Think of a railway. ‘British Rail’ was a much disliked public service company that ran the railways at the end of the twentieth century. It was poorly managed, probably underfunded and the sandwiches it provided curled at the edges. It was sold off to private business presumably as a way to solve all those problems. Now the private rail companies are poorly managed, probably underfunded and they don’t provide sandwiches; you have to buy them from the shop at the end of the platform.

What we have in the title above is a binary question. Is it one or the other? But this type of question, I think, most people can spot is over simplistic and denies the existence of complexity. In reality a railway is both a service and a business. It’s a blend, like two types of coffee bean are used to make a drink better than one can achieve on it’s own.

The question is, on a scale of ten, how much is a railway a business and how much a service? Would you agree that for a public company the service element is around eight and for a private company the service is around four. For a public company the business element is around two and for a private around six?

I have used railways as an example but the question can be applied to a variety of bodies that describe themselves as services and businesses.

Take health. At the end of the second world war, it was decided to create a National Health Service in the United Kingdom. It was thought by politicians that it is wrong for the poor to have to pay to see a doctor. They had no money and therefore no medical support. On the above scale the NHS is nine as a service and one as a business.

I live in Spain where there is both a private and public health service. If you work, you pay into the social service system and get a variety of benefits in return such as medical cover. If you don’t then you need to have health insurance or a lot of money. There are two types of hospital and two types of ambulance. If a public ambulance picks you up in the street after a heart attack and you have health insurance, you will be paying for the ambulance out of your own pocket. The two systems do not have a sharing agreement like banks do with cash machines. Ambulances may come from a long way away if you want the right company or service to arrive. Good luck.

I once sat on a committee which discussed over coffee and croissants, ‘future proofing’ a large public organisation, the police. One day the notion was brought up that the police force should be privatised. I remember I strongly objected because I could see it would open the doors to corruption and Mafia type organisations taking over. Not everyone in the room saw my point of view, which was scary.

This dichotomy can be seen in most businesses and public organisations. The cake shop selling buns to busy commuters is helping people by providing a service, whilst selling buns at a price that makes a profit.

But when you hear of local authorities having to cut their spending from 440 million pounds by 70 million pounds, you realise that the United Kingdom is taking it’s austerity policy seriously. The down side to cuts is the answer to the question, what do local authorities do?

I heard an interview on the radio with a man who lived on a rough estate in west London. Gangs ruled and knife crime and shootings were common. He was asked when this all began and he answered, when youth services were cut. When he was a child all the kids were taken out of London to the countryside where they learnt to get along because they were all the same. The result of not preventing knife crime and shootings are social and financial costs for communities and the public services like health and criminal justice. Cuts can be a false economy.

If we turn our services towards businesses, they start to fail. Just as if we turn our businesses into services, they start to fail. A bun cannot be cheap. A sticking plaster must be paid for.

To achieve success in both areas, managers must not lose sight of the aims of their organisations and know what mix of business and service they are. Politicians must know the minimum thresholds below which businesses and services just stop.