New research for economic gurus shows the privatising public services is not always best for a country.
Politicians have argued that letting the private sector run services like buses, trains and utilities improves customer experiences and makes them cheaper.
The object is to shift the cost away from the public purse.
But the International Monetary Fund is taking a wider, holistic view of government finances and has concluded that this is not always true.
The report Managing Public Wealth is quite turgid for non-economists to plough through, but the takeaway is government finances are not just what they owe because this should be balanced against what they own.
Balance sheet tools
Simply put, like the rest of us, a government should have the assets to set against borrowings.
Unsurprisingly, the G7 including Britain come out with a negative balance – borrowings exceed assets.
One reason is governments do away with the income they are earning from public assets when they sell the family jewels.
“Balance sheet strength is not an end but rather a tool to support the objectives of public policy. Because balance sheet estimates can involve various data quality issues, with challenges in measuring and valuing many assets and liabilities, improving public sector accounting standards is important,” says the report.
“Over and above these insights, balance sheet analysis enriches the policy debate by focusing on the full extent of public wealth. Public assets are a significant resource, and how governments use and report on them matters, not just for financial reasons, but also in terms of improving service delivery and preventing the misuse of resources that often results from a lack of transparency.”
Public sector balance sheets (% of GDP 2016)