Last edited 16 Dec 2020

Public sector

The ‘public sector’ is the section of the economy that consists of public services and public enterprises that are owned and operated by the government. It is distinguished from the ‘private sector’ which is run by private individuals and businesses, and from the ‘voluntary sector’ which is run by charities and non-profit organisations.

The public sector, in addition to including government ownership and/or control, also includes the exercise of public authority or the implementation of public policy.

In the UK, approximately a quarter of construction output is public sector and three-quarters is private sector.

The term 'public project' is an ambiguous one, but in very broad terms, it refers to a project that is financed (or part-financed) by the public sector, and is typically owned and may be operated by the government. This can include major infrastructure works such as roads, bridges, dams, railways, tunnels, and so on, or public facilities such as hospitals, schools, prisons, libraries, leisure centres, and so on.

The European Union Procurement Directives establish public procurement rules throughout the European Union and apply to any public purchases above the defined thresholds. The purpose of the directives is to open up public procurement within the European Union and to ensure the free movement of supplies, services and works. The directives are enacted in the UK by The Public Contracts Regulations.

Public Private Partnerships (PPPs) are a very broad range of partnership where the public and private sectors collaborate for some mutual benefit. PPPs were first developed in the UK in the 1990s in the belief that private sector companies might be more efficient at providing certain services than public authorities and so could deliver better value for money for taxpayers. However, in the 2018 Autumn Budget, Chancellor Philip Hammond confirmed that the government would be scrapping both PFI and PF2 contracts, with no more being signed. Addressing the House of Commons, Hammond said: "I'm committed to PPP where it delivers value to the taxpayer and shifts risk to the private sector. There is compelling evidence that PFI does neither." For more information see: Public Private Partnerships.

In the UK, a public building is narrowly-defined as a building that is 'occupied by a public authority and frequently visited by the public”. For more information see: Public building.