The European Services Strategy Unit (previously the Centre for Public Services and Services to Community Action and Trade Unions) have consistently made the case for alternative policies in providing strategic advice to community organisations, trade unions and public bodies. It is reflected in the reports and strategies advocated with these organisations. We have consistently believed that financialisation, marketisation and privatisation must be challenged by a combination of critical analysis and alternative policies and strategies. This approach led to highly successful campaigns in Newcastle upon Tyne, Manchester, London, Birmingham, Oxford, Bury, Salford, Manchester, Bedfordshire, South Tyneside, Northamptonshire, Kent and other locations, and in the impact of national research.
Public Alternative to the Privatisation of Life
The new book Public Alternative to the Privatisation of Life sets out the scale, cost and impact of different forms of privatisation and encompasses public goods and services including the welfare state, the public realm or built environment (and right of assembly), public domain or creative commons, public sphere (collective debate and elimination of economic and social inequality) in which nature and biodiversity, climate and the environment are an integral part.
A political economy framework assesses the impact of privatisation that combines the concepts of accumulation by dispossession and the primary and secondary circuit of capital. It demonstrates how privatisation is interwoven with, and is co-dependent upon, financialisation, marketisation and individualisation.
Four decades of neoliberal ideology and a decade of austerity have had a major influence in extending privatisation beyond the sale of state-owned corporations and outsourcing of support services to encompass core services, multi-service public private partnership contracts and ‘choice’ mechanisms for patients and pupils in industrialised countries and the global south.
The UK developed and exported privatisation on an industrial scale since 1981 – 50 state-owned industries and corporations were sold with net proceeds of £74.9bn (£165.5bn at 2018 prices). Debt write-offs, council house sale discounts and public subsidies to privatized services totaled £174.4bn (£324.4bn current prices).
Decline in quality of services and jobs
Neoliberal public management focuses on outcomes but has
marginalised inputs, processes and outputs, which are critical determinants of
service quality, to try to conceal the full negative consequences of
privatization. For example, the downward spiral in the quality of jobs, terms
and conditions and pension rights is considered a contractor responsibility and
of limited, if any, concern for public clients awarding contracts.
The book details the impact of privatisation in education, health and social care, transport, criminal justice and other services the UK and other countries over three decades, which evidences the consistency of failure and impact of market forces on services, jobs and increased inequality. Offshoring and tax avoidance is rife, particularly as private equity fund ownership of public assets and the growth of secondary market transactions of PPP equity to infrastructure funds accelerates.
The final part of the book analyses why it is vital to challenge new forms of privatisation
and public-private partnerships promoted by global institutions and transnational
corporations which will continue to embed new ways of extracting profit and
control. The potential impact of technological change and automation and the
continuing urbanisation and growth of megacities must also be taken into
I argue for the centrality of public ownership with scope for community and cooperative provision and why they must not mirror the policies and practices of social enterprises, housing associations and many other third sector organisations in capitalist economies.
The development of alternative policies and plans are important because public ownership and re-municipalisation alone are inadequate. The systematic decommodification of services is necessary to strip away the neoliberal commissioning and contract culture to be replaced by new accountable governance, transparency and service user and public employee participation and radical public management. Green New Deals should be part of wider national, regional and local economic, social and environmental plans to ensure a holistic approach that integrates sector strategic plans for public housing, employment, education, health and social care with the preservation of nature and biodiversity and climate action.
A radical public management is urgently needed to break the hold of neoliberal ideology and managerialism. Ownership alone is no guarantee that a service will be provided effectively to meet public needs and is more likely to be re-privatised. Therefore, all sustainable proposals for public ownership must be accompanied by a detailed plan for how services will be provided, managed and monitored.
Increased sustainable public revenue can be obtained through progressive taxation with increased wealth and corporate taxes whilst eliminating the cost of corporate welfare subsidies and tax breaks. Corporate interests must be challenged by building new alliances between trade unions, community and civil society organisations taking joint action to advance a radical agenda.
Public Alternative to the Privatisation of Life sets out a radical agenda for decommodification, public ownership and provision, re-municipalisation, reconstructing democracy, radical public management, public investment and strategic action. It explains the drivers of financialisation, marketisation, individualisation and privatisation and sets out a political economy framework of privatisation. It details the corporate extraction of profits, impact on the quality of services, the erosion of democratic accountability and transparency, increased inequalities and the reduced capability of public authorities.
