Public sector or private companies?

[Mecky 10]

Private enterprise does not produce competition, if anything if one business increase their prices the others follow suit.

[Petminder 10]

Private enterprise does not produce competition, if anything if one business increase their prices the others follow suit.

 

That’s an interesting theory and I just wish it was true, in reality has one business cuts its price because its share of the market is too low, a competitor cuts their price in response, eventually prices are that low that employee wages and service suffer with the eventual result of a business failing and people losing jobs.

[Tony 10]

Will the level of profit be included within the terms of the contract? Service standards? Surely the free market can't "let rip" whilst constrained by a contract that means public service takes detracts from shareholder profit.

That happens now. It's a perfectly good model in a grown up contract.

 

People really must get this idea out of their head that profit is not in the public interest, or that it somehow needs to either be masked or exposed.

[Zamo 10]

So surely heads should roll.

 

Why do we just accept such gross incompetence? It's our money that's paying for it. Is it really beyond the wit of man in this day and age with modern technology to get it right?

 

What's so difficult?

 

This was, and remains a failure of policy i.e. the concept that the 'shared services' and 'self-service' fad is the way to get more for less. The policy was started by the last Labour government... so, in a way, heads have rolled.

[Mecky 10]

That’s an interesting theory and I just wish it was true, in reality has one business cuts its price because its share of the market is too low, a competitor cuts their price in response, eventually prices are that low that employee wages and service suffer with the eventual result of a business failing and people losing jobs.

 

That's the theory but , it doesn't work like that.

[xenia 11]

Where? Give us a real example of where the free market has "let rip" whilst still providing genuine competition and working in the public interest. US health provisions? US electricity, gas provisions? Dementia care? I'm interested in real world examples seeing as I've never been over there.

 

 

 

Buyers may well accept the need but profit but then don't like either having to pay more in order to "fund" the profit or see services reduced, again in order to fund the profit.

 

Will the level of profit be included within the terms of the contract? Service standards? Surely the free market can't "let rip" whilst constrained by a contract that means public service takes detracts from shareholder profit.

 

A recent example I was involved in was where an "inhouse" service was put out to tender, a local service provider was able to offer a service whereby its own managment team would replace an aging and over manned supervisory and managment in house team. Not enough time or space to go into the fine detail, but the net effect was that the client recieves a more modern effective and cheaper service, all staff (except in house management) terms and conditions maintained. In short cheaper more efficient. Old Managment team were made redundant albeit they were all approaching retirement age and did receive generous terms.

 

The contractor has the comfort of a long term profitable contract, the client is able to focus on core business rather than peripheral service issues. Staff continue unaffected.

[xenia 11]

Re Examples, May I refer you to" A Model for Municipal Privatisation" by Alan Mitchell.

 

It is written for American readers but is far more informative than I have space or time for here, it also details the examples you mention.

[xenia 11]

Plus then we cant have......Too Big Too Fail !

 

I dont see a contractor who is too big to fail out there at the moment, but we could be heading that way.

 

The recent furore regarding security companies taking over Police duties is a case in point, the first tender document restricts security companies with a turnover of less than £125m p.a. from tendering. Why?

 

This effectively means that regional, smaller businesses, albeit they work to higher standards are penalised because they dont have high turnover.

 

I think I am right in saying that this restricts the bidders to about three, G4S, Mitie and Securitas. Two of hich are foreign owned and one primarily a supplier of cleaning services.

 

If I have to have security men rather than cops I would far rather have those supplied by a locally based, locally accountable company.

 

( I must declare an interest as I do work part time for a locally based company who I find to be excellent employers).

[green 10]

I dont see a contractor who is too big to fail out there at the moment, but we could be heading that way.

 

 

Id suggest most of the Footsie are TBTF.

 

If Barclays were to fail tonight, would it be bailed?

 

If BT were to fail, would it be bailed?

 

BA? Network Rail?

 

If Orange were to look shaky.....do you think the French would intervene?

 

 

The answer to all of the above is YES. They are massive employers and therefore the government would be scared ****less if they were to fail!

[sharrowman 10]

Free market rhetoric is like the religious chanting of monks who's belief that their deity will provide a better life is unassailable.

 

There is no proof that privateers will provide better service, greater efficiency or exemplary customer service, these are articles of faith. Economics is not a science and proofs cannot be made.

 

This is not a partisan argument, public sector provision is terribly flawed.

 

Regrettably, there is no solution, powerful vested interests on both sides will prevent any meaningful change and good suggestions from the uninitiated will be ignored.

[xenia 11]

Id suggest most of the Footsie are TBTF.

 

If Barclays were to fail tonight, would it be bailed?

 

If BT were to fail, would it be bailed?

 

BA? Network Rail?

 

If Orange were to look shaky.....do you think the French would intervene?

 

 

The answer to all of the above is YES. They are massive employers and therefore the government would be scared ****less if they were to fail!

ice providers.

You may be right but these arent contractors. They are bankers and service providers.

 

My worry is that if some of the contractors continue to grow unfettered thay too will become "too big to fail".

 

Just as a matter of interest, my opinion on whether or not those you mention should be allowed to fail is yes, accepting it would be very painful, the market would soon bounce back.

[xenia 11]

Free market rhetoric is like the religious chanting of monks who's belief that their deity will provide a better life is unassailable.

 

There is no proof that privateers will provide better service, greater efficiency or exemplary customer service, these are articles of faith. Economics is not a science and proofs cannot be made.

 

This is not a partisan argument, public sector provision is terribly flawed.

 

Regrettably, there is no solution, powerful vested interests on both sides will prevent any meaningful change and good suggestions from the uninitiated will be ignored.

 

What are your suggestions, If you have no faith in the market and are dissaponted in the public sector what is your solution.?