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Monday, 10 September, 2001, 10:57 GMT 11:57 UK
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.
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.
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!
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.
Private money is motivated by greed, not the good of others.
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.
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!
I've only one word to say to people who think public services will perform better in the private sector: Railtrack.
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.
What will private money do to public services? - undermine them!
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!
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.
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.
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?
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.
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.
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.
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.
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.
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.
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.
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...
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.
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.
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!
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.
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