Report: Privatization's Impact on the UK Economy - Healthcare & Legal

This report examines the impact of privatization on the UK economy, specifically focusing on the healthcare and legal sectors. It begins with an executive summary outlining the advantages and disadvantages of privatization in these sectors. The report then delves into healthcare privatization, discussing various arrangements like contract management and load shedding, using the UK as a case study. It further explores legal privatization, focusing on prisons and court services, and analyzes the potential benefits and drawbacks. The report then presents arguments for and against the privatization of the NHS, citing various sources and viewpoints. Finally, it provides a reflection on the privatization of the NHS, considering its implications for the British society and its citizens.

Running head: IMPACT OF PRIVATISATION ON UK ECONOMY
IMPACT OF PRIVATISATION ON UK ECONOMY
Name of the Student
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1IMPACT OF PRIVATIZATION ON UK ECONOMY
Executive Summary
This report provides a description of the effects of privatization on the healthcare and legal
sectors of the United Kingdom. Privatization of the healthcare and legal sectors had both
advantages and disadvantages. This report also provides the arguments of individuals for and
against the privatization of the NHS. Lastly, the report provides a reflection on the privatization
of the NHS. Although NHS is a premier healthcare institution, which believes in providing
quality care to all individuals, but the recent shortcomings will not only contribute to its already
dwindling future but also impact the lives of the citizens of the country. Keeping this mind, it is
essential that privatization of NHS be carried out in order to ensure safe and effective treatments
to all individuals.

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Table of Contents
Introduction......................................................................................................................................3
Healthcare privatization...................................................................................................................4
Legal Privatization...........................................................................................................................6
Arguments for and against the privatization of NHS......................................................................7
Reflection on NHS privatization.....................................................................................................8
Conclusion.......................................................................................................................................9
Reference List................................................................................................................................10

3IMPACT OF PRIVATIZATION ON UK ECONOMY
Introduction
Privatization is the method by which assets as well as functions are reallocated from the
public sectors to the private sectors. Privatization plays an important role in progressing towards
growth. The acceleration of privatization began in the 1990s. Privatization transactions have
played an important role in the development of economies and in turn have necessitated the sale
of various public utilities (Brown 2018). Privatization has mainly been associated with economic
growth but it also has encompassed other factors like improvements in economic qualities and
distributional performance. However, the importance of privatization is highly varies in different
countries (Estrin and Pelletier 2015).
The change of ownership from public to private sectors were due to the fact that public
ownerships resulted in detraction from maximization of economic welfares. Moreover,
ownership changes can result in improvements in economic performances by bringing about
changes in the mechanisms with the help of which various institutional arrangements impact the
motivations of the managing enterprises. Some of the benefits of privatization are improved
efficiency, lack of any political interference, pressure from shareholders increase efficiency,
increased competition results in increased efficiency, among others. Some of the disadvantages
of privatization are natural monopoly, lack of public interest, loss of potential dividends by the
government, fragmentation of the industries, among others (Sharifan and Badini 2015; IB 2018).
This report will provide a description on the impact of privatization on the UK economy
with focus on healthcare and legal sectors. It also provides the arguments that debates for and
against the privatization of the NHS and finally provides a view on the privatization of the NHS
and its subsequent effects.

4IMPACT OF PRIVATIZATION ON UK ECONOMY
Healthcare privatization
According to the World Health Organization, privatization in healthcare is associated
with non-government sectors being involved in financing and distribution of healthcare services
(Who.int 2018). Privatization of healthcare play an important role in the economic growth of the
industrialized nations and with the increase in healthcare costs, decrease in efficiencies of the
quality of care provided to the patients and the eventual decrease in health resources,
privatization has been believed to be important in overcoming these shortcomings. Supporters of
privatization believe that transfer of authorities from public to the private sector will ensure
effective market competition and also help to improve the quality of care provided to individuals.
Privatization in healthcare is often associated with a variety of arrangements like contract
management, contracting out and load shedding. Contracting out of healthcare services with the
help of the private sectors is associated with commercialization and state governments are said to
utilize this theory to provide services with respect to healthcare to individuals having Medicaid
or medicare insurances (Basu 2012). Another importance associated with the privatization of
healthcare is the management of contracts of public hospitals. With the help of contract
management, hospital operations like management of services, food services and laundry are
carried out with cooperation from the private sectors, while responsibility and the accountability
of the services provided remains associated with the public sector. Load shedding refers to the
form of privatization, which is associated with the complete transfer of performance and
responsibility of healthcare service delivery to the private sectors. Thus, such form of
privatization ensures complete control over the healthcare sector with no form of participation
from the public sector (Alliedacademies.org 2018).

