Reply to post: Re: Same job + middleman = higher costs

North Wales Police outsourcing deal results in massive overspend

Ken Hagan Gold badge

Re: Same job + middleman = higher costs

It wasn't always true. There was a time when doing almost anything in the public sector (including nationalised industries) involved layers of crap inserted by special interest groups. This system had evolved over previous decades with weak politicians repeatedly reasoning that spending a bit more taxpayers money was always easier than tackling the SIGs.

When the time came for this insanely inefficient system to collapse under its own weight, transferring those functions out to the private sector actually did save money because the private sector wasn't doing the "same job" and was probably cutting out more middlemen than it inserted.

Something similar was true in the private sector as well, with many distinguished names in British industry making so little money that they were actually worth less than the equipment they were using. The result here was asset stripping, where observant investors bought a company, sold absolutely everything, and walked away with a tidy profit.

Sadly, in both cases you are dealing with a one-off. Privatisation and asset stripping haven't made much *financial* sense for several decades. Opportunities for asset stripping are extremely rare and privitisation only persists in the public sector because too many politicians are innumerate fuckwits who have somehow managed to get degrees in (politics, philosophy and...) economics without actually being able to count.

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