Public ownership
Public ownership refers to any service or industry owned by the state, for example:
National Health Service
Emergency services
Armed forces
State education Central government controls these organisations.
Their main aim is to provide essential services for the whole population. They are not profit making, and the general public pays for these services through taxation. Some services are the responsibility of local government, such as refuse collection and the maintenance of parks. There are arguments for and against public ownership. First look at the advantages:
Jobs - Usually protected, reducing unemployment.
Resources - Key supplies, eg water and energy, can be guaranteed and controlled.
Essential services - Health, education, housing and transport are guaranteed for everyone. The main argument for public ownership is that the whole population benefits rather than just those who can afford to pay privately. Before the creation of the National Health Service, for example, you had to pay to see a doctor. Today we pay through taxation, but those who earn less, pay less and the unemployed are provided for. Now look at the disadvantages of public ownership.
Higher costs - Providing these services means higher costs, and higher taxes.
Inefficiency - Large non-profit making organisations suffer from diseconomies of scale
Governement interference - Politicians' interference can negatively affect the efficiency of an organisation The main argument against public ownership is its cost. This cost is called the Public Sector Borrowing Requirement and is funded by taxation, either directly through income tax or indirectly through National Insurance. More public services mean a higher tax bill for everybody, including those who may not benefit from them. Large public sector organisations are bureaucratic. They also often have a monopoly, and without competition, workers can become unmotivated and inefficient. During the 1980s, the government decided to privatised most of the nationalised industries in the belief that the added competition, and profit motive, would improve efficiency, and provide a better value-for-money service for the consumer.
Examples are:
British Gas
British Steel
British Airways
British Telecom Public services such as transport and refuse collection have been contracted out to private companies or deregulated by local councils
Public ownership refers to any service or industry owned by the state, for example:
National Health Service
Emergency services
Armed forces
State education Central government controls these organisations.
Their main aim is to provide essential services for the whole population. They are not profit making, and the general public pays for these services through taxation. Some services are the responsibility of local government, such as refuse collection and the maintenance of parks. There are arguments for and against public ownership. First look at the advantages:
Jobs - Usually protected, reducing unemployment.
Resources - Key supplies, eg water and energy, can be guaranteed and controlled.
Essential services - Health, education, housing and transport are guaranteed for everyone. The main argument for public ownership is that the whole population benefits rather than just those who can afford to pay privately. Before the creation of the National Health Service, for example, you had to pay to see a doctor. Today we pay through taxation, but those who earn less, pay less and the unemployed are provided for. Now look at the disadvantages of public ownership.
Higher costs - Providing these services means higher costs, and higher taxes.
Inefficiency - Large non-profit making organisations suffer from diseconomies of scale
Governement interference - Politicians' interference can negatively affect the efficiency of an organisation The main argument against public ownership is its cost. This cost is called the Public Sector Borrowing Requirement and is funded by taxation, either directly through income tax or indirectly through National Insurance. More public services mean a higher tax bill for everybody, including those who may not benefit from them. Large public sector organisations are bureaucratic. They also often have a monopoly, and without competition, workers can become unmotivated and inefficient. During the 1980s, the government decided to privatised most of the nationalised industries in the belief that the added competition, and profit motive, would improve efficiency, and provide a better value-for-money service for the consumer.
Examples are:
British Gas
British Steel
British Airways
British Telecom Public services such as transport and refuse collection have been contracted out to private companies or deregulated by local councils
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