I work with outsourced services on daily basis and I've seen good and bad implementation, for me bad implementation is a sign of bad management, of too little understanding of the the service involved or perverse incentives. But bad management is bad management end of, it doesn't become good because they're dealing with in-house. The only saving grace in the favour of in-house is that in-house employees may be more inclined to work around bad management.

I have, previously and quite specifically, asked you about the issue of low wages that leave people struggling to live even basically. Your response has been that it's 'up to the British public'. It is not up to employers to pay a living wage, but to 'the British public' to decide what – if anything – should be done about low pay.

Despite what KF has to say, I started this thread to point out the lack of responsibility of private service providers and those public servants tasked with overseeing them. One major clause in the the NHS proposals is that the Secretary of State for Health will no longer bear the ultimate responsibility for any shortcomings in the NHS.

Look at what has previously happened with East Coast Mainline (twice) and Railtrack. The private "service" providers are happy to take the profits but as soon as losses become apparent, they hand the shooting match back to the state. Any "efficiencies" usually come at the expense of jobs, pay scales or service to the public, quite often a combination of all three. When new contracts are issues to staff, it is usually left to the public purse to continue topping-up their remuneration through housing benefit and tax credits. They're then left with less disposable income to spend in the economy, so everyone, apart from the service providers loses.

But that isnt a problme being solved by privatisation is it. It is just privatisation and delivering a lesser service.

But those economies of scale will only be applicable if either the private sector is already offering a similar service, or they can offer it to a wider amount of people. Both of those reason would leave us with the question of why? Why is the private sector duplicating public sector work? or why is the private sector able to offer a service to a wider section of the community than the public sector? We also need to remember that economies of scale can quite easily become dis-economies of scale.

That doesnt explain why though does it. It doesnt explain why a private company can legally sustainably and responsibly run a service and make a profit for less cost than the public sector can simply run the service. Is it for example that the private sector will pay lower wages with worse terms and conditions? No whilst this may be a monetary saving on paper, are we then topping up those workers payments with tax credits? If so, in reality, that isnt a saving all. It is an additional cost just one simply moved to a different balance sheet. Are those lower wages and inferior terms and conditions attracting a lower quality of employee? This would leave us with an inferior service and likely wastage elsewhere.

The assumption that market forces would exist to keep that balance between quality and price simply isn’t applicable to the public sector, these are services that you need, services where choice and gimmicks and marketing aren’t relevant. People don’t have the choice to go without Gas and electricity, without water and healthcare, without police and ambulance and fire services, its not practical to walk in to a hospital and then walk out and go somewhere else because you didn’t like the service and it isn’t realistic for someone to set up a small electricy to supplier. These are vast and important industries where market forces don’t apply and where importantly, we cant afford for a business to fail.

Sorry but [url=http://www.birminghammail.co.uk/news/local-news/g4s-set-run-rape-sex-4007378#.UZ5_aQ1XOOo.twitterTHIS[/url literally made me shudder.

Not discussing the other areas, but blaming rising gas and electricity prices on privatisation is plain wrong. That is down to the simple fact that the UK is not self-sufficient in fuel, and hasn't been for a long time. As a result it has to pay market rates for both - which have gone through the roof in the past 15 years. You should also add a significant portion of increased electricity prices being due to renewable energy policies, which are entirely under the control of the government, and nothing to do with ownership of anything.

[url=http://www.telegraph.co.uk/finance/personalfinance/10014779/Water-bills-rise-64pc-in-a-decade.htmlWater bills rise 64% in a decade[/url, which is twice as fast as earnings, with almost a third of the average household bill (compared to 9% in other utility areas) going on profit.

[url=http://www.cnbc.com/id/1007625786 hours away from running out of gas in March[/url

We are now reaping the folly of the 1980s sell-off but "it was a price worth paying"

Whjy are profits up in the energy sector then?

...and again complete, unrelated tosh comes back.

