Is the public services sector collapsing?
News that social housing maintenance group Connaught will make a "material" operating loss this year as opposed to forecast profits only a few weeks ago of around £60 million has given a short sharp shock to those who believed that the UK private sector would take up the "slack" from the public sector. There is now great concern that contracts which were agreed some time ago may well be wound down and in some cases cancelled as local authorities around the UK look to rein in their spending. So where does this leave public services in the UK?
There is no doubt that the level of public services available across the UK will be impacted by the downturn in spending, no matter what the authorities would have you believe. There is just no way that the level of budget savings required to balance the UK books can be implemented without impacting upon public services. Efficiency savings may well make up a significant percentage of these cost cuts but in the overall picture they will be fairly irrelevant.
As and when the UK economy does improve we could see the private sector filling the vacuum created in the public sector but this may well lead to accusations of "backdoor privatisation".
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