Starmer's vision quest

[Pblakeney]

Equally there's more than a fair chance that £7 bn or more would have been wasted in public sector inefficiencies

Just playing devil's advocate. At least that £7bn on inefficiencies would have remained in this country.

 

[briantrumpet]

Just playing devil's advocate. At least that £7bn on inefficiencies would have remained in this country.

In a similar vein, I asked Gemini if the public sector is less efficient than the private sector, as it's taken as a 'universal truth'

The question of whether the UK public sector is less efficient than the private sector is a massive topic of debate among economists, politicians, and policy experts. There is no simple "yes" or "no" answer because measuring efficiency in the public sector is notoriously difficult, and the two sectors operate under entirely different rules and goals.
Here is a breakdown of why this comparison is complicated, where the public sector struggles, and where it actually holds an advantage.

1. The Core Problem: How Do You Measure "Efficiency"?​

In the private sector, efficiency is relatively straightforward to measure: it usually comes down to profitability, return on investment, and market share. If a company wastes resources, it loses money or goes under.
In the public sector, the goal isn't to make a profit; it is to deliver a public service (like healthcare, policing, or education) to everyone, regardless of their ability to pay.

• The Measurement Gap: If the NHS treats more patients but spending goes up, is it more or less efficient? If a school improves exam results but requires more funding per pupil, how do you score that? Because you cannot easily put a price tag on the "output" of a public good, efficiency is much harder to quantify.

2. Arguments That the Public Sector is Less Efficient​

Critics often point to several systemic factors that can drag down public sector productivity:

• Lack of Market Competition: Without the threat of bankruptcy or competitors stealing customers, there is less immediate pressure on public bodies to innovate, cut waste, or optimize processes.
• Bureaucracy and "Red Tape": Public institutions are funded by taxpayers, meaning they require massive amounts of oversight, regulatory compliance, and democratic accountability. This extra layer of administration (to ensure money isn't misspent) inherently slows things down compared to a agile private firm.
• Risk Aversion: In government, a high-profile failure can lead to a political scandal. Consequently, public managers tend to be highly risk-averse, which can stifle the adoption of new, potentially efficiency-boosting technologies or practices.
• Legacy Systems: Large parts of the UK public sector (like the civil service or parts of the NHS) rely on deeply entrenched legacy IT systems that are incredibly costly and slow to upgrade.

3. Arguments That the Private Sector Isn't Automatically Better​

Conversely, many economists argue that the private sector is not inherently more efficient, especially when tasked with delivering public services:

• The Profit Incentive vs. Quality: When public services are privatized or outsourced (such as water companies, rail networks, or care homes), the need to generate shareholder profit can sometimes lead to cost-cutting that harms service delivery or infrastructure maintenance.
• Transaction and Contract Costs: Designing, bidding on, and monitoring private contracts to run public services introduces its own massive layer of bureaucracy and legal costs. If a private provider fails (like the collapse of the outsourcing giant Carillion in 2018), the taxpayer ultimately has to foot the bill to rescue the service.
• Economies of Scale: For certain massive, universal services like healthcare, a single-payer public system (the NHS) has historically achieved high administrative efficiency because it doesn't have to deal with the multi-billion-pound marketing, billing, and insurance infrastructures found in private systems like that of the US.

The Productivity Puzzle: Data from the Office for National Statistics (ONS) shows that UK public sector productivity has generally grown at a slower rate than the private sector over the last few decades. However, the ONS itself notes that public sector productivity is highly sensitive to funding cycles—for instance, when demand spikes (like during a pandemic or due to an aging population) without a matching rise in infrastructure investment, measured productivity inevitably drops.

Ultimately, the consensus among public policy experts is that neither sector is universally "better." The private sector excels at driving efficiency through competition, innovation, and rapid scaling. The public sector is better suited for handling services where equity, universal access, and long-term societal stability matter more than the bottom line.

 

[Psamathe]

In a similar vein, I asked Gemini if the public sector is less efficient than the private sector, as it's taken as a 'universal truth'

For me the issue comes from that the Private (commercial) sector in our capitalist system required the companies to only act in the interests of the shareholders. Whereas public ownership can operate in the interests of the public. Massive difference and for basic requirements like water, should we be entirely dependent to companies acting for the interests of often overseas corporations.