Much of the evidence is from the UK and Europe, US, Canada, Australia, New Zealand, together with Asia, Africa and Latin America which have experienced significant levels and forms of privatisation, and where financial capital and transnational companies ruthlessly acquire privatised assets
1. Privatisation, automation and mega-cities
2. The political economy of privatisation
3. Drivers of new opportunities for capital accumulation
4. Financialising economies and public services
5. Marketisation of public services, climate and nature
6. Individualising marketisation and privatisation
7. Privatisation by sale, stealth and mutation
8. The business of extracting profits from public assets
9. Public infrastructure and PPPs
10. Poor quality of privatised services
11. Privatisation increases inequalities
12. Impact on jobs, pay, pensions and conditions
13. High public cost of privatisation
14. Democratisation for accountability and participation
15. Decommodification, public ownership and provision
16. Radical public management
17. Financing public investment and services
18. Strategic action
A. Public Service innovation & improvement Plan
B. Public - Private Structural Differences
C. Public - Private Structural Differences
580 pages Buy directly from Spokesman Books - paperback and eBook/PDF format
Equitable Recovery Strategies: Why public ownership and democratic control must be at the heart of Green and Integrated Public Healthcare Deals
New strategies for a post-pandemic economy - Markets and deals - Green Deals - Integrated Public Healthcare System Deals - 'Just transition' policies, jobs and quality of employment - Financing new economic policies, Green and Healthcare System deals - A new surge of privatisation - Strategic issues
• There is a need for new economic strategies combining a Green Deal and an Integrated Public Healthcare System Deal.
• Globally, renewable energy projects are primarily owned and operated by private companies and private equity funds. Public finance is mainly used to attract private investment in renewable energy projects.
• A global secondary market operates with merger and acquisition deals that include renewable energy
manufacturers, project developers, project owners and renewable energy funds which seek to increase market share.
The renewable energy sector could ultimately mirror the private ownership and control of the fossil fuel sector but it will not be under democratic control and its equality, employment and social policies are likely to be business as usual.
• Green Deals must revert the commercialisation of nature and biodiversity, which should be treated as public goods with public protection and strong regulatory frameworks.
• Retrofitting housing is very important because heating and hot water for UK homes account for 25% of total energy use and 15.3% of greenhouse gas emissions in 2018. However, it is vital to draw on the lessons of earlier failed schemes, to recognise the complexity of retrofitting 27m public and private homes and the estimated £911bn (€1,007bn) cost.
• The Covid-19 pandemic has highlighted the urgent need to integrate public health, primary care, medical care and social care to create an Integrated Public Healthcare System.
• Equality and political, economic, social and environmental justice must be the core objective of public policy planning and management.
• Government and public authorities should develop a Conversion Strategy and should consist of a
national organisation or agency to develop alternative use proposals; identify international, national and regional demand for green products and services; provide technical support or grants to trade union and community organisations; develop national training and reskilling programmes for workers; and economic development programmes for areas affected by fossil fuel closures.
• A 16-part Code of Practice for Quality Employment is for a ‘just transition’ and must apply to all jobs in the economy.
• The economic consequences of the Covid-19 pandemic are still unfolding with a steep fall in GDP,
soaring rate of unemployment, rising levels of public and private debt and increasing budget deficits.
• Measures to increase revenue by £81.9bn (€90.5bn) per annum or £409.5bn (€452.5bn) over a five-year period would make a significant contribution towards addressing the cost of the Covid-19 pandemic in the UK and longer-term financing of new economic policies, Green and Public Healthcare Deals.
• Recovery strategies must establish certain parameters to include: no austerity measures; no tax increases for employees up to and including the average industrial wage; no privatisation and no reinvention of public private partnerships.
• The decarbonisation target will hopefully beachieved, but unless the decommodification of public services and adoption of radical public management is undertaken at the same time a new surge of privatisation would be preceded by further financialisation and marketisation with profound consequences for services and jobs.
• Key strategic issues are identified together with examples of organising, building alliances and alternative plans.
The Financialisation, Marketisation and Privatisation of Renewable Energy: Strategies for public ownership
626 transactions in global renewable energy secondary market in 20 months in 2019-2020 cost US$289bn
- 34% of transactions involved private equity funds;
- The public sector accounted for only 4.4% of transactions;
- 140 transactions involved a parent company or subsidiaries registered in tax havens;
- Europe and North America dominated the global changes in ownership of wind, solar, hydro and battery projects;
- 38 assets were acquired into public ownership (15,270MW), 14 assets were privatised (14,504MW) and 14 assets were transferred between public authorities (5,175MW) –there was a net gain in the number assets transferred to the public sector but only a small gain in the level of MW.
