Oh come on, IA. What do you think the banking crisis was?
There is no inherent reason why an organisation of people shouldn't be effective and efficient regardless of whether they are publicly or privately owned. The major difference is that the public sector is largely protected from the consequences of getting it wrong, so over time, poor performers and bad practices settle in. Mediocrity becomes the norm, and outstanding performers viewed as troubling. When private sector organisations get to a certain size or monopoly, or operate in a market which has to be maintained, they too get fat and lazy, to wit, the banks.
The public sector in the UK needs to be managed with discipline and to high performance standards. People need to be fired often and easily unless they do their jobs effectively. Unions should be removed from all public sector involvement - nowadays they operate only to protect the useless and pointless. Governments must publish their performance indicators and budgets in detail to the public (as the shareholders) and order managers to deliver on them without fail or lose their jobs - this includes the minister and permanent secretary, both of whom are then barred from further office. Promotions should go to the most able, not the most senior. And public service to these standards should be celebrated just as a entrepreneur is respected.
This kind of hard discipline could be usefully imposed on large corporates too. A businessman with a small, or medium sized business will often lose most of what he owns if he isn't efficient. A corporate boss borks a business and simply moves on to another high paid job with his buddies. Organisations, from top to bottom, are most efficient when the people therein are driven by the knowledge they have a lot to lose, as well as being recognised and respected with status in their community when they achieve.
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