Hello.

My name's Ms. Akomi.

I'm a citizenship teacher from London, and I'm going to be taking you through today's lesson.

Let's get started.

Today's lesson is called, "Should public services be prioritised?" It is part of the wider unit, "How does the economy work?" By the end of today's lesson, you will be able to explain how different ownership affects funding and discuss whether public services should be privatised or owned by the government.

The keywords we're gonna hear in today's lesson are public.

This means in this context, owned and run by the UK government and funded out of tax.

Private.

This means to be owned and run by companies that have nothing to do with the government and are funded by shareholders and investors.

And lastly, privatised, where public services have been sold by the UK government to private companies to run on their behalf.

We're going to start by thinking about how different ownership affects funding.

A public service is one that is there when anybody needs it, so an example of these might be national or local services, things like the emergency services, the ambulance, the fire, the police, the justice system, so things like courts, tribunals and magistrates, health and social care, things that look after elderly people, the hospitals and doctors, education meaning schools, nurseries and teachers, police and armed services, the army, the navy, the RAF, the police.

In the UK we have what we can think of as a combined economy.

That means that public services are currently owned by the government or private companies.

In a combined economy like the UK, both the public and private sectors play a role in providing those goods and services that we saw on the slide before.

While the government manages essential public services like healthcare and education, private companies often deliver services in area like transportation and utilities.

It is important to be aware of the debates surrounding the ownership of public services.

People have lots of different views.

Some people think the public services should be owned by the government.

Others think that services should be owned by private companies.

Some people think that a combined economic model like the one that we have at the moment should continue.

Let's do a check.

I'd like you to fill in the missing words in the following sentence.

Pause your video and have a go at this now.

Let's check our answers.

The sentence should read, "The UK is a combined economy, which means that the government owned some companies that deliver public services while others are owned by private companies." Public services being under different ownership affects their funding, both how they receive funding and also the amount that they receive.

While the services are publicly owned, they're primarily funded by the government through taxation.

That means that the money collected from citizens and businesses in the form of income tax, national insurance, or business rates, and also other taxes are used to fund these public services.

A key example of a publicly owned system is National Health Service, the NHS.

This provides free healthcare at the point of use for all UK residents.

It's funded through public funds given to them by the government.

For example, in the Autumn 2024 Budget, the government increased the money given to the NHS by 4.

7% to 181.

4 billion pounds.

They promised another 3.

3% in 2026 to increase it to 192 billion pounds.

This makes it one of the largest areas of public spending.

All of this money goes towards things like hospital care, GP services, mental health support, and public health initiatives.

The government decides how this funding is distributed across different areas of healthcare.

They would choose this based on factors such as the population needs, the waiting times, and the regional demand in a particular area.

Let's do another check.

I'd like you to explain one way in which the NHS is funded with an example.

I'd also like you to explain one reason why the NHS is publicly funded with an example.

Pause the video and have a go at this now.

You might have said, "The NHS is funded through taxes paid by the public to the government.

For example, income tax, national insurance, and business rates fund the NHS." "The NHS is publicly funded by the government because it encourages equality.

Different areas within the NHS are allocated a particular amount of money from the budget according to the population and the need." On the other hand, when public services are privatised, the ownership in the funding shifts away from the government and towards private companies.

The companies often aim to make a profit.

That can really change how the services are managed and funded.

When Margaret Thatcher came to power as a Conservative Prime Minister in 1979, privatisation was only a minor part of the manifesto, the things that they set out they want to achieve.

However, it became a really core part of the ideology, the big ideas that the party thought were important throughout the 1980s and the 1990s.

As a result, lots of industries and utilities that had been nationalised under Labour became privatised.

That meant that they were sold to private companies with the aim of improving efficiency.

An example of this is the privatisation of British Rail.

Before privatisation, British Rail was a government funded public service.

After privatisation, different rail franchises were sold to private companies.

This introduced competition and in some cases improved efficiency.

However, it also led to higher ticket prices and concerns over underinvestment when it came to infrastructure.

So we can start to see some of the debates about whether privatisation is positive or negative coming through in this example.

