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Public Works is UNISON Scotland's campaign for jobs, services, fair taxation and the Living Wage. This blog will provide news and analysis on the delivery of public services in Scotland. We welcome comments and if you would like to contribute to this blog, please contact Kay Sillars k.sillars@unison.co.uk - For other information on what's happening in UNISON Scotland please visit our website.

Thursday, 10 July 2014

Privatisation demolished

"Privatisation isn't working. We were promised a shareholding democracy, competition, falling costs and better services. A generation on, most people's experience has been the opposite. From energy to water, rail to public services, the reality has been private monopolies, perverse subsidies, exorbitant prices, woeful under-investment, profiteering and corporate capture."

This is the introduction to a an article by Seumas Milne in the Guardian. Arguably the finest destruction of the case for privatisation for some time and well worth a read.

He argues that "Private cartels run rings round the regulators. Consumers and politicians are bamboozled by commercial secrecy and contractual complexity. Workforces have their pay and conditions slashed. Control of essential services has not only passed to corporate giants based overseas, but those companies are themselves often state-owned – they're just owned by another state."

He gives examples of how time and time again privatised services are shown to be more expensive and inefficient than their publicly owned counterparts. Railways are a very recent example and he points to East Coast and Scottish Water as good examples of public service delivery in a largely privatised service.

He is scathing about Ed Ball's halfway house, where franchises continue, but the public sector is allowed to bid to run them as well as the privateers. He says, "That sounds like an expensive dog's breakfast. Rail renationalisation has the advantage of being not just popular but entirely free – as each franchise can be brought back under public control as it expires. To resist it in those circumstances can only be about the power of corporate lobbies or market ideology."

The alternative of tougher regulation is dismissed as "trying to do by remote control what's far better done directly and won't fix the problem on its own. Experience has shown that you can't control what you don't own". He references Glasgow University's Andrew Cumber's excellent work on this point.

He argues the case for new forms of public ownership in the banking sector and utilities – energy, water, transport and communications infrastructure. It's a policy that has support from the majority of the public and reflects experience across the world where privatised services are being brought back into public ownership.

He concludes, "in Britain the power of City and corporate vested interests engorged on the profits of privatisation is a powerful obstacle to this essential shift. Pressure for a genuinely mixed economy – something previously regarded as the commonsense mainstream – is bound to grow as the costs and failures of unbridled capitalism mount. Rail can only be the first step."

These issues will be addressed in Scotland at a conference, 'Re-inventing our economy for people and the planet' to be held this September at Glasgow University. More details to follow.



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