Privatisation, old and new

by Alex Nunns

‘Privatisation’ is a politically-charged term without a precise definition. In Britain it is associated with the sell-off of nationalised industries and utilities under Margaret Thatcher and John Major. The classic model involved whole enterprises being moved into private ownership through the mass sale of shares.

But historically this is only one manifestation of privatisation. Some supporters of privatisation have defined it so broadly as to mean “the act of reducing the role of government, or increasing the role of the private sector, in an activity, or in the ownership of assets.”[1] Academic definitions accept that the deregulation of state monopolies, the outsourcing of state responsibilities and the cessation of services that were once offered by the state can all constitute privatisation.[2]

The government denies that it is privatising the NHS. It argues that while the health service remains free at the point of need, funded from taxation, it is still public. But access does not determine whether a service is public or private. ITV is free for all to watch, but everyone recognises that it is different from the BBC. Neither does public funding automatically translate into public service status. There are examples of private ventures that are publicly funded, such as care homes whose residents have their fees paid by local authorities.

The government’s claim does not stand up against the academic definitions of privatisation – if the state is outsourcing services that it previously provided, it is reducing its role. Instead of delivery by bodies ultimately accountable to the public, we have relationships based on contract law with companies accountable to shareholders for the profits they make. When this process is repeated simultaneously across many different areas, it adds up to the ‘patchwork privatisation’ of the NHS.


[1] E Savas, Privatization: The Key to Better Government 3, 1987
[2] See P Starr, The Meaning of Privatization, Yale Law and Policy Review 6, 1988. He identifies four types of privatisation: “First, the cessation of public programs and disengagement of government from specific kinds of responsibilities represent an implicit form of privatisation. At a less drastic level, the restriction of publicly produced services in volume, availability, or quality may lead to a shift by consumers toward privately produced and purchased substitutes (called "privatization by attrition" when a government lets public services run down). Second, privatization may take the explicit form of transfers of public assets to private ownership, through sale or lease of public land, infrastructure, and enterprises. Third, instead of directly producing some service, the government may finance private services, for example, through contracting-out or vouchers. Finally, privatization may result from the deregulation of entry into activities previously treated as public monopolies.”


This is a list of the elements which may help to define NHS privatisation and some of the media stories that appear when you Google these terms...proof its happening?

The anatomy of privatisation


Media story

An openly competitive market


NHS services to be opened up to competition

Outsourcing of NHS provision


Hundreds of contracts signed in biggest ever act of privatisation

Withdrawal / restriction of NHS provision


NHS care, including Hip and Knee operations rationed

Break up of public bodies and accountability


The NHS will soon be less accountable, good news for the reform lobby

New legislation / bodies to promote market


Biggest revolution in the NHS for 60 years

Political support / implementation strategy


NHS reform bill passes with government bloodied but unbowed






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