LGC’s privatisation cited as a model of success
09 Dec 2011
LGC highlighted in new report on ‘Getting better value from public sector research establishments’
“Some of the privatised organisations, such as LGC…have grown strongly and profitably since privatisation” states a new report from CentreForum, the independent, liberal think-tank.
Entitled ‘Getting better value from public sector research establishments’, the report examines the experience of public sector research establishments where private sector involvement was introduced into their ownership and/or management, and compares that with the experience of research establishments which remained in the public sector. The report considers whether there is evidence that effectiveness and efficiency are improved by greater private sector involvement.
The report highlights favourably the private equity backed model used by LGC and emphasises how “LGC has grown very strongly and profitably by a process of spotting technology areas with potentially broad commercial value, investing in targeted R&D in these areas, and then leveraged the capital of its shareholders to make small, strategic acquisitions to bolster capability.”
Whilst it is evident from the report that privatised companies succeed, the report also discusses the need for some organisations to remain in government ownership. However, it also accentuates how “LGC’s very successful operation of the statutory Government Chemist function demonstrates that with the appropriate contractual mechanisms even statutory/regulatory functions may be discharged effectively and efficiently by privatised bodies.”