NCPA - National Center for Policy Analysis

The Push for Privatization in Britain

September 25, 2001

Almost all of Britain's medical care and education is still run -- and paid for -- by the state.

  • In 1998-99, spending on publicly-funded patients treated privately was only about 5 percent of total expenditures of the National Health Service.
  • In education, only two publicly-funded schools are now being run by private-sector organizations -- with one more due to open next year.

But Prime Minister Tony Blair has plans to push privatization further through his "private finance initiative," or PFI.

  • In health, the government plans to make use of spare capacity in the private sector and to use private health managers to run some of the new stand-alone surgery centers it is setting up.
  • The government wants to allow private parties to put forward proposals for new schools when the local education authorities have identified the need for them.
  • PFI schemes have already commenced in the prison industry -- where private interests have built and are running four prisons.

Blair's agenda might seem strange for a Labor Party politician. And, indeed, he is running into the vehement opposition of Trades Union bosses who are afraid privatization will mean the gradual demise of union strength based on public-sector employees.

  • Although the private sector accounts for three-quarters of civilian employment, only 19 percent of its employees are union members.
  • By contrast, the union membership rate in the public sector is 60 percent.

So the unions have good reason to fear the transfer of public sector jobs to the private sector.

Source: "King Tony and the Barons," Economist, September 15, 2001.


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