UK: The private face of privatisation.

UK: The private face of privatisation. - Privatisation is widely accepted to have been a powerful political weapon for the Conservatives over the past decade. "Popular capitalism" gave a practical demonstration of Thatcherite ideology, while the proceeds

Last Updated: 31 Aug 2010

Privatisation is widely accepted to have been a powerful political weapon for the Conservatives over the past decade. "Popular capitalism" gave a practical demonstration of Thatcherite ideology, while the proceeds helped first Sir Geoffrey Howe and then Nigel Lawson to fund the tax cuts that proved so popular in the 1983 and 1987 general elections.

However, the latest research on the effects of privatisation challenges the conventional Conservative wisdom. In a survey of 442 employees of all ranks in two privatised utilities, researchers from the universities of Bristol and Leicester found that the transfer of ownership was very unpopular. Less than half of those surveyed believed that private firms were more efficient than public organisations and only a fifth thought them more likely to protect the consumer's interests. Only 12% thought that private firms were more likely to be concerned with health and safety and, alarmingly for the Government, as "green" issues increase in importance on the political agenda, a mere 10% thought that private firms would be more likely to protect the environment.

Not surprisingly, on almost all issues manual and clerical staff were less enthusiastic than their managers about the beneficial effects of privatisation. But when asked about improvements in service, a substantial 31% of managers disagreed with the statement "Privatisation improves customer service". This figure was worryingly close to the 44% who felt that it did. The sceptical view of privatisation is more marked at clerical and manual levels, where more people disagreed than agreed (41% compared with 25% and 29% to 43% respectively).

In fact cynicism among employees about the beneficial effects of privatisation extends even to their own companies. Less than a third (32%) felt that their company now provided a better service, while 60% either disagreed or believed that there had been no change. Few said that they could detect more of the atmosphere of market forces - only 35% felt that privatisation had made the company more "vigorous and efficient", for example, while 56% disagreed or felt that there had been no change.

Many employees were also openly hostile to their management. When asked if they agreed or disagreed with the statement that their firm was "run by people who don't understand industry", 33% agreed, 32% disagreed and 21% saw no change.

Share ownership seems to have made little impact on work practices. Although 80% of those surveyed owned shares in their company, 65% felt that owning a stake in the firm made no difference to how careful employees were with equipment and time, while 70% said that it did not make people work any harder. More than three quarters of respondents rejected the idea that employee share ownership allows workers to influence the way in which the company is run. Only 10% felt that it broke down the "us and them" divide between managers and workforce.

Almost three quarters of the workforce were members of either a trade union or professional association, and this undoubtedly influenced responses to questions on the influence of unions. While there was broad agreement that unions in the 1970s had too much power, this changed when transferred to the present day. Almost half (46%) felt that unions had too little power today, and this figure increased to 60% when union members were asked about their own union and company.

The survey is, of course, necessarily subjective. Employees are bound to have an unrepresentative impression of the way in which their company is perceived by the public at large. But as the Government contemplates further sales of national assets, it would do well to question whether past sales have genuinely improved working practices and customer service.

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