- US$8.4bn of the total cost were fees to consultants, lawyers and asset management companies to negotiate transactions
- Renewable energy electricity generation is largely in the control of finance capital and market forces so, that by 2050, generation, distribution and supply could be substantially owned and controlled by the private sector.
The case against a secondary market in renewable energy
- Increases the role of market forces in renewable energy and consolidates market interests.
- Creates new opportunities for profiteering from renewable energy generation. Revenue from the sale of assets accrues to the parent company that owns the equity and does not directly benefit the project, local economy or community.
- Increases the use of tax havens, as companies and investment funds seek to minimise or avoid tax liabilities in order to maximise profits.
- Ultimately increases the cost of electricity than it would otherwise be without the secondary market and those extracting transaction fees.
- There is a fundamental lack of democratic accountability because the secondary market operates independently of governments and international agencies (except when regulatory approval is required). The fact that some state-owned companies and public authorities participate in the secondary market does not justify its existence.
- Private equity and investment and funds, consultants and lawyers have a financial interest in sustaining the secondary market.
- The fact that the secondary market generates additional profits and fees is likely to invalidate the original impact assessments undertaken at the start of the project.
- The secondary market changes the ownership of assets and may change the priority of certain projects, but it does not increase investment in existing assets except when older assets are acquired for upgrading.
- Changing corporate ownership via private negotiation may lead to the weakening of the original environmental and community commitments by the new owners.
- The secondary market will mushroom as the rate of renewable energy projects increases to meet the demands set by climate targets. This will accelerate financialisation, marketisation and privatisation as more and more projects are commodified and traded, thus public ownership and democratic accountability of power generation will be more difficult to achieve.
Strategies to increase publicly owned and operated renewable energy generation
- Prioritise publicly financed renewable energy generation in industrialised countries and with a wider generation, grid and supply in developing countries.
- Increase direct public investment in new renewable energy projects and retain them in public ownership and operation.
- Agree selective public acquisition of renewable energy assets by negotiation or via nationalisation. All future public financial support must be conditional on binding agreements that give the public sector the first option to acquire the project in any future sale of the project.
- Increase public sector in-house capabilities to plan, develop and operate renewable energy projects. A decommodification process (redesign of services, jobs, regulations, democratic accountability, participation and disclosure) in government and public authorities should be combined with the adoption of radical public management committed to public ownership and provision. This would terminate the financialisation, marketisation, individualisation and privatisation processes and significantly improve the quality of public services and terms and conditions and training of public employees (Whitfield, 2020a).
- Ensure regeneration and development plans, strategies and retrofitting housing programmes include new publicly owned and operated renewable energy projects.
- Classify renewable energy assets as public goods and align with public service principles and values.
- Maximise local and regional economic development and employment opportunities created by the construction, production and operation of renewable energy projects and make quantified proposals a condition of regulatory approval and any direct or indirect public financial support.
- Ensure that innovative and technological developments are harnessed to meet collective social, economic, environmental and power generation needs instead of driving market forces and profit maximisation.
- Demand more stringent policies that ban the use of tax havens for the finance and ownership of renewable energy projects.
- It is imperative that Green Deals contain detailed proposals to address the operation and impact of the secondary market in renewable energy projects within nation states and internationally.
The scope and powers of regulatory frameworks must be widened to increase democratic accountability, obtain greater local/regional economic and employment benefits from renewable energy investments.
Further Investigation of Scotland’s renewable energy projects
Revealed: Scottish wind farms owned in tax havens, Rob Edwards, The Ferret – an independent non-profit media cooperative in Scotland set up to investigate stories in the public interest – has drawn on the evidence in the ESSU report and reported the views of the Tax Justice Network, Friends of the Earth, Community Energy Scotland, Scottish Labour, Scottish Greens and the Scottish Government who are all critical of tax evasion in Scotland’s renewable energy projects.
The same article under the title of Ventient Energy: Scottish wind firm under fire over alleged tax avoidance was published in the Sunday National, 22 November 2020.
Presentation on PPPs at Scottish Parliament
Presentation by Dexter Whitfield, European Services Strategy Unit, to meeting ‘Rethinking Private Financing of Scottish Public Projects’ at the Scottish Parliament on 29 January 2020, organised by Jubilee Scotland and chaired by Neil Findlay, MSP.
I strongly recommend that the Scottish Parliament, local authorities and public bodies immediately adopt six strategies for public infrastructure projects in Scotland:
1 - Increase direct public investment in public infrastructure and stop all planned Mutual Investment Model projects.
