MSP Logo

The Reversal of Privatization and an urban coming of age

by David A. McDonald 

A gentle revolution is underway in Barcelona, Spain. Until recently, prevailing wisdom has been that efficient, quality and cheap services are best provided by handing everything over to the private sector. These days are gone.

From energy supply to kindergartens to funeral services, the municipality is providing more and more of the basic needs of its citizens at affordable and transparent prices. Following a city council motion in December 2016, Barcelona is now aiming to municipalize its water service. Since the progressive coalition Barcelona en Comú gained power in the Catalan capital, the city has introduced a wide-ranging policy of remunicipalizing outsourced public services and creating new ones.

Barcelona is not unique in this respect. Thousands of public officials, workers, unions and social movements are working to create effective public services that address the basic needs of people and respond to social, environmental and climate challenges. They do this most often at the local level. Reclaiming Public Services, a new report, found that there have been at least 835 examples of (re)municipalization of public services worldwide in recent years, involving more than 1,600 cities in 45 countries.

Cities and towns around the world are following different models of public ownership, with citizens and workers involved in a variety of ways. People are moving away from private options and developing new, public ways to deliver services. Far from being an anomaly, bringing services like transport, health care and energy back under public control is a worldwide trend -- and one that makes sense.

Privatization has been given ample chance to succeed and has come up short. The persistent myth that public services are by nature more expensive, inefficient and outdated, and that we, as citizens and users, should resign ourselves to paying ever higher tariffs for ever lower standards has not yet abated. Nor has the idea that service workers have no choice but to accept ever more degraded conditions. Because everything is seen to have a price, many politicians have lost sight of the common good, while "taxpayers" are sometimes only interested in their own individual pursuits.

The remunicipalization movement tells a very different story. While it is still in its infancy in Canada, the remunicipalization movement in Europe can be seen as a response to austerity policies and is being carried forward by an increasingly diverse array of politicians. Successful (re)municipalization experiences inspire and empower other local authorities to follow suit. We see it in the way municipalities and citizens have joined forces in Germany to push for energy democracy. In France and Catalonia, networks of public water operators pool resources and expertise, working together to deal with the challenges of remunicipalization.

There are many examples from outside Europe too. In India, the city of Delhi began the process of delivering affordable primary public health care in 2015 by setting up 1,000 Mohalla (community) clinics in 2015. Since then more than 2.6 million of its poorest residents have received free quality services.

These locally rooted changes are providing improved services as well as savings for local authorities and the public. The Nottingham City Council in the U.K., for example, decided to set up a new energy supply company in 2015 after finding that many low-income families in the city were struggling to pay their gas and electricity bills. Robin Hood Energy offers a cheaper service than private providers because it neither extracts profits nor confuses customers with complicated pricing schemes. The company, which offers the lowest energy prices in the country, has the motto: "No private shareholders. No director bonuses. Just clear transparent pricing." They have also formed partnerships with other major cities. In 2016, the city of Leeds set up the White Rose Energy municipal company to promote simple no-profit tariffs throughout the Yorkshire and Humberside regions. In 2017, the cities of Bradford and Doncaster agreed to join the White Rose/Robin Hood partnership. Meanwhile, campaigners with Switched on London are pushing their city to set up a not-for-profit energy company with genuine citizen participation. The motivations in these diverse cities are similar: young municipal companies can simultaneously beat energy poverty and play a key role in achieving a just and renewable energy transition.

Remunicipalization is rarely just about the change of ownership structure from private to public. It is fundamentally about creating better public services that work for all. This includes restoring a public ethos, a culture of universal access at affordable prices, and ensuring transparency and accountability towards elected officials and citizens as opposed to focusing only on the most lucrative parts of the service.

Remunicipalized public services often involve new forms of participation for workers and citizens. Remunicipalisation is often a first step towards creating the public services of the future: sustainable and grounded in the local economy. Inspiration can be found in the European towns and villages aiming for "zero waste" with their remunicipalized waste service, or providing 100 per cent local, organic food in their remunicipalized school restaurants.

Public services are not good just because they are public. Public services must also continuously improve and renew their commitments to society. The push for remunicipalization in Catalonia also relies on a movement of citizen platforms that not only want to achieve a return to public management as an end in itself, but see it as a first step towards the democratic management of public services based on continued civil participation.

Evidence is building that people are able to reclaim public services and usher in a new generation of public ownership. The momentum is building, as diverse movements and actors join forces to bring positive change in communities around the world.

David McDonald is a Professor of Global Development Studies at Queen's University, and Director of the Municipal Services Project.

Photo: "Marea Blanca" protest against health-care privatization in Spain. Credit: Adolfo Lujan/flickr