Privatisation & PFI/PPP
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Privatisation & PFI/PPP
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© The Z/Yen Group of Companies 2008
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In 1992, in "The End of History and the Last Man", Francis Fukuyama questioned whether the combination of liberal democracy and capitalism was the most fitting form of government and economics, the culminating form of civilisation. With the demise of centrally planned economies, unable to support the demands of modern societies, Fukuyama was mirroring Marx's contention that socialism would be the culminating form of civilisation. Even if Fukuyama's thesis is correct, that liberal democracy and capitalism are the end of the road, the new challenge is to decide within that system what is best done by the "state" and what is best done by the "market". We move from a few macro-decisions to many micro-decisions. Z/Yen's risk/reward methodology facilitates those decisions.
Since 1979, the United Kingdom has been in the vanguard of Western economies challenging the role of the state by privatising many services formerly provided by the state - telecommunications, gas, electricity, publications, oil, munitions, etc. Privatisation has been supplemented by Private Finance Initiatives, injecting private know-how and expertise into government service provision. Numerous countries have followed the UK's lead. At different paces and with different emphases, societies around the world are working within the combination of liberal democracy and capitalism to see where the boundary between the market and the state is best placed, and when that boundary encompasses both state and market. In all likelihood this will be a dynamic realignment; some activities may be better done by the state today and by the market tomorrow, or vice versa. Nevertheless, it is clear that privatisation taken as a whole has been beneficial to societies which have pursued it vigorously. Z/Yen people have been part of that transformation and have much to offer in privatisation programmes.
We believe that this continuous process of change, with public sector organisations repeatedly spinning-off 'non-core' activities, will continue for some time to come. Z/Yen people have led or advised on privatisations in oil, utilities, publishing, catering, manufacturing, defence, research, banking, financial services and mining in the UK, the USA, Central Europe and Africa. Z/Yen has also been involved in several billion pounds of private finance initiatives in hospitals, testing facilities, power stations and other government establishments. Z/Yen's understanding has made it one of the leading advisors in sensitive privatisations and public finance projects.
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The
diagram shows the never-ending circle that public-sector organisations face - as
what they are there to do becomes closer to a definable service, it becomes
questionable why it is being performed in the public sector. Z/Yen works with
government organisations to specify their strategy (why are we here), work out
how the organisation will deliver (planning), develop the capabilities
(performance improvement), identify value for money (benchmarking,
cost/benefit), examine private and public offerings (core/non-core studies,
privatisation programmes) and help the new entities with management, finance,
marketing and operations.