Monopoly capitalism, y’all.
From the FT:
UK outsourcing to private sector doubles
By Nicholas Timmins, Public Policy Editor
Published: July 9 2008 23:33 | Last updated: July 9 2008 23:33
Outsourcing of public services to the private and voluntary sectors has almost doubled to close to £80bn in little more than a decade and makes up a far larger part of the economy than previously thought.
A government-sponsored study by DeAnne Julius, the economist, revealed on Thursday that those sectors supply a third of public services – everything from National Health Service treatments to bin emptying, IT, back-office functions and RAF pilot training.
The market is worth £79bn, employs almost as many people as the NHS and accounts for 6 per cent of gross domestic product, making it a larger industrial sector than pharmaceuticals, automotive or electricity, gas and water. It also has considerable potential for further growth both at home and abroad, the study is expected to conclude.
John Hutton, the business secretary who commissioned the report, is set to lead a first public service industry trade mission to Washington next week to promote its export potential.
“UK companies and the services they deliver are of increasing global interest in this growth market,” said Mr Hutton. “As policymaker, procurer and provider, we… must do all we can to help UK companies prosper at home and in these new overseas markets.”
Previous estimates of the size of the public services industry suggested about a fifth of public services were delivered by the private and voluntary sectors.
The study, which has disaggregated government accounts to get to the answer, shows it to be far larger. In real terms, it has grown from revenues of £42bn in 1995-6 to £79bn last year.
Growth has slowed, however, running at 3 per cent a year real after 2003-04, against 7 per cent real in the preceding period. The prime minister has said the private sector role will grow “at an increasing pace” where it offers value for money.