Public and Private Ownership

Ownership

Within a mixed economy: private and public ownership exists.

Within a mixed economy: private and public ownership exists.

Public Sector

Public Sector Owned / controlled by

central / local government.Mainly funded through taxes. Essential services for good of

whole community. Profit not usually a major

objective. Other Objectives can be:

Save jobsKeep prices low

This Provides the following services:This Provides the following services:

Public Sector

Central Government

• Health • Education, • Transport • Defence

Public Sector

Local Government

• Law, order • Environmental services

• Transport, Communication

Local Authorities provides such as:Local Authorities provides such as:

Privatisation

The selling of state owned assets to the private sector, transferring nationalised industries back into private ownership.

The selling of state owned assets to the private sector, transferring nationalised industries back into private ownership.

Policy pursued in recent years in China although many firms still partly owned by Government.

Policy pursued in recent years in China although many firms still partly owned by Government.

Privatisation

Examples of nationalised industries in UK were (dates show year of privatisation): Examples of nationalised industries in UK were (dates show year of privatisation):

British Telecom (1984)

British Gas (1988)

British Airways (1987)

British Steel (1988)

British Telecom (1984)

British Gas (1988)

British Airways (1987)

British Steel (1988)

Water Boards (1989)

Electricity Boards (90)

British Coal (1994)

Railtrack (1996).

Water Boards (1989)

Electricity Boards (90)

British Coal (1994)

Railtrack (1996).

Now find out anything you can on privatisations that

have occurred in China (Group work 15 minutes activity.

China’s Privatisation

Nuclear power is still a nationalised industry (Why am I happy about this?)

China’s telecom industry has been partially privatised.

Most banks in China are still state owned.

Petro China (oil exploration ) is a nationalised industy still

Real estate, retailing, textiles-lots of privatisation.

Manufacturing- lots of privatisation

Most transport providers are still state owned- Shanghai metro

Buses have been privatised mainly

Government has gained huge revenue from privatisation.

Why are some sectors privatised whilst others are still state owned?

AgainstAgainstIn Favour In Favour

Increased competition – better services, prices.

Greater efficiency – firms strive for maximum profits.

General Points

Privatisation

In Favour In Favour

Revenue for government from sale of assets.

General Points

Privatisation

AgainstAgainst

Redundancies as firms strive for maximum profit- so reduce number of workers.

Unprofitable but necessary services not provided (rural bus services may not be profitable).

General Points

Privatisation

AgainstAgainst

Privatisation

General Points

Safety and quality compromised due to competitive pressures.

Regulation may still be required to protect public interest.

Now turn this around- what are the benefits of state owned nationalised industries? make a list

Private Sector

Private sector organisations owned, controlled by private individuals eg

Sole traders, partnerships, limited companies. –Remember Public Limited companies are in the private sector!

Private sector organisations owned, controlled by private individuals eg

Sole traders, partnerships, limited companies. –Remember Public Limited companies are in the private sector!