Tuesday, 13 January 2015

Privates on parade

It has not been a good week for those who hold that the private sector is better than the public for delivering services.   Today we hear that the UK government wants to strip the consortium running nuclear clean up at Sellafield of its £20 billion contract.  Previously the operators of the only privately run NHS hospital in the UK indicated they wanted to pull out.   In both cases it looks like the operations will revert to the public sector.  Both are far too important to be allowed to fail, and both cite spiralling costs as a factor. 

In my opinion we should never have had nuclear facilities largely because we simply do not know how to deal with the waste properly, and it is morally repugnant to throw that burden on countless future generations. The real costs of nuclear are coming home to roost - decommissioning Sellafield is expected to take over 100 years. and I predict costs will increase even further.

Hospitals are at the other end of the spectrum - a highly socially desirable undertaking  Circle who run Hitchinbrook claim they have saved the public £23million.  That's similar to what  NPM makes annually running Sellafield clean up operations.  Of course for private enterprises that is the name of the game - making a profit.  If  one is not visible, or a contract has turned to a loss, they will seek to exit, possibly renege, or even go bust.  It is the government, the people, who stand as the provider of last resort.  It is a factor often overlooked by those who argue fervently that private is more efficient more cost effective.  The Government effectively carries the insurance burden of those large private ventures that get into difficulties or fail.  Just look at the banking crisis and who picked up the costs there.

Jersey has in recent times taken this private good, public meme to heart.  We have incorporate ports and removed the housing stock from public ownership.  It is as though none of the ministers had head of WEB and the reasons why it had to be renamed and reinvented.

Just as private is not a panacea and not always a good outcome, so public can be problematic too.  The truth is that if your venture is under capitalised, if you have demotivated, under trained or overstretched staff, no matter whether you are public or private you will struggle to succeed.  What is certain is that there will always be someone prepared to take a risk to make a profit, and there will always be the expectation the government will be there to pick up the bits when it goes awry.



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