be myriad opinions here on this issue of private involvement in the public sector. The problem is most people either don't understand the fundamental concepts of PPP or are linking previous privatisation initiatives to PPP. Some facts are clear, the public purse cannot afford to fund all the necessary infrastructure costs or risks associated with health, education and transport any more.

Many governments are now realising this. Critics believe we should look at alternatives without being able to suggest any. The traditional methods are just not an option. When PPP is implemented correctly, the safeguard for the public is the performance/ outcome driven contract which clearly defines the service levels. If it don't work, we don't pay.
Colin, Singapore

Public works like this need a miracle to make a profit

Lim Yen Chung, Malaysia

Public works like this need a miracle to make a profit. But public transport is akin to infrastructure and the task that is now transferred to the private sector will be lucrative to the consortium, as the profit is going to be front-loaded to the construction side. Looking at the Chunnel would be a realistic model but if the intention is to provide public transport at a fair price, then it would easily achieve the aim - reduce pollution, road congestion, increased productivity et cetera.
Lim Yen Chung, Malaysia

If the government is going to involve private money into the public sector then I hope our taxes will fall in the same proportion. What they should do is make the decision-makers accountable for spending our money. What did happen to all those people who wasted millions of pounds of our money on the Millennium Dome and projects like it when the money could have been better spent on trying to recruit decent teachers instead?
Phil Tunnell, Oman

The reality is that there are well run enterprises in both sectors

Steve Townsley, UK

The argument always comes down to the obsession that the private sector is good and the public sector is bad. The reality is that there are well run enterprises in both sectors. But there are also badly run organisations. So far privatisation has delivered mixed results. At best some new money and good managers have improved rundown services. At worst privatisation has led to Railtrack and private monopolies with high prices.

The bottom line is that politicians are elected to improve public service not just to hand it over to the public sector due to lack of ability to run them. A well-run council or NHS hospital should be supported by politicians. They need to stop running to the private sector for help and do what they were elected to do.
Steve Townsley, UK

Surely it is not about the principle of PFI, but the degree of profit, and who is commissioned to build the hospital, whether end users, ie patients and staff, are consulted in the design? There is as they say no free lunch, but the cost effectiveness of any project must be paramount. Not all private companies are good, nor all public bodies bad. It is about people, and unfortunately, my experience is that it is hard to get good help nowadays.
Y. Chang, UK

I've have spent all my career working for private companies and have never encountered such amateur management

Simon Atkinson, UK

Much has been said on this page in regards to the apparent ineptitude of public service management. I've have spent all of my short career working for private companies (one FTSE, one just outside the FTSE) and I have never encountered such amateur management (I have yet to have a manager who has been on a comprehensive management course).

In response to Guy Hammond's comments on reduction in tax if you use private healthcare or a private school. If you were injured in an accident would you expect to be taken to a private A+E department in a private ambulance? The fundamental point is that all these services are there if you want to use them or have to use them, this does not entitle you to a discount. Then again his suggestions would do a lot to enlarge the gulf between the richest and poorest even more.
Simon Atkinson, UK

Why is so bad for a company to make money if they provide the right level of service at the right price? French private hospitals provide hip replacements for the public sector at a third of the price of an NHS hospital.
Andrew Aiken, UK

Private companies running outsourced public services ultimately cost more because the private service provider will often only negotiate to provide a 'base line' level of service. Anything above and beyond this is then considered additional to contract and incurs a commercial rate of cost. This is how the profit is made in providing public service.
Stephen, UK

Why is there the myth that private companies would run services better than the Government?

David Heffron, Glasgow

Why is there the myth that private companies would run services better than the Government? Anyone who works in the private sector - whether in an office, on a building site or in a shop can tell you their own horror stories of ineptitude and incompetence. The only differences between the two is that a private company is not accountable to the public, only to its shareholders. And that public companies are not expected to make a profit. Cash that would otherwise be spent on new railway lines, schoolbooks or hospital beds goes into someone's pocket.
David Heffron, Glasgow

Nothing makes me seethe more than the current obsession with the supposed efficiency of everything private. I'd much rather have certain aspects of my life governed by some sort of democratically-elected system than by a share price-driven multinational, headed by a morally-bankrupt fat cat.
Richard G, UK

It is only fair that, for example, those who have private healthcare pay less National Insurance. And those who pay for private education for their children pay less tax; after all they are not using the services paid for by tax.
Guy Hammond, England

The UK spends an equivalent amount of taxpayers' money on the NHS as many European countries. These, however, spend a larger share of GDP on their health services through... private funding... Sure a little pragmatism would call for the same approach in Britain...
Michael, Eire

P, UK has hit the nail on the head. Predominantly, the track record (pun intended) to date of such initiatives is one of costly failure and attributable death. Public opposition to PPP/PFI runs high. And this is supposed to be a democracy? It is absurd to contrive a framework where PPP initiatives are encouraged to run underfunded public services for a profit taken from the tax-payer and without either accountability or responsibility for things going wrong.
John Bennett, Reading, UK

A true case of political correctness gone mad!

Ben Drake, York, UK

Anyone with practical experience of PFI/PPP schemes will tell you what a bad deal they are. Workers and customers who initially said, "let's not be dogmatic" are now against private partnership because we've seen it lead to cuts and closures. But the Government refuses to even consider alternatives; a true case of political correctness gone mad!
Ben Drake, York, UK

The problem is more than "what will private money do for us?" - a business is not the same as a service and never will be. What we have to decide here is what are the duties of the state to its people? When we know that we may be able to say that some things are public services, that they will never make a profit and if we want to enjoy the better quality of life that they bring then we'll have to pay for them in taxes.
Steve G, UK and Germany

Having worked closely with several UK public-sector organisations, I've seen the horrendous inefficiencies and inept management that is endemic behind the scenes. If we can get private-sector management methods into these organisations, it can only be an improvement. The "forces of conservatism" - primarily the public-sector unions - won't like it though. Tough. They're part of the problem, not part of the solution!
David Moran, Scotland/ Australia

The only beneficiaries will be the fat cats who milk the public to award themselves massive pay rises and bonuses while doing precisely nothing to improve the system (at the same time as slagging off those who in their view let it deteriorate). Like most of New Labour's ideas it is just a corporate scam.
P, UK