The term 'public sector' commonly refers to organisations which are funded directly or indirectly by government and includes: local authorities; the NHS; schools, colleges and universities; police and fire services; and the Civil Service. These organisations vary in their size, character and function but they all provide services either to the whole population (health) or to sections of the population (education). They are not run to generate a profit for owners or shareholders, though some areas of the public sector are expected to generate income to offset the cost of providing services - for example leisure centres which charge admission.

Employees in the public sector are usually paid on pay scales, as opposed to individually negotiated salaries, and the public sector has a higher rate of trade union membership than the private sector. The public sector is a fast changing environment, where factors such as funding and organisation of work are at least partly determined by political decisions. Managers and staff working in these organisations need to be proactive and resilient.