In defence of the private sector

by John Wall

According to the left’s rhetoric those in the public sector wear their underwear outside, eat three Shredded Wheat and sport a halo. This is a slur on all those – including many Labour voters – in the private sector who, presumably, have horns, wear sackcloth and carry a bell crying “Unclean!, Unclean!”

Will someone being paid the national living wage to clean a floor do it better if they’re in the public sector?

Almost five times as many work in the private than the public sector and as the latter is overwhelmingly a cost centre, it’s largely funded by taxing the former.

Everything in my home is produced by the private sector – and I have no complaints. Legislation has removed toxic materials and made the sofa non-flammable. Should I eat out, the kitchen will have been inspected and health and safety means that everyone should have a decent working environment.

Many know the public sector through the seminal documentaries “Yes Minister” and “Yes Prime Minister” while some remember the earlier radio series “The Men from the Ministry” (1962-77).

Less well known now is 1978’s “Your Disobedient Servant” and its 1981 sequel “Waste Away” by Leslie Chapman (1919-2013) who was a regional director in the, then, Ministry of Public Buildings and Works. “Yes Minister” drew on this, particularly in “A Question of Loyalty”.

The consumer affairs programme “That’s Life!” (1973-94) popularised the term “Jobsworth” – primarily in the public sector.

These may be historic but the public sector still gets things wrong; Mid Staffs and Rotherham are but two recent examples.

Any high street changes over time, if Tesco failed there are Sainsbury’s and Morrisons.

Much of the public sector has to exist. A child born now will need a school place until the 2030s, and there will always be the vulnerable to support. Having been in local government, founded in the 19th century, it’s clear that it will be around, in some form, in the 22nd century.

As a (very junior) civil servant, dealing extensively with the private sector and privatised by Blair, and a borough and county councillor I’ve been able to compare.

Some find public sector work interesting and stimulating but others just have a mortgage to pay and mouths to feed. Skills acquired at the taxpayer’s expense can be exploited in the private sector, the cheapest way to learn to fly is in the RAF.

In reality the public sector has the good, the bad and the indifferent and, proportionately, the private sector is almost certainly comparable.

The difference is that, in a functioning market, the private sector needs rowers not passengers – but the taxpayer has deep pockets.

In the public sector, things generally pass across several desks, ostensibly for accountability – tax-payers money is being spent so there must be checks – although it slows the process and increases the cost. As the Official Secrets Act protects officials not secrets, it’s the inverse of accountability, should something go wrong the blame is thinly spread.

The public sector can be risk averse, oppositions want administrations to look incompetent – playing safe can avoid this.

In a functioning market the private sector has to innovate, but doesn’t expect to get everything right; not every book is the next Harry Potter. Successful companies have failures and although lessons are learnt what matters is that profits from the successes outweigh losses from the failures. If the losses are greater there won’t be public crowing by competitors, it’s “There but….”

Get something wrong in the public sector and it’s a stick with which to be beaten.

Although loved by some, the Freedom of Information Act has a cost. Putting information online helps but dedicated personnel may be required and knowing that something could become public can engender caution.

The public sector is assessed by other parts of the public sector such as OFSTED (2016-17 budget £147.2m, c. 1500 staff), the Care Quality Commission (2016-17 budget £236m, c. 2000 staff) – these also cover the private and charitable sectors – and the Inspectorate of Constabulary and Fire and Rescue Service (2017-18 budget £22.49m, c. 225 staff).

This would pay for a lot of nurses and teachers.

Virtually every organisation has to decide whether to do something in-house or sub-contract – and the answer varies. There are important principles.

  • Where possible define what’s to be achieved, not how to achieve it.
  • There must be several capable suppliers (to achieve this, the US needed antitrust laws)

This should stimulate innovation and ensure that value for money can be demonstrated. I recently had work done to my home – the lowest bid only won because I had confidence in the supplier.

There are things, assuming a functioning market that the private sector has to do to survive. The public sector, with the tax-payer always there, doesn’t have to. This is why, in the right circumstances, the private sector can deliver good services at a lower cost and make a profit.

The full story behind Carillion isn’t known, as they weren’t profitable it seems more likely that the public sector was, effectively, ripping them off than vice versa.

In the private sector suppliers/sub-contractors must perform, unless they improve those that don’t are replaced.

Some companies have failed to deliver on government contracts but, apparently without improving, been able to bid for more. It’s time to follow the private sector and stop this.

John Wall is a former member of the Conservatives

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13 Responses to “In defence of the private sector”

  1. Richard MacKinnon says:

    No comments.
    Oh dear I wonder why.
    The private sector has been around for a long time.
    ‘I like that club’. ‘ I like that spear’.
    Guess what happens next John.

