Optimism for a windy day

[gadget]

Harnessing tidal power is the way forward... perpetual motion is where we need to invest!

[DJ123]

in which case we need a MGU-BS (BS for Bull****) installed in Parliament. Then we can generate enough electricity to power all of the UK & Europe. And probably Russia too.

[Seeker]

Originally Posted by embee

There's no incentive for a publicly owned/nationalised industry to be profitable nor efficient. That's reflected in the costs of the NHS, MOD etc, the management there don't need to "earn" the money for the business, they are given it.

I don't think infrastructure should be judged on a profit/loss basis. I had a discussion in ER with a doctor in the US (not the best time when I needed his help) telling him the biggest drain on healthcare profits is sick people.
Equally transport - some areas will be profitable and they will have to subsidise those that are not - if no areas are profitable, we'd need to decide whether the taxpayer should fund the service.

As for private industry - the test and trace was run by Serco (despite it saying NHS). It was supposed to be a world beater but it was a disaster, £37 billion and it never worked properly. The railways under the franchise scheme - no competition ever showed up to make fares cheaper and the East Coast mainline has been taken back into government control 3 times. Serco again were running immigration centres which have been described as unsanitary and mismanaged.
I challenged my MP to show me a success story of a nationalised industry that has gone private (cue sound of crickets).

A current topical issue is the water companies paying £57 billion in dividends (since 1991) whilst pumping sewage into the sea and rivers and saying fixing the problem would be expensive (for the consumer).

When profit is involved corners are cut.

________________

Originally Posted by gadget

Harnessing tidal power is the way forward..

I agree but it's hard. They tried it on the Humber which has a 7-9kt tide but the turbidity destroyed the turbines in short order.

[Ruffy]

Originally Posted by Seeker

I don't think infrastructure should be judged on a profit/loss basis. I had a discussion in ER with a doctor in the US (not the best time when I needed his help) telling him the biggest drain on healthcare profits is sick people.
Equally transport - some areas will be profitable and they will have to subsidise those that are not - if no areas are profitable, we'd need to decide whether the taxpayer should fund the service.

I agree with this. Setting the scope well for service provision and performance measurement is crucial. Easier said than done

Originally Posted by Seeker

I challenged my MP to show me a success story of a nationalised industry that has gone private.

I have experience from a number of utility sectors and suggest that electricity supply is one where it has worked pretty well tbh (though I accept it's far from perfect and seems to be getting worse - see below)

Originally Posted by Seeker

When profit is involved corners are cut.

IMHO, it's not profit per-se that leads to the problem of corner cutting. The more relevant problem is the expectation that prices can be continually reduced, almost ad infinitum. Harsh though it sounds, sometimes the bills have to go up - surely it's economic nonsense to suggest otherwise?

No amount of 'efficiency' can compensate for underfunding. Also relevant is the effect of long-term vs short term perspectives. The argument is always about the 'expect to pay' figure and often the bottom-up analysis just doesn't fit against the top-down aspiration. Balancing the books is prioritised over absolute service provision, and this afflicts public sector just as much as private. Ultimately the immediate challenge is solved by finding a way to push the troublesome issue into the future (akin to "papering over the cracks"). In the private sector you can go bust and leave the problem behind which is why short-termism wins, yet national infrastructure is a long term matter.

[embee]

There's a big difference between private companies operating independently in business fields and private companies being awarded huge contracts by a profligate inept government with little or no performance related terms included. Here's £37Bn, off you go, see how you get on.

Where essential businesses are operating effectively as monopolies in a specific regional arrangement (I can't choose which water company I get my service from) then pretty strict regulatory oversight is required, but preferably not by the government directly, it should be independent and with teeth. A laissez faire approach to regulation is not a recipe for success, nor is an incompetent legislature.

[Ruffy]

Originally Posted by embee

There's a big difference between private companies operating independently in business fields and private companies being awarded huge contracts by a profligate inept government with little or no performance related terms included. Here's £37Bn, off you go, see how you get on.

Where essential businesses are operating effectively as monopolies in a specific regional arrangement (I can't choose which water company I get my service from) then pretty strict regulatory oversight is required, but preferably not by the government directly, it should be independent and with teeth. A laissez faire approach to regulation is not a recipe for success, nor is an incompetent legislature.

Yes, I agree. Pseudo-competition is a weird philosophy, but I'm not sure it's always necessary when using private enterprise.

Regulation is an intriguing area too. I've seen it operate in a few sectors and I'm not convinced it's as useful as it sounds. My experience is that the deliverers are pretty competent and genuinely committed to good outcomes but the system mashes their dedication because they're not well directed. A real problem for the regulated sectors is that the licences are too vaguely set so it's hard (for Government, Regulators or customers) to rigorously hold the companies properly to account for their performance. It just becomes a game of smoke and mirrors, arguing about future projections, risks and trade-offs.

The challenge remains in policy setting, specifying service requirements and appropriate budget setting.