 

[briantrumpet]

For me the issue comes from that the Private (commercial) sector in our capitalist system required the companies to only act in the interests of the shareholders. Whereas public ownership can operate in the interests of the public. Massive difference and for basic requirements like water, should we be entirely dependent to companies acting for the interests of often overseas corporations.

That's often countered with the claim that the private sector needs to keep the customers satisfied to make maximum profits, but if they've got a monopoly (actual, or quasi), that check on their behaviour is lost, as we've seen with water.

 

[Psamathe]

That's often countered with the claim that the private sector needs to keep the customers satisfied to make maximum profits, bit if they've got a monopoly (actual, or quasi), that check on their behaviour is lost, as we've seen with water.

Additionally, private companies will do as little as possible for as much return as possible. But for something so critical as water we should be doing the best possible ie safest water possible, cleanest rivers, beaches you don't have to share with other people's poo, etc.

Private companies at best will only spend to meet minimum requirements where we should be exceeding the minimum. And yet water companies are finding best returns not even coming close to minimum standards and now seeking exemption from those minimums whilst charging us more for a service we've been paying for and not getting for years. To me this isn't a business model that works for our society.

 

[Psamathe]

Another example of "those with the broadest shoulders"

Primary schools lose out as Labour slashes sport funding
Funding for primary school sport in England is to be cut by Labour, including the abolition of a grant designed to cement the 2012 Olympic legacy, to the dismay of school leaders.

 

[Psamathe]

Something else I can't see happening.
Reeves makes case to remain as chancellor with reports Burnham may favour Miliband. I see a significant party of the failure of the current Government as from Ms Reeves eg where did the Winter Fuel Allowance cuts come from, Farm Inheritance Restrictions whose idea?, many subsequently U-turned. Also failure to follow "those with broadest shoulders". Are these Starmer ideas he forced to Ms Reeves? (either way does not reflect well on Ms Reeves).

 

[C R]

That's often countered with the claim that the private sector needs to keep the customers satisfied to make maximum profits, but if they've got a monopoly (actual, or quasi), that check on their behaviour is lost, as we've seen with water.

I refer the honorable member to my post about enshittification elsewhere in the forum.

 

[BoldonLad]

One of the difficulties of comparisons with the past for these industries is that they no longer resemble the organisations that existed under nationalisation. The electricity and gas industries consisted of 12 regional entities that had been virtually unchanged since nationalisation where each did virtually everything to do with electricity and gas in their regions while now the industries are subdivided into functions with no regional identity. It's like comparing apples and oranges.

I get your point, but, between the apples and the oranges, I can find a better range of appliances, AND because there is competition, I can expect better customer service.

 

[BoldonLad]

Just playing devil's advocate. At least that £7bn on inefficiencies would have remained in this country.

Well, maybe not all of it, even public sector fat cats like their holiday homes in France, etc plus there may have been some overseas subcontractors taking a profit

 

[Pblakeney]

Well, maybe not all of it, even public sector fat cats like their holiday homes in France, etc plus there may have been some overseas subcontractors taking a profit

Okay, most of it.

 

[BoldonLad]

Okay, most of it.

I have kept my share of the £7bn in the UK, well, except the expenditure on imported products (eg car, phone, motorcycle, etc)

 

[Rusty Nails]

I get your point, but, between the apples and the oranges, I can find a better range of appliances, AND because there is competition, I can expect better customer service.

Since privatisation almost 40 years ago and nothing to do with privatisation, the rapid advance of technology and its marketing has meant there is a much bigger, and probably better, range of gas and household electric appliances available...in the same way there is a much better range of PCs, telephones and televisions etc.

TBF I agree you can expect better customer service, especially in new entrants to the sector, although I have read that satisfaction levels with the performance of public utilities has fallen in recent years, but that just may be because as companies grow and get established they concentrate less on customer service...or just because people are fickle.

 

[briantrumpet]

even public sector fat cats like their holiday homes in France

Oi, I'm neither public sector nor a fat cat! And I'm very efficient.