What?

easier to make profits from the certain commodities that people are always going to need, such as health, education, local government services, the utilities and so on that were once the preserve of government. So not only are these services now more costly because a profit margin has been or is being added into their cost structure,

Seriously? An accountant is arguing that profits mean higher costs?

What?

6 comments on “What?

  1. Cost (to public) of running a public service publicly: capital costs at public sector credit rating + operating costs

    Cost (to public) of running a public service through a private contractor: capital costs at private sector credit rating + operating costs + profit margin/ROI for private operator

  2. Cost (to public) of running a public service publicly: capital costs at public sector credit rating + operating costs + inefficiencies deriving from tractor stats/target chasing and a lack of consumer choice and provider competition

    Cost (to public) of running a public service through a private contractor: capital costs at private sector credit rating + operating costs + profit margin/ROI for private operator

    If there weren’t the probs with public sector provisioning, nobody would want change. We have a crap system, nowhere in the world wants to emulate it. The idea here is, we try to emulate what’s seen as the world’s best system, that of France.

  3. @1 is using capital/operating costs in both equations as if they’re the same. That’s simply not true. In a private sector operation both will come under the influence of market forces whether for good or bad.

  4. Luis,

    He may indeed but, as Peter R’s example shows, it ain’t necessarily true.

    I wonder, apropos both Peter’s examples, how many major Italian companies currently have borrowing costs sufficiently lower than those of their government to allow for quite a reasonable ROI (especially as we’re borrowing so it’s leveraged) on the for-profit provision of public services.

  5. Most impressed that RM is using Amazon to sell his book. Rather hypocritical as Amazon is a heavy user of tax havens and LVCR through the Channel Islands. Rather two-faced and greedy if you ask me.

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