Merit of Less Than Optimal Market Solutions for the Delivery of UK Public Services (Essay Sample)

Merit of less than optimal market solutions for the delivery of UK public services
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Merit of less than optimal market solutions for the delivery of UK public services
The public sector has been involved in provision of various services in the UK. Some of these include education, health, banking, media, security and entertainment. Initially, the sector enjoyed monopoly due to lack of organizations providing the same services as well as reduced interactions between various government levels and jurisdictions (Hodges & Mellett 2003, pp 12-16). As a result, the sector compromised on the quality of services provided. Availability of the service became scarce, with the prices of products being determined by the government. There arose in equitability of the services. Eventually, other service providers entered the market. The new entrants came up with ways in which they would capture customers so as to cater for operating costs as well as make a profit. This facilitated efficiency in service provision. They would have to come up with strategies to increase the number of people using their services by exploiting opportunities the public sector had not been exploiting. The monopoly, therefore, was replaced by other markets. The market is now characterized by free entry of service providers and customers. Moreover, perfect knowledge of the market has been enhanced for both the customers and service providers. However, perfect market has not been achieved due to some organizations having added advantages over others. The public sector could be considered at an advantage due to the availability of resources from the government, and having the government making laws that govern the operation of the entire system. As a result, it could come up with laws that would favor the public sector (Prowle 2000, pp 43-48).
There are solutions dedicated towards solving the conditions presented by not attaining a perfect market. It is difficult for full achievement of this market. However, partial solutions could be sought, which would not be considered as optimal market solutions. Flynn (2012, pp 196) suggests that these less than optimal solutions are better than having no markets at all. There are various advantages that are associated with these solutions for the delivery of UK public services. The delivery of services could be categorized into privatization, where governments contract private investors to deliver services, and inter-municipal, where local governments contract each other to create a public market and gain scale in delivery of services (Waring & Bishop 2012, pp 172-178). The question arises in what ways the less than optimal market solutions have been of benefit to the UK services.
One of the merits could be explained in the public choice theory. It suggests that competition promotes market discipline to delivery of public service and concurrently preserving benefits of communal sector engagement. Economies of scale could occur under contracting. However, citizen voice and cross-jurisdictional equity could not be enhanced. The merit provides that since several organizations would be ready to offer the services, there needs to be appropriate provision of these in order to maintain loyalty form customers as well as city managers. This would ensure continuity in the association. Competition leads to organizations seeking for competitive advantage. This is the feature that will make them be attractive to customers. It would include reduction of cost of production in order to have the prices of services lowered, availability such that the services are availed to customers, customization so that customers get services according to individual tastes and preferences, advertising to create awareness and establishing a brand that they would be identified with (Bishop 2003, pp 140-142).
Calder (2008, pp314-315) describes efficiency as another merit that could be closely linked to benefits arising from competition. Lack of competition, as stated earlier, had led the public sector to be reluctant on providing quality customer services. Eventually, this has been changed, with providers working competently to enhance repeated provision. Efficiency leads to reduced costs of services. Some governments could be competent in an area while poor in provision of others. This could be due to availability of a certain resource that another jurisdiction has not been able to attain. Contracting enables the best service providing organization access another area of jurisdiction to administer the quality service in which it has expertise. Therefore, services are enhanced in their satisfaction to customers due to these less than optimal solutions.
Utility is another concept that is promoted. Some resources could be left unutilized if they are only directed towards satisfaction of needs in a certain small area. Contracting could allow the organization offer the services across a larger scope, and hence the resource is utilized better. For instance, a playfield could not be used for some days in a week. The markets provide that other functions from other jurisdictions could be done there. A fee would absolutely be charged. As a result, the hosting organization would benefit from revenue while others would benefit from accessing the facility they have not really acquired to themselves. The local government in London has been recognized as the most effectual local governments in the UK. This is due to its strategic recognition of the services that are most needed in the city at various times, and implement strategies to provide for others when need be. This has seen it exploiting several opportunities presented by the city, and maximize revenue as it reduces costs. This is due to utilizing resources when and where they are most needed.
Services are better provided at subsidized cost due to implementation of these less than optimal solutions. Some services in the public sector could be outsourced during times of emergencies and events. Fire outbreaks could be considered as one of the emergencies that would require collaboration of several service providers in order to extinguish it. Events, such as tournaments and Olympics, have had different jurisdictions and organizations involving in increasing some facilities for the short time these would take place. Some of the services that are collectively offered include transport, sanitary and accommodation services. Sometimes combining forces between organizations could be necessary to satisfy all the customers (Economics & No 2010, pp 1-9). Demand could sometimes rise temporarily. Governments would not have enough time and resources to satisfy this demand. Moreover, if it acquired resources to meet this temporary demand, these resources could either be disposed immediately after the events are over, or they could remain unutilized. This would not be cost effective to the governments. As a result, outsourcing where several providers combine the resources they have acquired over time and utilize them appropriately. The attractiveness of the UK in terms of political stability, financial position, strategic position and developed infrastructure allows for various conferences and sports to be held in the country. London, among other cities, acts as a host to these functions. This has been observed during international events in the UK where Olympics and World Cups are regularly held. Other governments could come in to assist accommodate thousands of visitors who come to the cities from all parts worldwide (Buckley & Pearce 1991, pp 29-36).
Equity is another theory that has been suggested to be one of the requirements in efficient public service provision. It encompasses excellent quality as well as availability of these services at all times. The provision requires a lot of resources to accomplish (Jost et al. 2005, pp 336-350). The resources are in terms of time, capital, equipment, and land. A single government could be unable to provide for all this at the required standards at all levels. As a result, the resources could be shared. There would be appropriate distribution as a result of this collaboration and markets that have led to equitability in distribution. In addition to equity being provided for, the solutions lead to customers having a variety to choose from. The organizations have differentiation. Each is recognized in providing a certain service in a specific way. For instance, one local government could be offering transport services using taxis while another uses buses. Although each of these ways provides solutions for transport problems, the varying ways could satisfy different tastes. A person could be interested in privacy and hence use a cab while another would not mind the interactions and hence prefer buses. This caters for various classes. However, the provision of this variety could not be arrived at if there are no solutions dedicated to promote markets in the public sector (Wright 2004, pp 254-259).
The less than optimal solutions have helped in improvement of services through application of the budget theory that promotes appropriate use of funds. Reduction in cost of provision of these services could be considered to lower as a result of the market introduced in the UK. There are selected those organizations that offer services at reduced costs (Hildreth & Khan 2002, pp 121-129). Customers would require subsidized costs for services. Gateshead is one of the regions that have had reduced costs of services due to these less than optimal solutions. The cost of gabbage collection has reduced (Agasisti et al. 2008, pp 1). There is need for both the governments and people to save. As a result, they would try to decrease the expenses they incur regularly and replace this with considerably lower prices. There are a...