The private sector: great at coffee, bad at public services

It was a shame that the Guardian opened its recent discussion on public services by saying 'this isn't a debate focussed on "public sector good, private sector bad"'. Given the people it had picked for the panel, which included outsourcing company A4e, it didn't need to worry. A strong message came across: 'there are no right answers, it depends, different providers are appropriate for different scenarios'.

These comments masquerade as common sense, because they seem to be balanced, they seem to say 'whatever works'. After all, who wouldn't want what works? But the truth about what works, really, is that private companies are no good at running public services.

Private companies are driven by profit. That's fine when they're competing in a free market, running clothes shops or cafes, for example. But when it comes to public services, there's no competition, it's not a free market. You go to your local hospital, school or jobcentre, there really isn't a great deal of choice - how could there be? At no point do you, the service user, get to feedback to the market how you feel about the service provided. Instead, there's a bidding process with national or local government to try to get good value for money from service providers.

Given these circumstances, what does a for-profit company do? Of course, it tries to get the best deal for its shareholders. The company wants the government, or service users, or both, to pay as much possible while it provides a minimal service in return. That's how it can make a profit.

Clothes shops and cafes can make more money by producing cheaper clothes or making better cups of coffee. But private companies running public services have a problem - they have to make money from helping people to meet their basic needs. So they penalise carers for staying too long with vulnerable people, to cut costs. Or they don't bother hiring qualified court interpreters. Or they make NHS patients wait. These are great strategies for boosting company profits, but they're not good for anyone else.

There's a reason why people think 'private sector bad'. The privatisation experiment has been a complete trainwreck. (Don't even get me started on the trains.)

The real debate the Guardian should be having is about what we want our public services to look like. What should be the role of cooperatives, mutuals and social enterprises? How can workers be encouraged to come up with new ways to improve services?  How can communities make sure their needs are met by the public sector? I'm looking forward to discussing these issues with our advisors, affiliates and anyone else who's interested over the coming months. 

It's easy to talk about how complex public service commissioning is, and many in the Guardian's service delivery hub are happy to do so. But it's not that complex really, is it? For years we've been totally taken advantage of by private companies running our public services. Private bad. Let's talk more about what's good, and how we can make it happen.