The wholesale cost of gas has gone through the roof - as has oil and to a (lesser) extent thermal coal. Nothing at all to do with privatisation. If profits are 'up' ask the regulator, not me, they control margins. But if you seriously think good old British Gas would have somehow kept prices in check when the international wholesale price has gone up something like 600% in 15 years when Britain's own gas resources are almost non-existent, then you're deluded.

And cod'ead, the very article you've linked to doesn't explain either how British Gas could/would have avoided the very issue you mentioned, which was down to a specific combination of events.

I wasn't talking about water or anything else either. People have a dig at the likes of Dally, then come piling in with just as idiotic, ideologically driven nonsense whenever anyone points out that their oversimplistic guff is just that, and then get p*ssed off when they're called on it.

To me there are some serious questions about what should/should not be run privately vs by the public sector, and whether the claimed benefits actually exist. I certainly have a problem with the way most utilities are regulated in any event. Sadly the chances of any sort of reasonable debate on those issues here is nil. Its red corner, blue corner and ne'er the twain shall meet.

No its not, some people [iperceive[/i your "red corner, blue corner" ideology, and surprisingly its always those who, if categorised, would place themselves squarely in the "blue corner" who whine about this as if they were some sort of oppressed minority.

The fact of the matter is that people have a right to complain about the high cost of utility bills and about their providers, there is no doubt that as a percentage of take home pay the cost of utilities is far higher than it ever was at any other marker point you care to choose and so its right to ask why and the utility companies have to explain why they blame rising raw supply costs and not rising profit margins, there is a disparity there and its plain and simple and everyone can see it - and its got nothing at all to do with politics other than the fact that politicians only seem capable of wringing their hands and agreeing with the public about it whilst being powerless to actually do anything.

You dismiss criticism of the utility industry as "tosh" ... and yet when it pointed out that profits have rocketed, you still parrot the same chorus, that the wholesale price has gone up.
The point is that the price has gone up MORE than it would without that profit-taking.
You then blame the regulator ... failing to recognise that the regulator is only needed BECAUSE of privatisation.
You also blur the issue when you dismiss the idea that "good old British Gas" could have avoided price rises ... You are correct that BG would still have had to cope with rising wholesale prices but, as a public utility, the profit element would not have featured.

"Oversimplistic guff"?
Maybe, but sweeeping denials such as yours (containing only one fact) are just as bad.

According to Ofgem's figures the average net margin on a dual fuel customer is about £95 out of a total bill of £1,420 (compared to anaverage over the past 4 years of less than £14). That compares to wholesale costs of well over £600 and VAT/other costs of over £500. Ofgem also states that the sector as a whole lost money 2004-2009 as it wasn't able to pass on wholesale price rises to customers.

Was everyone complaining that it wasn't fair on utilities back then? Shouldn't they at least have been allowed to break even? Joking aside, what the figures do show is that even setting net margins to zero would have little effect on long-term prices - far less than somehow capping wholesale costs.

BTW when referring to 'tosh' I was referring specifically to the two replies to my post, the first of which addressed water (which I didn't and haven't mentioned), and the second referred to a one-off issue that was nothing AT ALL to do with privatisation.

My issue with a lot of these discussions is that by dumbing them down to simplistic rants (corporate greed etc), people are in in fact making their own arguments weaker when there are genuine issues behind them and they don't take the time to try to find out for themselves at what the underlying causes are.

Here in Australia we have seen electricity prices triple during a period when wholesale prices have fallen in real terms. The actual cause is government-owned utilities massively overspending on infrastructure, and renewable energy policies (including direct subsisidies to the middle class to install solar POV at the expense of working class families who couldn't possibly afford the installation costs). But all the surveys of public perceptions are that the two causes of price rises are privatisation and the carbon tax - neither of which has made much difference at all to household bills at all.

The problem is that targeting utility profits cannot and will not fix the problem in Australia, and cannot and will not fix the problem in the UK.

How do you equate those numbers with rising profits at most (if not all) of the utility companies ?

[urlhttp://www.guardian.co.uk/business/table/2013/may/22/uk-energy-companies-profits-customers-price-hikes[/url

Its one year in isolation but those are impressive figures in a time of recession and with many households seeing a real decrease in their household income year-on-year.

