One of the most striking features of the period since 1979 in the UK has been the dismantling of the public sector. From small beginnings at the beginning of the 1980s privatisation in its various forms has come to affect every area of state activity. Most prominent has been the sale of public corporations and utilities, such as British Telecom and British Gas. These initiatives had reduced employment in the state sector by well over one million by the end of the 1980s (see Beaumont, 1992:36– 37). Besides asset sales the other main form of privatisation (in terms of a direct transfer of activities from public to private sector) has been competitive tendering and private contracting in local government, the National Health Service, and parts of central government. Recently, the Government has suggested that ‘market testing’ of this sort will be extended to all public sector activities (see Citizens' Charter). In addition to these direct forms of privatisation residual parts of the public sector have been subject to what might be called ‘quasi‐privatisation’ in the form of agency status for much of central government and self‐governing trust status for NHS hospitals and services, characterised by contractual relationships in place of direct control via management hierarchies, and the weakening of democratic accountability via elected politicians (see Stewart and Walsh, 1992). Some observers have suggested that a fundamental transformation of the state is occurring with the state retreating from direct provision of services and activities (Lewis, 1993).
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