Posted tagged ‘HMV’

Open Public Service White Paper: A Matrimonial View

July 20, 2011

Are they also discussing public service reform?

Its guest post time on WLLG and today’s post features the sort of ‘walking through the park’ conversation that would have Mr WLLG rolling his eyes. However, our guest poster uses an early evening stroll to try to get to grips with the risks and pitfalls of public service reform, coalition style. We think he does a good job:

The other day my wife and I were discussing public service reform as we strolled through our local park in the early evening sunshine. My wife is on maternity leave with our first born and has, through listening to radio 4 more regularly and utilising local services as a young mother, become more engaged in the political debates around public services.

She asked, prompted by the news of the new Open Public Service White Paper, what the incentive was for opening up public services to competition.

I said the short answer that proponents would give was that greater competition between providers to improve cost efficiency and to drive up quality. I said that there were already examples of many services being delivered by providers other than the state or local government. We then discussed the issue of how alternative providers can make money by offering economies of scale and more efficient ways of working that could allow them a margin to make a profit. Once Southern Cross entered the discussion, the subject of risk reared it’s arguably ugly head.

I quoted from a recent newspaper article that had, through FOI, retrieved some research commissioned for the Government that suggested one of the ways that private companies are able to make money is their ability to enter and leave a market at speed.

When an opportunity presents itself a fleet footed company will want to get in, without massive set up costs, and take advantage. If at some point an activity becomes less successful and unprofitable then the business can close down and invest its capital in more successful ventures.

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