Other sectors like steel airways, air airports, and aerospace, as well as utilities such as gas, electricity, telecoms and water were also privatised in this period.

British Telecom was privatised in 1984, British Gas was privatised in 1986, and British Steel in 1987.

This trend has continued into more recent years.

The Royal Mail was privatised in 2013.

Let's do a check.

I'd like you to match the service with the year in which they were privatised.

Pause your video and have a go at this now.

Let's check our answers.

British Rail was privatised between 1994 and 1997.

The Royal Mail was privatised in 2013 and British Gas was privatised in 1986.

The funding structure also differs a lot between public and private ownership.

That means where they get their money from.

Public services rely on stable government funding.

This means that there can be long-term planning and there is often a prioritisation of social benefit over profit making money.

For example, the fire service receives funding from local and national government budgets to make sure that everyone has access to emergency support.

In contrast, privatised services often depend on direct payment from users.

That might be something like you buying a ticket to get on a train or service fees.

Investments also come from private shareholders.

The aim is often to have a financial return to make money on that investment.

For example, the End Fuel Poverty coalition stated that 20 private energy companies have made a staggering 457 billion pounds in profit since the start of the energy bills crisis in 2021.

The way a services owned, whether by the government or by private companies, has an impact on how it's funded and operated.

Publicly funded services rely on taxation.

They aim to provide universal access while privatised services are usually funded through customer payments and private investments.

Each model has advantages and disadvantages.

Debates about privatisation often centre around questions of fairness, efficiency, and the overall quality of services that are being provided to the public.

Let's do a check.

I'd like you to place the following words under the correct heading to explain how different sectors are funded.

Pause the video and have a go at this now.

Let's check our answers.

Under public, we should have had taxation, equality, public scrutiny, and quality of service.

Under private, we would've had profit, shareholders, investors, customer payments.

Let's put this into practise.

I'd like you to explain the differences in funding between public and private companies in two paragraphs.

I'd like you to include some examples.

Sofia's giving us a hint.

You might want to use examples like the NHS and British Rail.

Pause the video and have a go at this now.

I asked you to explain the differences in funding between public and private companies.

Your answer might have included some of the following.

"Publicly owned companies are funded primarily through government revenue, which comes from taxes collected from individuals and businesses like income tax, national insurance, and business rates amongst other things.

This funding model ensures that essential services like healthcare, education and public transport are accessible to everyone regardless of their ability to pay.

For example, the NHS is funded through taxation allowing residents to access healthcare services free at the point of use.

The government prioritises public welfare over profit, so these services often aim to provide equal access across all regions and income levels.

In contrast, private companies are funded through investments from shareholders and revenue generated from customers who pay for services or products provided.

Their primary goal is to generate profit for their owners or investors.

For example, after privatisation of British Rail from 1994 to 1997, private companies began running train services and funding came mainly from ticket sales and government subsidies.

This shift often leads to competition, which can improve efficiency, but it can also result in higher costs for users and uneven service quality, particularly in less profitable regions." Next, we're going to think about who should own public services.

The debate about who should own public services, whether it should be the government or private companies is a contentious one.

That means that people have quite a lot of disagreements about it.

This is because it affects everyone.

There are strong arguments both for and against it, and we're gonna look at lots of real life examples to help us get a better understanding of this issue.

Some arguments for privatisation include the idea that companies that are run by private companies are more efficient.

Lots of people say that private companies want to make a profit, so therefore, they work harder to save money and improve the quality of the services.

A good example of this is British Telecom, BT, which used to be owned by the government and then was privatised in 1984.

After privatisation, there was more competition between different services.

That led to better services and new technologies being introduced quicker.

Another example is healthcare.

Private companies offer extra services to help reduce waiting times in the NHS.

Some companies also will invest in advanced technology such as AI powered imaging tools and surgical robots.

That might lead to quicker and more accurate diagnosis and treatment.

Supporters of privatisation argue that this kind of innovation won't happen within the government run sectors because private companies have more money to invest into those ideas.

Let's do a check.

I'd like you to choose the correct word in each sentence about private healthcare.

Pause your video and have a go now.

Let's check our answers.

Private companies invest in advanced technology.

