Leader: Public v. private feud will stifle new partnerships

July 20, 2001

On Monday, at the Royal Free Hospital in London, the prime minister tried to get the debate about public-private partnerships onto the rails. On Tuesday, he (or transport minister Stephen Byers in his name) pushed it off again by firing London Regional Transport chairman Bob Kiley, who has had many sensible things to say about how to lever in private funds for public projects and how not to. It is important, if anything is to be achieved by this second Labour government, to de-polarise this crucial debate.

The option preferred by the large public-sector unions for all investment to come from the taxpayer is a recipe for unacceptably slow improvement: public spending on a level that would make a difference quickly to infrastructure renewal would be too far out of line with any prudent economic policy even if the chancellor were less obdurate than Gordon Brown.

The alternative is not, however, as John Edmonds of the GMB and other union leaders would have us believe, confined to inviting private companies to provide public services at a profit. In the Royal Free speech, there were some signs of recognition that the voluntary sector and not-for-profit private provision may have a contribution to make. For a government whose science policy relies heavily on the generosity of the Wellcome Trust, an independent charity, such recognition is overdue.

Another sign that the subtleties of this debate are beginning to be explored came this week from the think-tank Demos, which has close links to the network of Whitehall advisers. Surfing the Long Wave, by Charles Leadbeater and Kate Oakley, is concerned with how entrepreneurialism can be embedded in British culture. It includes references to encouraging entrepreneurialism in public services as well as in the private sphere; it recognises the role of universities and academics; and it stresses that local collaboration and innovation involving the full range of public, private, for-profit and not-for-profit organisations can be seriously cramped by intervention from the centre.

The contribution the higher education and research communities can make to this debate is still underestimated and underexploited. It is not just a matter of educating people in ways that foster entrepreneurial attitudes (though that will help) or of encouraging people to form spin-off companies (though they are important to fostering growth industries). There is also a growing pool of management expertise in universities and research institutes where the challenges of making good the deficiencies of public funding by developing private sources of revenue have been addressed with some urgency over the past 20 years.

Managing academic institutions is no easy business. Rosemary Deem's survey shows the resentments and strains that emerge as financial and more traditional academic values collide. But the second part of our THES survey of universities' wealth shows the impact successful management can have. The government would do well to seek advice on dissolving barriers between public and private from those used to crossing them. This would be better than reinforcing those barriers with insulting talk of bringing in private-sector expertise to manage public services and deifying business people who may have given large sums of money to the party but have little idea how public services work. It should also pay more attention to those of its own policies - some of which are highlighted in Leadbeater and Oakley's report and many of which afflict universities - that prevent people involved in public or quasi-public service provision from trying new things, taking risks and innovating. At the Royal Free, the prime minister promised schools and universities more freedom. He needs to deliver that promise.

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