Britain Unleashed: the public sector does not serve a higher moral purpose25 July 2012
In his wonderful introduction to the Telegraph's Britain Unleashed series, Charles Moore suggested that free enterprise has been the victim of its own success. The prosperity won by an enterprising approach has led to complacency and drift, and a forgetting of the virtues which brought the prosperity in the first place. Sir Terry Leahy wrote today of a “conservatism” (with a small c) which is now holding enterprise back. There is much truth in that, but the arguments do not apply to the 25 per cent of the economy directly consumed by the public sector. Here the battle for free enterprise has yet to be won – a genuine free enterprise as Charles Moore describes, which is motivated by the needs of customers rather than the pursuit of riches for its own sake.
The focus on the needs of the customer is the great hope for the involvement of private sector entrepreneurs in public services. In Finland, the private sector has helped to create a specialist hip hospital which is ten times safer (in terms of medical errors) than the typical hospital in Finland. The private company which operates Doncaster Prison has found new ways to keep prisoners in touch with their families, which should be an essential way to keep them from reoffending. HM Chief Inspector of Prisons has written that, “the work with families was among the best that I have seen”. The private company which manages the NHS hospital in Hinchingbrooke has just achieved the highest patient satisfaction ratings in the region.
There are many more examples which demonstrate how private sector entrepreneurs can rethink public services for the better. As Sir Terry Leahy says, the point isn’t to replace public sector monopolies with private sector ones, but instead to allow competition that brings in new ideas and is therefore “a force for progress”. Public sector organisations can be ardent in defence of its monopoly too; the coalition against the Government’s pro-competition NHS reforms was led by the British Medical Association, the doctors’ professional organisation.
Some may say that the public sector has a higher moral purpose than the private sector, because it aims to deliver the national interest – or even, pure altruism – rather than the narrow self-interest of a particular company. In its chapter on the English Civil War, the satire on schoolboy history 1066 and All That termed the Cavaliers “wrong but wromantic” (sic) and the Roundheads “right but repulsive”. The same terms might be used for the general perceptions of the public and private sectors today. In truth those stereotypes are misleading. Public sector organisations do not always provide a high quality service. The public sector also acts in its own narrow self-interest. Every annual pay negotiation proves that point, as do the recent doctors’ strike over pensions, the threatened teachers’ strike and this week's PCS strike. At the same time, many private sector deliverers of public services do so with a real passion for the people that they serve, as the examples above demonstrate.
This would suggest that free enterprise can bring great benefits to the users of public services (through new thinking) and to the taxpayer (through greater efficiency). It should also, however, have major benefits to the whole economy. The global demand for health and education has been rising quickly in recent years and it will continue to do so. The UK already exports its expertise in these areas, including the teaching of foreign students and treatment of foreign patients, but the opportunities are very much greater than that. China currently plans to build 30,000 hospitals, for example. The health leader Mark Britnell has suggested that the UK can export its skills in building hospital infrastructure, delivering primary care and training health workers. Julie Moore, the CEO of University Hospital Birmingham, is working with private sector companies to export her methods of using IT to keep in constant touch with patients at home and to help doctors deliver the best quality of care. It would be a great advantage for the UK to sell these services in the global market rather than buy them from overseas.
These ideas are still a profound challenge to the UK public sector, in which, for example, 56 per cent of workers still belong to a trade union (against just 14 per cent of private sector workers). The culture of many public services, in particular the NHS, is distrustful of the private sector and (in Sir Terry Leahy’s word) highly conservative. It means that private companies have to be brave to enter these markets. I would encourage them to be braver still, and to do more to explain their successes and achievements in serving the public, even if it might show their public sector competitors in a poor light. As the debate over the G4S Olympics contract showed, so much of the distrust of the private sector is based on a lack of openness about the contracts that companies sign and the rewards and penalties within them. Sir Terry Leahy wrote yesterday that good businesses aim to seek out and live by the truth. Openness about the true contribution of the private sector to public services would go a very long way to unleash greater enterprise.
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