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An example of such privatization in the United Kingdom is the sale of unwanted NHS
properties to the private sectors contracting out of healthcare services both clinical as well as
non-clinical and provision of incentives to individuals enabling the procurement of private health
insurances. Privatization in the United Kingdom with respect to healthcare can be explained on
the basis of 4 key aspects. These are private finance and the healthcare provision, public finance
and private healthcare provision, subcontracting the services of the NHS to the private sector and
commercialization of the actions of the health authorities (Givan 2016). The conservative
government of the United Kingdom has encouraged the progress of the private sectors keeping in
mind the presence of limited resources with respect to delivery of healthcare services. Thus, the
private sector functions to supplement the activities of the NHS in order to provide efficient
healthcare services to the population. Private funding and privatization of acute healthcare
services in the United Kingdom ensures that increased healthcare resources and facilitates the
choice of services by the individuals (Reynolds and McKee 2012). However, increase in
competition results in concerns associated with profit motives, which is not compatible with the
non-profit healthcare tradition of the country. The privatization of long- term care services for
the elderly is another type of privatization that is represented in the United Kingdom. Other
various forms of privatization in the United Kingdom is the private provisions on ancillary
services. According to the Government such subcontracting of ancillary services claimed
reduction of healthcare costs but also such reductions have not been compared with the various
unquantified costs. Moreover, it has been criticized that such cost savings is associated with poor
wages of the labour force, particularly the female part time employees. The NHS five year
forward view ensures efficiency savings of up to 33 billion dollars by 2020-2021
(England.nhs.uk 2018). The most effective way of cutting costs of the NHS was to use the

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private companies in dealing with the services. According to the five year plan, shift of care to
private sectors would ensure that a third party rather than individual hospitals will look into the
people’s treatment, which in turn would help to curb the inefficiencies in the healthcare sectors
(Johnston 2018).
Legal Privatization
The involvement of the private sectors in the prisons and other probation services of the
United Kingdom are increasing at a rapid rate. Approximately one of six prisons in the United
Kingdom are run by private sectors and there are very few staff who are employed with low
wages. Some believe that such privatization of prisons results in reduction of costs when
compared with the government run prisons. Moreover, they also believe that such privatization
results in efficient running and administration in the prisons. However, such privatization results
in overcrowding of the prisons and this has been considered the main reason of the savings that
have been achieved. Such overcrowding in the privately run prisons are far greater than the state
run ones and this poses a serious concern with respect to the impact of such overcrowding on the
inmates (Hadley 2018).
There is also an increasing concern with respect to privatization of the court and legal
services. With the privatization of the legal services, ‘Her Majesty’s Courts and tribunal
services’ will be offered to lowest as well as to the highest bidders from the private sectors with
respect to provision of buildings and staff. This will ensure that petitioners are charged with
hefty fees, which is above the normal and legal costs, for using the services the judicial system.
This will enable the judicial system to be transformed into a profitable enterprise with the aim to
gain attractive returns for the investors belonging to the private sectors. However, such idea of

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profit with respect to the legal system is not valid. This is because the judicial system is not a
business initiative but a fundamental right of all the citizens. However, with privatization of the
legal system the court staff who play an important role in proving the undoing and maintaining
the records of the petitioners, witnesses, jurors or judges will also entitle to partiality in order to
obtain financial gains. This in turn will give rise to preferential treatments, queue jumpings and
judge selections. However, privatization of the legal system was also associated with
improvements in the relationships between the staff and the prisoners, increased well-being of
the prisoners, among others. However, there are mixed reviews that some private sector prisons
are worse than the public sector prisons with respect to safety and use and abuse of the
authorities (Vine 2018; Sharifan and Badini 2015).
Arguments for and against the privatization of NHS
Fraser Coppin of the Badger have provided his thoughts in favour of the privatization of
the NHS. The founding principle of NHS is associated with providing universal healthcare
services to all citizens based on need rather than on the ability to pay a huge sum of money.
However, although NHS is a highly celebrated British institution, there are various problems
with its functioning. However, privatization of the NHS in order to bring about healthcare
reforms is not considered to be a wise decision by the public and instead is considered to be a
political suicide. The NHS is in a poor condition and compared to other organizations like the
WHO, OECD and also the Commonwealth fund, it ranks third from the bottom among the
healthcare institutions of developed countries. In the category of health outcome it ranks second
last and according to the Guardian “the only black mark against the NHS was its poor record of
keeping people alive”. Moreover, the ability to treat patients with severe illnesses like prostrate,
lung, breast and bowel cancers is very low in the United Kingdom as compared to Netherlands,

