How Public Sector Businesses Operate

How Public Sector Businesses Operate

Purpose and Goals

  • Public sector organisations exist to provide services for the benefit of the community.

  • Their main goal is not to make a profit but to ensure fair and accessible provision of essential services.

  • Public organisations are often required to meet government-set targets and objectives.

Funding of Public Sector Businesses

  • Public sector is primarily funded through taxation (income tax, VAT, and council tax).

  • Some services, like the NHS, provide free services at the point of delivery, while others, such as trains, charge users directly.

  • Revenues generated are reinvested into the service rather than distributed to shareholders or owners.

Structure of Public Sector Businesses

  • Public sector organisations can be either central (run by national government) or local (managed by local councils).

  • Central government departments are overseen by secretaries of state and managed by senior civil servants.

  • Local authorities run services such as waste collection, social services, and town planning, they are overseen by locally elected councillors and managed by council employees.

Accountability and Transparency in Public Sector Businesses

  • Public sector organisations are accountable to the public and the government.

  • Businesses in the public sector are required to publish information about their operations to allow for transparency.

  • They are open to scrutiny from bodies such as the National Audit Office and must answer to Parliament.

Regulation of Public Sector Businesses

  • Public services are governed by legislation which sets out how they must operate.

  • They are also overseen by regulatory bodies to ensure they adhere to these laws and standards.

  • For example, schools are inspected by Ofsted, while healthcare providers are regulated by the Care Quality Commission.

Workforce of Public Sector Enterprises

  • Employees typically have specific rights and protections which may differ from those in the private sector.

  • They often belong to trade unions which lobby for wages, working conditions and pensions.

  • Recruitment in public sector organisations is often governed by rules to ensure fairness and prevent nepotism or discrimination.