Privatization Flashcards
Define privatisation?
Returning a nationalised industry to the private sector
Define Deregulation?
Reducing legal restrictions on an indusrty
3 Example of industries that are regulated and their regulators?
- Gas and Electricity- OFGEM
- Water-OFWAT
- Telephones- OFTEL
What are the 4 functions of the regulator?
- Encourages firms to be more efficient.
- Maintain and improve service
- Control of price to prevent the exploitation of consumers.
- Makes sure firms invest in them selves.
Define contracting out?
Government getting the private sector to produce goods and services.
What is competitive tendering?
The government getting private sector firms to bid for contracted out public sector work.
What are the 3 Advantages of Contracting out?
- lower cost for tax payers, due to private firms being more efficient.
- Higher quality of service.
- competition increase efficiency.
1 Disadvantage of contracting out?
Safety issues, through rushing
What is a Public Private Partnership (PPP)
Projects that use a mixture of government and private companies to accomplish projects.
what is a Public fiance Partnership?
The government getting a private sector company to build and maintain a piece of public infrastructure then leasing it back to the company. e.g. the Maintenance on the London Underground.
4 Advantages of PFI’s?
- Lower cost for tax payers.
- Higher quality products
- reduced government borrowing, due to the leasing
- More efficient use of resources.
4 Disadvantages of PFI’s?
- May be expensive firms get the price to suit them.
- Firms have to borrow money at normal interest rate this increases cost
- Widens income inequalities between those in the PFI or civil servants.
- Hides the true extent of the government borrowing.
