The public sector of the economy offers many goods and services to the consumer, some of which are financed entirely by money the government obtains from taxes or by borrowing and which are offered to the consumer free of direct charge at the point of use. Other goods and services are offered in return for payment. Usually the state owns the capital and land required for production, employing the necessary labour. Sometimes the state rents land and borrows money. In general these resources are used to produce goods and services that it is believed the private sector cannot or will not produce efficiently. The state can be involved in business in a number of ways:
· by owning shares in a public or private company. In this case the business will be funded and operated according to normal commercial criteria.
· by providing services such as health, pricing, defence, social security and advice to trade and industry. The finance for these services comes from taxation, the community charge, the business rate and government borrowing.
· by establishing, by Act of Parliament, a public corporation.