  2. John Wall says:


  3. Anne says:

    Interesting piece John but I don’t agree with your conclusions. Now I am not an economist so don’t all shout at me – these are just my thoughts on private verses public sector. My overall feeling about large public sector enterprises is that they become out of control – sub contracting out until no one knows what is happening and executives and share holders extracting large salaries- no one is worth the millions that these chief executives cream off. On the other hand John McDonald has recently proposed nationalising many of the services at no cost to the tax payer- now while I am in favour of such a move I think it is rather stretching it to say there will be no cost – there undoubtedly will be a cost. When Labour comes to power there will have to be some priorities established. Now, perhaps in favour of privatisation- I understand that Richard Branson is funding a hyper loop transport system across India, and there are other such projects proposed for Dubai and America. Perhaps it might be more cost effective to have such a system rather that the h20 train project – this would have to be private enterprise. I am however not in favour of an American style heath service. So my feeling on private versus public are that some public services might be better in the public domain while we should have to have private enterprise for economic growth – is this a mixed economy?

  4. John Wall says:

    @Anne It was, I think, Humpty Dumpty who said that words mean what he wants them to.

    Privatisation means selling off so that politicians don’t have influence – that’s what happened to, amongst others, BT.

    Too many on the left now use privatisation when they actually mean outsourcing or subcontracting.

    In terms of the public sector what matters is that politicians are ultimately responsible – but the method of delivery should not matter. The responsibility for cleaning the streets in my area – and every other area – lies with the local council and if they’re not done properly the councillors get kicked. It doesn’t, and shouldn’t, matter whether the council does it in house or subcontracts it. What matters is that the appropriate stNdard is delivered at the lowest cost to the council tax payer and, in some (but not necessarily all) cases the private sector can deliver this at a lower cost and still make a profit. This is simply because the private sector doesn’t have a right to exist and, therefore, has to cut overheads and innovate to survive whereas the public sector always has the taxpayer there to pay the bills.

  5. Harry says:

    Anne – it might be good to get the terminology right! I think your third sentence was meant to read large “private” sector organisations. Or perhaps you don’t know the difference?

  6. postageincluded says:

    “Everything in my home is produced by the private sector – and I have no complaints. Legislation has removed toxic materials and made the sofa non-flammable. Should I eat out, the kitchen will have been inspected and health and safety means that everyone should have a decent working environment”.

    Who is this joker?

  7. Richard MacKinnon says:

    John Wall,
    Thank you for your reply to my comment. It took me a minute to work out what your point was, four question marks is not a lot to go on. But I think I have it, I don’t think you understand my comment.
    Please let me explain. Nothing would give me greater pleasure. Before I do, I apologise for being obtuse. I thought my point was obvious. Clearly it was not, with yourself.
    The private sector has been around since man walked on the earth, …. “I like your club, I like your spear”, What do think might have happened in such circumstances John? when two men meet, twenty zillion years ago, alone, out hunting?
    Please be reassured, you do not have to defend the private sector. It will be there a long time after we are tucked up in bed in our nursing homes.

  8. John Wall says:


  9. Anne says:

    Thank you Harry, yes I did mean private organisations – you guys are far too clever for me.
    John didn’t Humpty Dumpty fall off a wall as some of your non sensible statements appear to be.

  10. John Wall says:

    @Anne – I’m interested in ends, too many on the left, and Blair was a bit of an exception which is probably why he’s now despised, are preoccupied with means.

  11. Richard MacKinnon says:

    Im glad your .

  12. Ex Labour says:

    To paraphrase what I believe John is saying…

    1. The civil service is bloated and full of quango’s who add no real economic value and are a drain on tax resources. However they are in some respects a necessary evil, but should be smaller in size.

    2. We see the public sector as hero’s and untouchable, but this is not necessarily the case.

    3. The private sector provides the energy and innovation which in turn us with better products and services, but they do it at a much more cost effective rate than the public sector, so outsourcing is the answer to getting better public services.

    Its up to you which side you fall on.

    Hope that helps

  13. John Wall says:

    @Ex Labour – Although I’ve spent a lot of time in the public sector I’m a fan of the private sector. However, the private sector will deliver what the appropriate functioning market wants – if the customers are laissez faire and prepared to put up with cheap and nasty that’s what they’ll get. If, however, customers are prepared to be demanding and, when necessary, vote with their feet the private sector will deliver. Go to America and the hospitality sector is first rate – because there are so many places to eat you don’t have to go back to somewhere second rate. The problem with the public sector is that – although there are some first rate people in it – a lot of it, effectively, has a divine right to exist – and that means that the taxpayer is always there if the nasty brown smelly stuff hits the air circulating equipment.

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