Why free services fail

thumbs_downWhich UK public services have consistently failed to achieve good quality?

Top of the list must be the NHS and our school system.

Why?  I think four reasons:

  • they are both massive near monopolies;
  • they are heavily unionised;
  • they are badged as being “free at the point of delivery”;
  • the service providers – doctors, nurses and teachers – have built a level of public trust they may not always deserve.

Missed GoLarge organiasations, whether in the public or private sector, become unmanageable and this is so obviously true of the NHS and of our state school system that it is amazing it has not been addressed. In fact, it has been with the academies movement in schools but the NHS has become too much of a sacred cow for any politician to dare to try to break it down into manageable chunks.

striking doctorsUnionisation is another issue. The God-like status of doctors and nurses has been promoted by concealing the true nature of their trade union with grand titles. The British Medical Association and the Royal College of Nursing are both trade unions, bound to put provider interests before patients’ but the public do not realise this.  The strike by junior doctors may spark some questions in the public mind. I hope so.  Their militant attitude strikes a new low in the history of the NHS and the stated desire to put patients first.

striking teachersThe teachers are little different. Anyone watching the antics of the National Union of Teachers ought to worry that these people are responsible for the education of our children. They are a classic example of provider dominance in a market. They have been hugely influenced by an education establishment (the Blob) that has embraced failed left-wing doctrines that seek to promote an equality of opportunity by delivering the lowest common denominator rather than promoting excellence and elitism. They have failed generations of children with their left-wing doctrines.

FREEAt the heart of the problem of public service failure is the doctrine of “free at the point of delivery”.  If people did not pay for their petrol, car use and pollution would rise hugely; if food was a “free” commodity, people would binge on the most expensive offer but quality would fall through the floor. Markets create purchaser power to combat provider power. If parents were paying for their children’s education, they would demand greater accountability of schools and teachers.  If patients were charged for GP consultations, they would be less inclined to miss them as often as currently happens.

nurseProvider reputation remains a real issue. People attribute God-like qualities to doctors, nurses and teachers. This is not always deserved and this provider dominance creates an unequal market with service users – would they were purchasers – at a disadvantage. Government has failed to counter this provider dominance. Governments of the left are in thrall to their union paymasters. Governments of the right are vulnerable to the accusation of “privatisation” which frightens the customers.  This is ironic, given that GPs in the NHS have traditionally been independent business men and women working in partnerships  and to make a profit. The left have ignored this fact and the right has failed to exploit it. I suspect the opportunity is passing because I sense there are fewer entrants to general practice wishing to operate as businesses and more of them  happy to be part of the public sector. Not a good sign!

So, what is the answer?  It has to be market forces. They are starting with academies but the logical extension is education vouchers which allow parents to purchase their child’s education at any school of their choice and, hopefully, with the ability to top-up the fees at independent schools.  This would sort out the Blob (the education establishment, including the unions) and failing schools pretty quickly.

The NHs is trickier, mainly because of the God-like status of the NHS and its providers.  A good start would be charging a modest sum for a GP consultation.  I think this is under consideration. Then we need to strengthen the independent provider status of GPs, based on a private sector model to continue what we have enjoyed since 1950. Longer term, the NHS needs to be disaggregated and to face more market discipline. This will be a long and a hard road but it is the only route to avoid perdition


About Keith R Mitchell CBE

Qualified as a Chartered Accountant in 1967. Pursued a successful career in financial training and publishing until selling his interests in 1990. Elected a County Councillor for the Bloxham Division in 1989. Leader of Oxfordshire County Council 5 November 2001 to 15 May 2012. Chairman of the South East England Regional Planning Committee July 2002 to July 2005. Chairman of the South East England Regional Assembly July 2005 to July 2008. In HM the Queen’s 2007 Birthday Honours, appointed a Commander of the Most Excellent Order of the British Empire in recognition of services to local government.
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