Private and Public Sector Organisations

Not every business is owned and operated privately. Many organisations that provide goods and services are part of what is known as the public sector.

What is the difference between private sector and public sector organisations?

The key differences can be summarised as follows:

Private sector organisations

In the private sector, businesses are operated and owned by private individuals and companies.

Private sector businesses are generally run “for profit” – to earn returns for the business owners (e.g. shareholders).

Public sector organisations

In the public sector, businesses and other organisations are owned and run on behalf of the public, either by the Government itself, or by organisations who are funded by and report to Government.

Public sector business are not generally run ”for profit”, but exist to provide goods and services to the public using public funds.

A relatively small number of companies are owned or controlled by the Government and so are part of the public sector (e.g. RBS (nationalised), Network Rail)

A much larger number of organisations provide goods and services which are owned and operated by public bodies. These are funded by central & local government, but may still levy charges for some services (e.g. the NHS)