I’d actually written this article prior to publication of @DeborahJaneOrr’s excellent article, ‘Private sector efficiency – this lie has to stop’ (clicky). You can follow Deborah on Twitter here at @DeborahJaneOrr.
What is most confusing about the private vs public sector debate is a reluctance in acceptance that they both form part of the wider economy. Whilst teachers, doctors and nurses aren’t ‘wealth creators’ in the sense that a Barclays banker might, wealth of this country would not exist without them; using a strict sense of the word, the public sector brings wealth in other senses and value, rather than profit. Whenever the State is discussed, nobody ever defines the State. When criticising the State’s various manoeuvres such as “over-detention without charge”, Conservatives are oblivious to the fact that the independent judiciary, which is part of the State, stopped it. It is easier to define the State by what is not the States, as entities which are not in the private sector. The advantage of this definition is that it includes structures and functions which the Conservatives have chosen to outsource such as nurses or police workers.
Private sector entities in business are obliged to maximise shareholder dividend under law. This is true whether you are discussing Virgin Care or otherwise. Or take another sector – maybe Virgin Banks. In discussion of how bloated the State is, the Conservatives are wilfully blind to bulky corporatilist operations, such as Google or Virgin. There are too many ‘screws up’ by private companies in Cameron’s corporate Britain to mention, like allegations of A4e failing to meet work programme targets, A4e accused of fraud, andG4s in olympics security. The State can be incredibly efficient – take the NHS for example. A lot of functions are indeed outsourced in the NHS to private organisations. For example, the London NHS Trusts are populated with ‘bank nurses’, which largely charge for their nursing services at a higher rate than traditional NHS staff. They are therefore not in any contract with the State. Like outsourced policemen, or outsourced police officers, or outsourced security for the Olympics, the public have little recourse to them either legally or morally if something goes wrong.
In the pendulum of politics, fashions come-and-go. There is currently a libertarian and liberal fashion, some proponents of which have been fast to criticise the State which gives the vulnerable and disadvantaged in Society some security. An attack on the State is therefore potentially an attack on values. There is no reason why private organisations are inherently not interested in stakeholders’ interests, but it is perfectly possible to a run a hospital with patients or a school with students that does little to maximise value of their transactional experience yet does a lot to enhance shareholder dividend. Not all that generates a premium shareholder dividend is a paragon of virtue, either. Look at the recent allegations and proven activities in Barclays Bank or News International. The fact that utility companies and train companies can increase their prices without delivering necessarily a better service is a sad testament to this.
The lie has got to stop. The Right have relentlessly spun too the notion that the private sector underwrites the debts of the public sector, and finances the country at large. Not true from two key perspectives – the City directly caused the economic catastrophe of England (not the teachers or nurses, many of whom receive little more than a living wage, if at all). Secondly, the ‘private sector’ has not taken up any slack in the effects of the cuts in the public sector. Back to my original stance that we are all part of one big economy, and it is senseless to pit one sector off against the other, but if you’re playing dirty the private sector have a lot to be grateful for from the public sector. However, giving the austerity plan of this Government has clearly failed, it is difficult for politicians to stop lying suddenly.
