It doesn’t take an expert to work out that privatisation has failed. Anyone with even a passing eye on the news this year will have seen it laid out plain and clear.
First, we had the annual rail fare hike, with already stretched passengers being hit by a 3.1% fare increase. Then, private probation company Working Links collapsed, shortly after the chief inspector of probation identified that it had a severe lack of staffing and was more concerned with meeting financial targets than helping offenders. And by March, Interserve – an outsourcing giant of similar scale and scope to the now defunct contractor Carillion – went into administration. Interserve’s financial doom was long known, but it was still given £660m public contracts in the run up to its collapse.
These are just the latest in a long list of failures going back nearly forty years. Electricity prices are 10-20% higher than they would have been if energy wasn’t privatised in the 1980s. The average price of a train journey has risen by 23.5% in real terms since privatisation in 1994. Water bills are also up an eye-watering 40% since water was sold off 30 years ago.
Privatisation has failed us in the past, is failing us in the present and will continue to fail us in the future – unless we do something about it.
Privatisation is failing to tackle 21st century challenges.
The 21st century has presented a set of challenges that private companies are ill suited to respond to. Private companies running our services have proven incapable and unwilling to assist in the transition to a zero-carbon economy. They’ve also resolutely failed to deliver on a central purpose of public services – to create happier, healthier, more equitable communities. Indeed, the acceleration ever closer to climate breakdown alongside spiralling inequality has happened under the watch of the rampant ideology of privatisation and profit.
As our new report, When We Own It: A Model for Public Ownership in the 21st century, sets out, public services will be absolutely crucial in addressing these challenges head on. The environmental crises currently facing us will require a radical overhaul of our society and our economy. We need a rapid transition away from fossil fuels and into widespread renewable energy production. We need to take cars off the road and short haul planes out of the sky, replacing them with integrated and effective public transport. We need to halt the mass water shortages currently projected to hit the UK in 25 years.
We can’t do that under privatisation. Just 10% of our energy currently comes from renewables, as private companies have sought to maintain their bottom lines over investing in our futures. Our public transport is in perpetual crisis with delays, cancellations and packed trains and buses plaguing the network, while fares go up and up, and rural transport is slashed to the bone – forcing people into car dependency. And the water companies are shifting billions of pounds in dividends to shareholders while allowing 3bn litres of water to gush down the drain every single day. Meanwhile, one in every ten households lives under fuel poverty, meaning 2.5m families are plunged into precarity just by trying to keep their home warm enough to live in.
Public ownership is the answer.
The scale of the challenges facing us requires a different approach. Publicly owned services operate in a fundamentally different way to their private counterparts. Their purpose for existing is to provide a service, rather than to produce a profit for shareholders or parent companies. This means that they can be tailored explicitly around the needs of the public interest – whether that be economic, environmental or social. It also means we can decide how much money is invested, and where.
Bringing services into public ownership – from rail to energy and from water to the Royal Mail – therefore opens the door to properly tackle the challenges of the 21st century. It’ll allow us to pour investment into public transport, making the bus, train or tram the cheapest, easiest and greenest option. It’ll allow us to reshape our energy system built on renewable energy and saving the public money on bills in the process. And it’ll allow us to ensure everyone has proper access to water, with still and sparkling water fountains in every town and city, as well as lower bills and up to date infrastructure to tackle leaks.
But 21st century public ownership doesn’t just mean developing an emergency response to the major challenges of the day. It means incorporating radical developments at the cutting edge of technology, democracy and participation to ensure that the public are put front and centre of our services. Whether it be utilising tech to maximise democratic input into services or building upon innovative methods of participation like participatory budgeting, 21st century developments will allow us to avoid the pitfalls of top-down state orientated models of public ownership and ensure we can put the public at the heart of public ownership.
The story of privatisation is a story of forty years of failure. It’s time we opened up a new chapter to face up to the biggest challenges of the day. That chapter will be democratic public ownership for the 21st century.