3.5.3 Public Service Delivery

After agreeing what level of public spending is desirable and affordable, as described above (3.5.2.3), there is still the question of how best to deliver the chosen services.  A government has a duty of care: to ensure that the services it funds are of adequate quality and that they represent optimum value for money.

Whereas the State itself can choose to deliver these services directly, with its own employees, it can also choose to pay for outsourced service delivery or allow private companies to sell a service directly to the public.  There has been a trend towards privatisation since the 1980s, driven by ideology, as explored in Kean Birch’s article: Neoliberalism and the geographies of marketization: The entangling of state and markets; the article explains the background to this trend and examines the reasoning behind it:

“growing public and political antipathy to the expansion of public spending, compounded by demands for tax cuts, led to a crisis of public investment…

…governments around the world have turned to the private sector to pursue their agendas, partly to access new sources of financing but also to encourage greater efficiencies and accountability as a result of this private sector involvement.”

The politics of choosing public-service providers are discussed later (6.7.1.2), but there are several purely economic considerations – as described in the following sub-sections:

  • There are pros and cons in using State employees (3.5.3.1).
  • More choice can be offered by civil society (3.5.3.2) or a range of private companies (3.5.3.3).
  • There are problems in granting a monopoly to a private company (3.5.3.4), or in using private finance for public infrastructure projects (3.5.3.5).
  • And the role of profit in public-service delivery is contentious, giving rise to possible conflicts of interest (3.5.3.6).

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