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Private sector
Frogmarch 2002 - Whitby

Over the past few months I’ve read various discussions, on LiveJournal and elsewhere, about privatisation, and about public sector versus private sector ownership of assets and provision of services. One thing that has become apparent is that some ardent supports of the public sector have, what seems to me, a greatly distorted view of what is meant by the private sector.

I’ve worked briefly in the public sector; as a student in the early ’90s I spent summers working at GCHQ, and from 2006–09 I worked part-time on a research project at the University of Dundee. From my direct and indirect experience, and from chatting to Andrew while I write this, I would characterise work in the public sector as working for large, bureaucratic organisations, with an air of inefficiency and overstaffing. The organisations are typically unionised, or unionisation is a significant issue. Pensions are notably better in the public sector, and early retirement on a full pension is a realistic option. There is room for deadwood in the organisation, and employees seldom have any contact with real decision making.

It seems to me that people with experience of the public sector often characterise the private sector as being large PLCs, perhaps international in ownership, with nothing driving them but the profit motive. Staff aren’t valued, employment is precarious, managers are evil, and the organisation behaves like companies do in BBC dramas.

That bears no relation to the private sector that I know. From my experience, private sector companies are likely to have some or all of the following characteristics:

  • Small companies. The majority of people employed in the private sector are employed by small businesses.
  • Human scale. As businesses are usually small, it is possible to know everyone who works for the company.
  • Ownership by employees. Most businesses are owned by people who also work for the company, or who have a close connection to the company. A significant number of businesses in the private sector are sole traders, but ownership models like partnerships and private limited companies (Ltd) both keep ownership closely connected with the operation of the business. Only public limited companies (PLC) — with their pension-fund shareholders — break this link.
  • Benevolent ownership. Because the owners of a business usually have a close connection to that business, and often work for the business, what is good for the owner is also good for the company.
  • Knowing the owner. It is possible for an employee have a personal relationship with the owner of the company they work for.
  • Cost driven. Most businesses are motivated by the need to control costs, rather than by a blatant desire to achieve greater profits.
  • Long-term thinking. Business owners are in it for the long run. They plan for the future, invest their time and money, and want to build a solid business.
  • Staff are treated as individuals; the person matters more than the role. Staff are valued for the skills they have, rather than for their qualifications.
  • Variety. The purpose, ethos, and culture of businesses is highly variable.
  • Failure has consequences.
  • Family. One often finds owners’ family members working in a small company. Nepotism is common; after all, they may be owners in the future.

How would you characterise the private sector?

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One of the things that struck me was the kind of private sector companies that people working in the public sector deal with. If you work in a large public sector bureaucracy then the kind of tenders for contracts they put out are only really handled by large private sector bureaucracies. So the public sector people working there see and deal with a limited selection of private companies.

That is how you end up with public businesses having an "electrical maintenance supplier" who will be an arm of a big private company who comes in to change a broken desk lamp bulb, and bills its standard negotiated rate for it's minimum 2 hour job. So the bulb costs £200. If the public employee was free to nip down to the little shop on the corner (probably a private family business) the bulb would be £1. Of course to make it worse it might be cheeper (and easier) for the public employee to order a whole new lamp from the "furniture supplier" or "stationary supplier" and throw out the one with the blown bulb.

I know ordering a desk lamp is just a few clicks away on the university purchasing system, but I would have to sort out a repair request and get it sent to estates and buildings to get a lamp fixed.

P.S. I don't have a desk lamp at all and don't need one where my desk is!

So you suggest that people working in the public sector only have contact through their work with similarly large private sector organisations, with all their flaws, so assume that the same applies to the whole private sector?

That may be true, but surely everybody buys suppers at their local carry-out, might engage a plumber or handyman, and takes an occasional taxi? We are surrounded by small-scale, personal, individual, private enterprise.

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