For what seems like most of my life, the conventional political wisdom has been in favour of the private sector and against the public sector. The private sector is seen as somehow inherently more efficient than the bureaucratic and inefficient public sector. Somehow the idea that the profit motive means that the private sector can provide services for cheaper than the public sector.
Of course the private sector can provide services cheaper when it slashes the wages of workers to the bone, and minimises the amount of work that gets carried out. At the place where I work, cleaning services were contracted out a long time ago so that cleaning is now carried out by workers aiming to meet the terms of a contact rather than being there to clean. The difference? Workers employed to clean, will often perform acts of cleaning that may or may not be spelt out in a cleaning contract – the types of cleaning that only need to get done once a year such as perhaps quickly wiping off the tops of doors, or scrubbing the marks off door handles.
There has been a bit of a change over the last few years – more and more stories about the failures of the private sector, and in the latest case where G4S failed abysmally to provide security for the Olympic games, the public sector had to pick up the pieces. As someone from the police pointed out: “We don’t have the option of giving up and going home.”
There are other failures too ranging from the widespread failure in the world banking sector, to failures that occur at such small scale that they only really impact at the local level – such as the financial mismanagement at my local football club. In such situations, there are three choices – either let the failed business collapse and live without the services that it provided, wait for the private sector to rescue the remains, or to rescue it by public sector intervention.
In the worst cases of failure where society believes it cannot live without the services (such as banking), it is always the public sector that rescues the business.
Or to put it another way, the private sector may only be more efficient than the public sector if the costs of the final bailout are not accounted for. In many cases, public sector inefficiency may be taking into account that the public sector does not have the opportunity to give up and walk away. And this is all assuming that the private sector actually is more efficient.
We have been told again and again by the economic conservatives that the private sector is more efficient, but with examples such as the NHS, is it really so ? We have faith that the private sector is more efficient, and I suppose there may well be some evidence too. But in all cases? Perhaps not.
There is nothing wrong with the private sector; there is nothing wrong with the public sector. We need to stop demonising the public sector and assuming that the private sector is our saviour in all circumstances.