The Public Sector
DO NOT CONFUSE THE 'PUBLIC SECTOR'
WITH 'PUBLIC LIMITED COMPANIES'!!!!!
Public Sector organisations are owned by the government.
Public Limited Companies (PLC) are large businesses like Tesco PLC, who are out to make a profit and so they are in the Private Sector.
WITH 'PUBLIC LIMITED COMPANIES'!!!!!
Public Sector organisations are owned by the government.
Public Limited Companies (PLC) are large businesses like Tesco PLC, who are out to make a profit and so they are in the Private Sector.
The Public Sector is paid for by taxes, such as Income Tax, VAT, Council Tax and Corporation Tax (which is tax on a business's profits). The government have no money of their own, so they have to work out how much they need each year and then work out how much tax to charge everybody.
So why do the government need money?
Well, if we didn't pay taxes, the government would not be able to pay for any of the following:
The main aim of the Public Sector then, is to provide a service that is available to everybody. Most of the services are normally free of charge (although not really, because we pay for them by paying tax on practically everything we do - I'm surprised they don't tax me breathing!).
See the image below to see how the government got their money in 2013 and also how they spent it....scary figures!
So why do the government need money?
Well, if we didn't pay taxes, the government would not be able to pay for any of the following:
- NHS
- Schools
- Army
- Police
- Fire Brigade
- Roads
- Libraries
- Parks
- Social Services
- Unemployment Benefit
- Old-age Pensions
The main aim of the Public Sector then, is to provide a service that is available to everybody. Most of the services are normally free of charge (although not really, because we pay for them by paying tax on practically everything we do - I'm surprised they don't tax me breathing!).
See the image below to see how the government got their money in 2013 and also how they spent it....scary figures!
Privatisation & Nationalisation
Sometimes the government might want to raise some extra money by selling one of their organisations. This happened years ago when the government owned British Gas. The government thought that British Gas could be run better if it was sold to shareholders. So that's what they did. It went from being owned by the government in the Public sector, to being owned by shareholders in the Private Sector.
When the government sells one of its businesses to shareholders, it is known as Privatisation. If the opposite happens, and the government buy a business from the Private Sector, this is know as Nationalisation.
When the government sells one of its businesses to shareholders, it is known as Privatisation. If the opposite happens, and the government buy a business from the Private Sector, this is know as Nationalisation.