8IMPACT OF PRIVATIZATION ON UK ECONOMY
Germany and Belgium. Apart from decrease in life expectancy rates, there are also shortage of
hospital beds in the United Kingdom. Lack of funds, clinical failure mismanagement of wastes
are some of the common problems faced by the NHS. With such a failing system, the taxpayers
money is going down the drains. Thus, the role of privatization is to ensure the efficacy of the
NHS. This would be in the form of a social health insurance system that “combine the
universality of a public system with the consumer choice, competitiveness and innovation of a
market system”. Such a social health insurance system would ensure access to quality care to all
individuals irrespective of their incomes. It will also help to ensure quality and efficiency as well
as favorable patient outcomes (The Badger 2018). According to Thomas Cawston of the think
tank Reform privatization of the NHS would enhance competition and in turn would maximize
the healthcare choices for the patients. It will enable the patients to choose the healthcare
provider and the type of treatment (Theweek.co.uk 2018).
However, Jessica Hubbard of the Badger is against the privatization of the NHS.
According to her “If the NHS were to be privatised, I feel as if there would be a ‘crackdown’ on
‘health tourism’ and a lack of decent healthcare for those who can’t afford it”. Privatization of
healthcare leads to loss of jobs, funding gaps and bad services. Moreover, privatization of the
NHS would lead to low wages, long hours at work, poor service and safety and increased worker
strikes (The Badger 2018).
Reflection on NHS privatization
The NHS is considered to be a keystone of the British society and is based on the
principles of free universal healthcare to all the citizens of Britain (Nhs.uk 2018). The NHS
provides equal healthcare services to all the citizens and my initial view was that such

9IMPACT OF PRIVATIZATION ON UK ECONOMY
privatization of the NHS would impact the fundamental rights of the citizens to get quality
healthcare service at affordable prices. My initial reaction was that such privatization would lead
to provision of quality care to only those individuals who have the money to afford it. However,
keeping in mind the shortcomings of the NHS as well as the high mortality rates in the United
Kingdom, it is my view that privatization would ensure safe and effective treatments to the
citizens. Moreover, with the introduction of the social health insurance system, it will be
beneficial for all individuals irrespective of their incomes to get quality care even after
privatization.
Conclusion
Privatization is the transfer of assets from public to private sectors with the aim to
refurbish the dwindling finances with respect to public sectors. This report provides a description
on the impact of privatization on the healthcare and legal sectors in the United Kingdom.
Although the privatization in healthcare sectors have various advantages like efficient, quality
care, patient safety, among others. There are also disadvantages like job losses, increased costs of
care, low employee wages. Privatization of the legal system also results in enhanced efficiency in
the prison workings, however, it results in preferential treatments to those who can afford the
services of the judicial system. Moreover, it results in increased partiality and decrease in the
availability of justice meted out to the citizens. The report also provides arguments of individuals
who believe that privatization of NHS will be either beneficial or hazardous for the citizens of
the United Kingdom. Lastly, the report provides a reflection of my views about the privatization
of the NHS, which initially was against privatization but after analysis of the overall outcomes it
seems that privatization is essential in order to save the dwindling future of the NHS.

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Reference List
Alliedacademies.org (2018). Cite a Website - Cite This For Me. [online] Alliedacademies.org.
Available at: http://www.alliedacademies.org/articles/privatization-in-health-care-theoretical-
considerations-and-real-outcomes.pdf [Accessed 19 Jan. 2018].
Basu, S., Andrews, J., Kishore, S., Panjabi, R. and Stuckler, D., 2012. Comparative performance
of private and public healthcare systems in low-and middle-income countries: a systematic
review. PLoS medicine, 9(6), p.e1001244.
Bown, J. (2018). Britain and privatisation: has it worked? - AOL UK Money. [online] AOL UK
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worked/ [Accessed 19 Jan. 2018].
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https://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf [Accessed 19 Jan. 2018].
Estrin, S. and Pelletier, A., 2015. Privatisation in developing countries: What are the lessons of
experience. EPS PEAKS, November.
Givan, R.K., 2016. The Challenge to Change: Reforming Health Care on the Front Line in the
United States and the United Kingdom. Cornell University Press.
Hadley, P. (2018). Justice for sale: the impact of privatisation and cost-cutting on criminal
justice. [online] ToUChstone blog. Available at: http://touchstoneblog.org.uk/2014/05/justice-
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2018].

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IB, A. (2018). Privatisation Advantages and Disadvantages. [online] Getrevising.co.uk.
Available at: https://getrevising.co.uk/grids/privatisation_advantages_and_disadvantages
[Accessed 19 Jan. 2018].
Johnston, I. (2018). How the creeping privatisation of healthcare is damaging the NHS. [online]
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http://www.independent.co.uk/life-style/health-and-families/health-news/nhs-health-service-
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Reynolds, L. and McKee, M., 2012. Opening the oyster: the 2010–11 NHS reforms in
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Sharifan, N. and Badini, H., 2015. Comparative Study and Economic Review of the Privatization
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The Badger (2018). The Big Debate: We need to privatise the NHS - The Badger. [online] The
Badger. Available at: http://thebadgeronline.com/2017/03/big-debate-need-privatise-nhs/
[Accessed 19 Jan. 2018].
Theweek.co.uk (2018). Pros and cons of privatising the NHS. [online] The Week UK. Available
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