Home > Uncategorized > Cameron’s Privatisation: Good, Bad or Misguided

Cameron’s Privatisation: Good, Bad or Misguided

On Monday the Prime Minister, David Cameron, announced in the Daily Telegraph an outline to effectively privatise swathes of the public sector. A white paper will be released in the next two weeks allowing private companies the automatic right to bid for the provision of public services. This is not to say that the public sector will not be able to bid for these services as well. All public services, such as education, health, sanitation etc, will be open to the private sector for their provision.

This is not new. A lot of services provided for by local authorities, such as bin collection, are already outsourced to the private sector and because there is an asymmetrical flow of information, the provision for these services are a) expensive b) inefficient and c) unaccountable.

Education, through the Academy programme and now through the Free School  programme, has let the private sector in to educate our children. One could say “this is a terrible thing!” However, it is too early to decide either way, with regards to the Free Schools. The Academies have turned failing schools around they are now competing for the top spots in the league tables. Is competition such a bad thing? No, but not everyone thrives on competition. In fact, some people shy away from competition, so education needs to accommodate those of a non-competitive disposition and, especially, those outside the mainstream ie learning difficulties.

With the topic of the NHS, we are all in agreement that a health service, free at the point of use, serves to benefit us all. However, we do not spend enough, on a per capita basis, on healthcare. The Primary Care Trusts and Foundation Hospitals were the first step to introducing a market into the NHS. However this blog has already voiced concerns about the government’s proposals to hand 80% of the Healthcare Budget to GPs and they can be read here – NHS Reform: Privatisation?

From what we can gather, from the initial outline, accountability will be the main problem with Cameron’s proposals. This, as mentioned earlier, stems from an asymmetrical flow on information. In other words, unless companies bidding for these services disclose everything, the market is weighted in favour of the private provider rather than it being a neutral transaction. It would be advisable if the white paper included mechanisms to create a symmetrical flow of information. This will, hopefully, drive prices down, standards up and be more accountable than the services, whether publicly or privately provided, currently are.


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