International comparisons27 April 2012
The Financial Times
While all countries debate the role and reach of the state, Britain is unusual in its extreme sensitivity to the idea of public services being delivered by the private sector. The intensity with which Britons guard the notion of a publicly delivered welfare state is matched only by Americans’ abhorrence for it, underlining the influence of national culture and politics on voter attitudes.
Investors have taken note. At a conference in Washington last week, participants were planning to put money into healthcare businesses in India, Africa and the Americas – but not the UK.
Nick Seddon, deputy director of Reform, a pro-market think-tank, blames their aversion to Britain on the government’s bungled health reforms. “Politicians of all parties seem to regard hostility to the private sector and competition as a badge of honour,” he says.
Key to public acceptance of the private sector in other European countries, he believes, has been the publication of data on productivity, care quality, complication rates and waiting times: “If you can marshal the evidence it is working you can shout your political detractors down.”
That worked in Germany, which has undertaken a big programme of outsourcing hospitals to the private sector, says Mr Seddon.
Sweden offers an example of how performance information can help to remove the political heat from private sector involvement in education too, even in a country with deep-seated traditions of egalitarianism. The country’s independently run free schools are allowed to make a profit, unlike their counterparts in the UK.
Markus Uvell, president of Timbro, a Stockholm-based think-tank, says Swedes “will never love the fact that some people are getting rich from the free schools, but they will be able to accept that as long as they are being offered better services – and that’s the crucial point”.
Yet in outsourcing aspects of policing, Britain has been considerably bolder than other nations, where the role of the private sector is relatively uncontroversial. Given the electorate’s unhappiness with the idea of profit-making from public services, that decision could yet cost it dear.
Bernhard Frevel, a criminal justice expert at the University of Applied Science of Public Administration in North Rhine-Westphalia, says of Germany: “No political party would try to call for such a policy, and neither the minister of the interior nor the minister of finance would survive if they demanded to follow the UK in this respect.”