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A new public sector

The Tories had privatisation, Labour has targets. Both are flawed

By John Kay   June 2001

The term public service is old-fashioned but still useful. A public service is an activity whose purpose is to meet the needs of its customers when these needs cannot be appropriately met by the process of profit-making firms operating in a competitive market. Perhaps because competition is impossible, as in electricity transmission. Perhaps because the service is intrinsically uneconomic, as with railways. Perhaps because there is a strong social interest in the quality of the output, as in education or water supply. Or perhaps because commercial motives are incompatible with the ethos that customers expect from the service, as in…

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