Some companies use surgical robots, which can lead to quicker treatment.

Innovation happens quicker when healthcare is owned by private companies.

It is more important for private companies to make a profit.

Some people also argue that privatisation can help reduce the pressure when it comes to government spending.

Instead of the government having to pay for everything, private companies use their own money to run those services.

For example, we have something called the Private Finance Initiative, the PFI.

This is where private companies help to fund big public projects like hospitals and schools, meaning the government doesn't have to cover all of the costs upfront.

An example of a private financial initiative is the with Wythenshawe Hospital in Manchester.

In the late 1990s, Wythenshawe Hospital was redeveloped under a PFI deal worth around 113 million pounds.

Private companies funded the construction of new facilities including modern operating theatres and advanced medical wards.

In return, the NHS Trust agreed to repay the cost over a 35 year contract with regular payments covering the initial cost, interest and ongoing maintenance services.

Like other PFI deals, this allowed the government to avoid the large upfront costs that it would've cost in order to build that hospital and improve and put in state-of-the-art facilities.

This was much faster than if the project had just relied on public funding.

However, the long-term financial burden was significant, and this shows a downside to PFIs.

By the end of the contract, the total repayments were expected to be over 480 million pounds.

This was more than four times the cost of the original construction.

So we can see a negative side to this as well.

What does PFI stand for? Pause your video and choose the correct answer.

The correct answer is Private Finance Initiative.

Some arguments against privatisation include the idea that it can degrade service quality and accessibility.

Thames Water demonstrates this concern having recently significantly polluted rivers and accumulated lots of debt while paying billions in shareholder dividends.

This raises concerns about whether private companies prioritise service quality or whether there is more of a concern with making money.

Another downside is that privatisation can lead to higher costs for users.

Private companies are often aiming to make a profit.

That means that they might charge more for their services.

When we think about the water industry, reports have shown that water bills in England and Wales might rise by up to 36% between 2025 and 2030.

The increase would help companies pay for fixing old pipes and infrastructure.

So although it's not being paid for by taxes like public funding, citizens are still paying for this in a different way through their utility bills.

There's a risk that privatised services might not always run smoothly.

An example of this is Metronet, a private company that was in charge of maintaining part of the London Underground.

The company failed to deliver on its promises and the government had to take control again to keep the services running properly.

The Department for Transport stated that this cost taxpayers up to 410 million pounds when the company collapsed.

Which of the following pupils is in favour of privatisation? Andeep says, "I think it's better to have services we can hold to account more and scrutinise more easily." Sam says, "I would like the maximum amount of money spent on new innovations and advanced technology." Laura says, "I would prefer to have lower costs and have services regulated more officially." Pause the video and choose which student is in favour of privatisation.

The correct answer is Sam.

Some other arguments about privatisation are as follows.

Arguments in support are that people only pay for services that they use instead of higher taxes.

Private companies might run services more efficiently due to competition.

Against includes the idea that there might not be equal access to services for everyone regardless of income or location.

Consistent service levels across the whole country go against this idea of privatisation.

Some more arguments in support of privatisation.

It can reduce government spending freeing up funds for other priorities.

Employees and private companies might earn higher salaries, attracting more expertise.

It encourages consumer choice and competition.

Some arguments against include services like local bus routes may not exist without government funding 'cause they might not make enough money that private companies wouldn't want to fund.

There's greater job security for workers in government owned services.

Wealth distribution through taxes ensures that high earners contribute more.

Some more arguments in support of privatisation.

Policies are less likely to change frequently because private companies are not affected by elections.

Private companies focus on short term profits, which can mean faster innovation.

Private companies tailor services to demand, improving user satisfaction.

Some more arguments against.

Government ownership ensures consistent policies even if leadership changes.

Long-term investment is more likely with government run services.

Infrastructure and service standards remain consistent across the country.

We can see there are so many arguments both for and against privatisation, and this demonstrates this is a really complex issue with no clear consensus.

Rather than thinking of each side of it as completely right or wrong, it might be better to look for a compromise.

Perhaps the UK's combined economy is better.

We are going to have a go at deciding.

Pause your video and complete the sentences using two keywords.

Let's check our answer.