2 - Scotland should adopt a new public design/finance and operate model.
3 - Local authorities and public bodies should intensify the monitoring of PPPs to identify defaults and poor performance.
4 - Establish a comprehensive and rigorous Economic, Social, Equality and Environmental Cost Benefit Analysis methodology.
5 - The Scottish Parliament and local authorities should oppose the sale of equity in PPPs.
6 - Challenge the trend of Scottish pension fund investment in PPPs.
Full details in pdf document and Jubilee Scotland website - https://www.jubileescotland.org.uk/
Nationalising Special Purpose Vehicles to end PFI: A discussion of the costs and benefits
The paper by Dr Helen Mercer and Professor Dexter Whitfield is available via the Public Services International Research Unit, University of Greenwich.
The article’s principal purpose is to provide an initial set of
costings relating to the proposal to end PFIs in the UK through
nationalising the Special Purpose Vehicles. The article uses book value
to estimate that the cost of compensating the shareholders of the SPVs
on HM Treasury database would be between £2.3bn and £2.5bn. It further
analyse the potential savings to public authorities. The article
proposes that service contracts are renegotiated so that the public
authorities contract directly with the providers, not via the SPV. This
secures significant annual savings from the elimination of operating
profits, of £1.4bn, indicating that nationalisation will pay for itself
within two years. Further the article proposes to honour all outstanding
liabilities but to secure substantial refinancing through a new body in
which ownership of the SPVs will be vested.
Finally the article suggests that as service contracts are ended,
either through break clauses or other reasons, the public authorities
must bring provision ‘in-house’, ending outsourcing and also providing
further savings from more rational and integrated provision. The
approach has been developed on the basis of significant research into
how PFIs operate and consideration of the range of alternative solutions
to the PFI problem that have been put forward so far. These issues are
also explained and developed in the article.
Third edition, May 2019, including appendix 2 with comments on CHPI’s revised paper and Appendix 3 with comments on CHPI paper.
Private Finance Initiative: nationalise Special Purpose Vehicles
A radical proposal by the People vs Barts PFI campaign which has been researching and discussing ‘what to do about PFI’ for several years. The paper explains what SPVs are, how SPVs spin off private profit from public assets and proposes a mechanism for nationalising the SPVs. Proposals to strengthen the public design, project management and ‘intelligent client’ functions be strengthened in non-PFI public sector construction projects and problems with the proposal to centralise the debt are detailed in two appendices. A proposal to centralise and reduce PFI obligations contained in Part 4 of the NHS Reinstatement Bill are also examined.
A New Vision for Local Government
This vision was developed in 2002 is response to radical proposals by Milton Keynes Council and Northamptonshire County Council for a joint strategic partnership for a large range of corporate and support services. The report was in two parts. The first 'Our Vision' set out public services and principles, increasing the capacity of local government, high quality services with continuous improvement, enhancing equalities and social justice and community well-being.
The second part was a critique of partnership by privatisation which exposed the strategic partnership agenda and the virtual council, the private track record and impact on the local and regional economy. The Centre for Public Services worked with two UNISON branches to produce the alternative plan, provided the branches with an assessment of the two bids from Amey and Hyder, made a presentation to Milton Keynes Council and met with elected members in Northamptonshire. The partnership project was eventually abandoned, although Milton Keynes proceeded to establish a PPP Strategic Partnership with HBS with a smaller range of services.
Reconstructing Public Services
Chapter 6 from In Place of Austerity: Restructuring the economy, state and public services, Dexter Whitfield, Spokesman Books, 2014
The Case for Public Services
In-house provision of public services is both advantageous and essential and makes a substantial contribution to community wellbeing, liveability, sustainable development and social justice. The case is made under the following headings: improving community well-being, democratic accountability, equalities and social justice sustainable development, protecting the public interest, financial advantages, corporate policies, better quality employment and improved capacity.
Green Bans – inspired trade union organising working with community organisations
This is an inspired example of highly successful trade union organising, militant opposition and working with community organisations equally opposed to exploitative urban development in Sydney and other Australian cities in the early 1970s and equally valid today.
Australian building worker Jack Mundey played a leading part in starting the ‘Green Bans’ in the 1970s as leader of the former New South Wales Builders Labourers Federation. This involved action by building workers on key sites and developments considered by local resident’s groups and workers to be socially, financially and environmentally wrong.
Community Action Magazine interviewed him when he was in London in early 1976 and published the following in Community Action Magazine No. 24, February/March 1976. Jack Mundy died aged 90 in May 2020.