Advantages of Private Sector Flashcards
Private companies use welfare resources more efficiently
Need to make a profit they have less bureaucracy and waste than state welfare. Too much administration and wastefulness reduces profits, so emphasis is placed on efficiency in private welfare provision. This contrasts with the state who relies on the government for its money through taxation.
As private provision is based on profit, Friedman claims it gives a better service to the public. Moreover, the private sector also takes pressure off state welfare. If people are able to pay privately for welfare this will help to reduce the tax burden and reduce waiting lists for state services. Also, through the PFI (Private Finance Initiative) further pressure is taken off state funds by allowing new schools/hospitals to be built by private companies
Private welfare treats recipients as customers
Emphasis on quality of care. This is because private welfare needs to attract demand for their services otherwise they will go out of business. This profit motive contrasts with state welfare which does not need to worry as much if it provides poor quality of service and has long waiting lists as most people have no choice but to use state welfare.
Moreover, private welfare gives people greater choice over their type of care, Eg type of hospital, nursing home, home help etc… People can also avoid long waiting lists by choosing to pay for the care immediately. Giddens said this is a good thing and says state welfare should be combined with the private sector and voluntary sector to cope with the rising demand for welfare today. For example, as demands on NHS have increased the state has contracted out more services to the private sector.