If raw materials go up, this forces the prices up if the companies make the same mark up on a high base cost profits will rise. Not a difficult concept?

Years ago prices may well have been comparatively lower but these were subsidised by taxes that were significantly higher. It would be interesting to go back to the relationship between utility cost and net income under Callaghan and now.

Not a difficult concept at all and if you feel that a supplier of a basic life essential product should gain substantially (these are substantial increases in profit) from a rise in basic raw materials by simple accountancy and non-adjustment of their percentage mark-up, then fine, its good for the company, good for the shareholders, good for their suppliers too - doesn't do anyone else much good but I'm sure there's a reason in there somewhere why it has to be so.




I don't particularly think that Callaghans government were particularly onerous in their tax take and/or subsidy of the nationalised energy providers, he wasn't in power long enough to make that much of an impact, fact is that energy distribution was done that way for forty years until privatisation again (it had previously been a private business anyway) and even then energy costs didn't vary that much - the thing that has changed in very recent years is raw material cost, higher levies and requirements from governments for "green" energy, and the simple rule of capitalism that a company cannot make the same amount (nett sum) of money year after year, it has to increase it nett profit every year or it is viewed as failing, the fact that it is a vital life requirement provider is irrelevant to these rules of the stock exchange.

Capitalism - the premise of which is a reward to shareholders for the risk of stumping up the money. Substantial increases in profits result from substantial increases in the capital employed to fund those profits? Increased profits means increased corporation tax, increases in revenues means increases in VAT revenues? a win win for HMRC and the population in general.

Inflation dictates that a company cannot make the same monies every year otherwise they are going backwards. Higher levels of investment demand higher levels of return or once again the company is going backwards. To increase net profit doesn't have to mean increases in prices it can mean lower operating costs? Either way you lefties will spit your dummy out.

There are numerous alternatives to gas out there and there are a host of government supported plans to reduce energy consumption - the fact that most are too stupid or bone idle to seek them out is not the fault of big bad capitalist organisations.

All you lefties would do well to delve a little deeper into why the country is such a nanny state - because you all believe you know best and that culture has dominated left wing politics since the war - the result greater numbers of individuals/families are looking for the state to provide for them!! The industrious culture we once had has evaporated - we have lost the ability to stand on our own two feet. Gas could be considered an essential but it isn't essential we have it on every hour of every day - there are alternatives?

In the words of JFK "ask not what your country can do for you; ask what you can do for your country."

No it's not a win win. Increased revenue for energy companies takes money that would have been spent elsewhere in the economy. It is both bad for the economy as a whole to have high energy prices and for VAT take as energy is at reduced VAT rate whereas the vast majority of other products in the economy is at the standard rate.


Not true. Inflation is not a one-size-fits-all situation. A company's costs could quite easily decrease due to deflation in their particular cost area.


Again, not true. Higher levels of investment may well follow a period of under-investment, higher levels of investment may be necessary to simply maintain current return due to that previous under-investment or for other reasons, for instance higher competition.


Of course it can. But that's not what's happened is it? As energy prices have continually increased. As have profits.


Which alternatives are these? Care to name them? Along with the host of government supported energy saving plans? I can't think of any significant ones that don't require a lot of money to be stumped up.


Is this in the real world? It's probably because all us lefties are too busy saving up to fund our care in the future. Got to pay for those expense accounts somehow.

Its a bit of a strange choice of quotation to finish off an otherwise republican right wing rant isn't it are you sure you meant to pick John Kennedy ?

If the surplus money was spent on food or children's clothes would the VAT take go up or down? Could be that councils would take the opportunity to increase council tax? You have absolutely no idea where any surplus money would be spent.

Are you for real - cost deflation, this thread is all about energy increases would you say they are going up or down? Given most products require some energy in the process unit costs will rise that is before all the raw materials that also require energy to produce them!!

