Introduction

The relationship of public and private sectors in the United Kingdom (UK) and the commissioning, procurement and development of public private partnerships is driven by the prevailing political and economic environment. This chapter explores the history of the relationship between public and private sectors and the extent to which the political and regulatory environment of governments and institutions such as the European Union (EU) can help or hinder the efforts of public bodies in seeking to deliver services that determine the health and quality of life for communities.

The political and regulatory environment

In the mid-19th century, when local government was beginning to develop into a more recognisable form, many urban local authorities began to deliver gas, water and sanitation services (University of Warwick, 2012).

In 1945, Clement Attlee's Labour government was elected at a time of severe post-war austerity. It marked the start of a new social-democratic consensus that was to develop over 30 years under successive governments. By 1973, the top rate of income tax for earned income stood at 75 per cent (Clark and Dilnot, 2002). Key industries such as rail, coal and steel, and all major utilities, water, electricity, gas and telecommunications, were publicly owned.

This post-war consensus was turned on its head with the election of Margaret Thatcher's Conservative government in 1979. Influenced by the free market think tanks of the Adam Smith Institute, the Institute for Economic Affairs and the Centre for Policy Studies, the government embarked on a programme of wholesale privatisation. For councils, the Local Government Acts of 1988 and 1992 introduced and extended compulsory competitive tendering (CCT). Services such as waste collection, construction, grounds maintenance and catering were some of the first to be affected. This was later to be extended to white collar architectural and civil engineering design services towards the end of the John Major Conservative government. Although an enthusiastic proponent of CCT, the Major government was keen to portray a less ideological approach to public services than its predecessor.

In 1992, the Major government introduced the Private Finance Initiative (PFI) and branded it as a new form of public private partnership.