A Fine Romance: Forging New Relationships Between The Private And Public Sector
The debate concerning the role of private enterprise in the
public sector is well documented and often divisive. The question
is, how is the role of the private sector affected by the financial
crisis? Will the opportunities reduce if the government endeavours
to claw back some of its control as it has with the banks and what
will happen to the projects already in the pipeline which may now
suffer from lack of funding, insolvencies and risk averse
investors? Will opportunities remain for forging new relationships
between the public and private sectors?
Those who champion the role of the private sector claim that it
delivers many benefits such as increased competition and
innovation, lower costs, less red tape and a higher quality.
However, critics argue that there is a core preserve of state
functions, such as the NHS and the police, which should never be
subject to private sector intervention or control, arguing that the
most sensitive state services require more than just a profit
orientated approach.
Wherever the balance lies, there is no debating the fact that
the private sector has been and continues to play a significant
role in discharging government functions.
A review of the public sector undertaken last year by DeAnne
Julius for the Department for Business, Enterprise and Regulatory
Reform found that the industry turnover for 2007/8 amounted to
£79 billion. Together with the government's sustained
spending power during a financial crisis and the use of investment
in infrastructure as a stimulus for the economy, the outlook for
private enterprise in relation to public procurement and
outsourcing does not look as bleak as might perhaps be
expected.
In such times, the level of certainty found in the public sector
offers a safe house for risk averse private enterprises, and
indeed, commentators are suggesting that this recession presents
many opportunities for the private sector to go beyond a safe
partner relationship with the public sector and instead to forge
new and profitable relationships.
Existing contracts and those already in the pipeline are not
likely to fall foul of the effects of the credit crunch due to the
stability offered to the public sector by Gordon Brown's three
year spending plan. The Government has taken the decision to
advance £3 billion of capital spending from 2010/11 to 2008/9
and 2009/10 to support the domestic UK economy and to be applied
towards those projects that are able to be brought forward to
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