Public sector good, private sector bad?

The very open argument rages on in
the media over the future of London Underground. The Government is determined
to press ahead with PPP, supported by private finance, separating maintenance
and improvement from operations in the organisation. Mayor of London Ken
Livingstone and Transport Commissioner Bob Kiley argue for bond financing and
public sector control. At the same time Livingstone labels the managers of LU
as "dullards" (on what evidence, I wonder?) and openly supports
organised labour on the picket lines. Now the issue goes to law.

All the time, with no
long- or short-term solution in sight, Londoners and visitors to the capital
suffer, and one can only guess at the loss of morale in LU. It is significant
that Derek Smith, its highly regarded managing director, is reported in the
Financial Times (6 April) as being attracted back into the health service.

Can we only see the
public and private sectors as goodies and baddies? In the 1980s, Thatcherism
saw the public sector as bad and the private sector as good. What followed was
the mimicking of some private-sector wares such as competitive tendering, but
without the private sector’s knowledge of the value of the supply chain and
long-term relationships.

What followed was
sacrifice on the altar of lowest price, paying later in terms of using the
contract, arguments over performance and quality, and using lawyers – just like
LU now – where partnership would have been a better and cheaper use of energy.

Following the
well-publicised disasters in surface rail, all of a sudden we have flipped. It
is now public sector good, private sector bad with the myriad contractual
arrangements being blamed for the rail industry taking its eye off the ball.
Probably correct. But where did that philosophy come from? It came from the
worship of the contract and the separation of responsibility that the private
sector, particularly in manufacturing, learned more than 10 years ago was a
zero-sum game.

What is missing in
much of the press rhetoric is the value of getting public and private sectors
to work effectively and learn from each other in partnership. The evidence is
there that it works. Sir John Egan pioneered the concept in the face of
adversity with the Heathrow Express project after the tunnel collapse.

The privatised water
industry has been a success in terms of balancing long-term capital needs
against short-term revenue – just what LU needs. The NHS is still patchy, but
has learnt to work in partnership within itself and with other providers
outside the NHS to great effect.

So please, can we hear
more about energy being put into providing solutions that bolster and support
people in LU and their potential partners who are trying to renew and keep a
dilapidated system going rather than making them into political footballs?

By Professor Clive Morton,
Independent HR consultant, chairman of Whitwell Learning and former CIPD

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