Investment doesn't mean capital investment - was that a bit over your head?if raw material/finished goods cost more then companies need to invest more in stock to service their business to the same level - if we accept the same level of return is required then company sales and profits will rise even if they sell the identical items to the previous year. Is that really such a difficult concept?

I would suggest both things happen in a well run company - costs lower as processes and technology improve and margins firm as a company's offering modifies to best suit its market.

A two cheap things you can do - loft insulation and cavity wall insulation both attractive government subsidies I got mine done for £80 hardly a large amount of money to stump up!! everyone should do it - how many actually do?

Perhaps if you lefties concentrated running your own life rather than telling everyone else's how to run theirs then you would not be so worried about your care in the future!! - no one deserves to have to care for you.

They fooking well do, you condescending tw[ia[/it!

45 years ago, when I first started working for a living, I entered into a compact with the then-government: I would work and earn money, I would also contribute at the prevailing rates, in the form of income tax and National Insurance. In return, I could expect the comfort of a safety net, in the form of unemployment benefit (claimed once in 1992 for a period of three months) and sickness payments, should I be too ill to work. I was told I could also expect a reasonable pension, once I reached the age of retirement.

Various governments have since chipped away at those benefits, to the point that when I do reach the age of 65 (I just qualify), there's no way on earth I could stop working and retire. Although various governments have dipped into my retirement and benefit pot, none have engaged in the daylight robbery, the current bunch of sociopaths are visiting upon the nation

Generally up, since plenty of food products at your local supermarket are standard rated. And that's if people only spent the difference on those 2 specific areas. Are you suggesting you do know where the surplus money would be spent? It was you making the claim that VAT take would go up despite energy only being reduced rated yet the vast majority of products in the economy are at 4 times that rate.



Are you suggesting there have been no areas of deflation in the economy whatsoever? You're ignoring all other aspects of costs and only focussing upon one aspect. Regardless, my reply was in the context of your specific quote which seemed to be about businesses in general:

Which is untrue for the reasons I initially gave.


I never mentioned capital investment.
A company can under-invest in many areas including stock, if there has been a period of under-investment then it would be unreasonable to demand a higher level of return when investment is adjusted to a reasonable level. My reply was once again in the context of your original quote, which again seemed to be about businesses in general.


How much has it saved you? What about people who already have it? Where are the other schemes? You said there was a host of them? What about the alternatives to gas?


What like telling people they're bone idle and should get cavity wall insulation? Or telling someone to leave their job because the conditions are poor? Or telling an unemployed person to take any job regardless of wages or conditions? Or telling someone to get into the real world?




Are you resorting to condescension because you don't actually know as much as you pretend to? Is the mask slipping? Are you really the uber-capitalist, thriving, self-made businessman? Or is it all a not very elaborate bluff so you can have a few minutes of snorting, Daily Mail-esque anger at all these people who insist on making you pay for things you don't want to? It's true isn't it. You don't actually know what you're on about. Your claims on government schemes and alternatives are a perfect example, you talk big yet can never back it up. Your comments on here and your previous comments on the Leeds board, especially the Jane Tomlinson ones some years ago, lead me to believe you aren't some kind of thriving businessman but merely a not particularly nice person who has little to no compassion or understanding of other people's circumstances or goals in life.

On the gas price question - we have a regulator to prevent market abuse. Is it being said they are not doing their job? Maybe government has set the wrong terms of reference for the regulator? Are you writing to your MP to demand a review of the regulators performance and / or terms of reference? If not then it cannot be an issue of importance to you.

On the VAT question, what is the relative usage domestic v business?

Reality check time.

Yes they do.

However, should a second term of solely Conservative government be elected in 2015 (its a real possibility) then THAT is the time to start thinking about looking for some suitable land upon which to build your family compound in the style of the wealthy of South Africa, high walls, big Ridgeback dogs to patrol the grounds and a couple of grateful hefty men on the gate who's skin colour is slightly darker than yours - get your family inside, and bollax to all the poor people at the gate peering in.

Its the future.

I see, state aid is fine when it lines your own pockets but not when it helps the less well- off.
Why can't you stand on your own two feet?
Ask not what your country can do for you?