When the provision of a publicly funded training program is privatized, the following are some of the negative and positive impacts of these actions
Advantages
- Improved efficiency - the private investors will cut costs to ensure the profits retained are high.
- Minimal political personnel interference- politicians make poor managers as they try to please people. This would involve the admission of many people into the training program causing efficiency and overcrowding of facilities.
- Increased competition- privatization is coupled with deregulation that encourages competitors in the market, and this improves the quality of the training delivered.
- Revenue gain by the government- privatization leads to an increase in government revenue by selling off the facilities used in the provision of the training to a private investor.
Disadvantages
- Might lead to a natural monopoly- this move might hinder other training providers in the economy, leading to a natural monopoly that might exploit consumers.
- Overlooking of public interest- the private investor is concerned with the profits made overlooking the benefits derived from offering the training.
- Loss of dividends- the provision of training might turn out to be affordable and therefore excluding the government from gains in terms of dividends.
- Failed sustainability- the private investor may be concerned with making profits and fail to do conduct research and improve structures to ensure the sustainability of the training program into the future.