During elections, services are often part of manifestos.

This mainly affects public services because they're accountable to the government.

Private companies might not invest long term, whereas public companies will invest in infrastructure.

Although private funding improves innovation, public funding improves equality across society.

Let's put this into practise.

I'd like you to consider the statement above and evaluate whether or not you agree.

Public services should all be owned by the UK government.

Lucas is giving us a hint.

"Make sure you give both sides of the argument, decide whether you agree or disagree.

Which side of the argument do you think is the strongest?" Then come to a conclusion.

Pause your video and have a go at this now.

I asked you to evaluate the statement, "Public services should all be owned by the UK government." Your answer might have looked like this.

"The question of whether all public services should be owned by the UK government or not is complex with valid arguments on both sides.

One argument for public ownership of services is that it ensures fairness and equal access for everyone regardless of income or location.

A strong example of this is the NHS, which provides free healthcare funded by taxes.

Ensuring treatment is based on need, not wealth.

Government owned services also maintain consistency across the country, meaning people in rural areas can access essential services like bus routes that might otherwise be cut if left to private companies as they may not provide enough profit incentive.

Additionally, government ownership also protects long-term investment in public services.

A clear example of why this matters can be seen in the failures of Thames Water, a private company that has faced criticism for environmental damage and failing to invest in infrastructure while paying out large dividends to shareholders.

This shows that private ownership can sometimes prioritise profits over vital improvements.

The government, on the other hand, would more likely focus on long-term infrastructure projects making this argument particularly convincing in ensuring essential services are maintained for future generations.

On the other hand, supporters of privatisation argue that private companies can run more efficiently and encourage innovation.

The privatisation of British Rail in the 90s introduced competition between train operators leading to improvements in service quality and investment in new technology.

Private companies can also offer people more choice.

For example, private healthcare providers allow those who can afford it to pay for faster treatment, reducing pressure on the NHS.

Systems like the Private Finance Initiative allow private companies to fund projects such as the redevelopment of with Wythenshawe Hospital.

This helped the government avoid large upfront costs.

This argument is persuasive 'cause it shows how private investment can lead to faster improvements and increased efficiency.

In conclusion, while privatisation can bring efficiency, innovation, and reduce short-term spending, the arguments for public ownership are ultimately stronger.

Public services are essential for ensuring fairness, equal access, and long-term investment.

This benefits everyone, not just those who can afford to pay.

Therefore, I believe key public services should be owned by the UK government to guarantee they serve the needs of citizens regardless of income or location." You might have concluded on the other side.

"In conclusion, while public ownership ensures fairness and equal access, privatisation offers stronger benefits in terms of efficiency, innovation, and reduced government spending.

Private companies have the motivation to improve services quickly and meet customer demands because of competition and the need to stay profitable.

This can lead to better quality services and faster development of infrastructure as seen with improvements in rail services and healthcare options.

Therefore, I believe that privatisation is a better approach for managing public services.

It encourages progress while allowing the government to focus its resources on areas where private investment isn't possible." Lastly, your conclusion might actually be in favour of both.

"In conclusion, the strongest approach seems to be a combined economy like the system the UK currently has, where both public and private sectors work together.

Essential services such as healthcare and emergency services should remain publicly owned to ensure fairness and accessibility, while privatised services can drive competition, innovation, and efficiencies in area like transportation and telecommunications.

This balance allows the government to guarantee basic needs are met for everyone whilst encouraging private companies to improve services and offer consumer choice.

This system combines the best of both worlds, creating fairness whilst also fostering economic growth and innovation." Today we have been learning about whether public services should be privatised.

We have learned that public services like the NHS are funded by government through taxes, ensuring equal access for all citizens, whereas services like British Rail after its privatisation are funded by customer payments and private investments often aiming for profit.

Public ownership provides consistent service across the country, job security, and long-term investment as seen with government subsidised rural bus routes.

Privatisation on the other hand, can lead to increased efficiency and innovation.

The UK uses a combined economy bringing together public and private ownership to balance fairness with competition and innovation whilst ensuring economic growth and financial stability for the country.

That's the end of today's lesson.

Thank you for joining me.