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


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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