changes in public services

Reclaiming public services

What if what the media is telling us about the decline of public services is wrong? This is what a report by the Observatoire des multinationales, the association that monitors the CAC 40, reveals, not to play the stock market, but to measure its ecological and social impact. The desire to put an end to abuses by private operators or violations of workers' rights, the desire to regain control of the local economy and resources, the desire to provide an affordable service to citizens, or the aspiration to implement ambitious energy transition strategies would be reasons for municipalities to reappropriate services to their citizens. Or how cities and citizens are trying, despite austerity, to invent the public services of the future.
Eau, energy, school catering, transport... A worldwide wave of remunicipalisation is underway, as the report reveals. Reclaiming public services. How cities and citizens are turning the page on privatization. Objectives: to better respond to the real needs of citizens and users, to implement more ambitious social and ecological policies, and no longer to drain public budgets in favour of the profitability and expansion of multinationals. Multinationals are trying to hamper this groundswell, with the help of conservative governments that are enacting laws prohibiting such remunicipalisations. A new chapter of public services and political, social and ecological struggles is being written.
"You would be forgiven, especially if you live in Europe, for thinking that public services are by nature expensive, inefficient, a bit outdated, and very difficult to reform to adapt them to today's challenges... " Thus begins the new report on the remunicipalisation of public services, published today by the Observatory of Multinational Companies in collaboration with the Transnational Institute and other international partners, notably from the trade union world. (1). Listening to much of the media, politicians and so-called experts, public services would have entered a phase of irreversible decline, and would inevitably have to leave an ever-growing place for the private sector and its logic of profit.
However, behind the veil of dominant discourse, a completely different story is being written. Just about everywhere, particularly in Europe, elected representatives and groups of citizens have chosen to set out to win back their public services, mainly at local level, to defend their values and to realise their democratic, social and environmental aspirations. It is these stories, which are not sufficiently well known, that our little book entitled À la reconquête des services publics. How Cities and Citizens Turn the Page on Privatization highlights.

Water, energy, transport, school canteens, social services: what can be remunicipalized?

In France, the remunicipalisation of water has increased, with at least fifty towns and cities, from Paris to Grenoble, from Rennes to Nice, having taken direct control of their water management over the last fifteen years (Read more on this subject: "...). Remunicipalisation has enabled Paris to pursue a more sustainable and democratic water policy".). In Germany, a broad movement to remunicipalise the production and distribution of electricity, via cooperatives or municipal enterprises, is underway as part of the Energiewende (energy transition). The phenomenon goes far beyond these two emblematic sectors.
In Norway, where the 2015 municipal elections in many cities have brought "red-pink-green" coalitions to power, newly elected teams are working with unions to bring municipal health and social services back under public control. In Britain, Jeremy Corbyn and Labour came close to an unexpected victory in the last election by campaigning against austerity and proposing the renationalisation of the post office, rail, water and part of the energy sector. Cities such as Nottingham, Leeds or Bristol - and perhaps tomorrow London - have set up municipal energy providers to combat growing fuel poverty and promote renewable energy. In Spain, many cities conquered in 2015 by citizens' coalitions are now embarking on all kinds of remunicipalisations, such as Barcelona, which has remunicipalised crèches, social services and funeral services, created a municipal energy company and now aims to regain control of its water.

"A basic trend that will continue"

Outside Europe, North American communities such as the island of Kauai, Hawaii, or Boulder, Colorado, have also committed to creating new local public enterprises to respond to the climate crisis. In India itself, the government of the capital city of Delhi has created a vast programme of new public clinics to ensure access to care for the poorest, who were previously left to the exorbitant costs of private doctors or charlatans.
In France, remunicipalisation is affecting new sectors, such as public transport. "Over the last ten years or so, some thirty French local authorities have moved from private to public management of their transport, and almost none of them have gone in the opposite direction, explains Arnaud Rabier, Secretary General of Agir Transports, a French association of public transport operators and small local private operators. This is a fundamental trend that will continue. »
School canteens are also concerned: the return to direct public management often goes hand in hand with the desire to favour local and organic food, and more generally to better control the price, content and quality of the meals served to children - an increasingly sensitive issue economically and culturally in France today.

Achieving social and environmental objectives

The report Reclaiming public services has 835 cases of remunicipalisation worldwide. The list, which is the result of a census to which many European trade unions contributed, is not exhaustive, but suggests that something is definitely happening. These "remunicipalisations" - a term which also includes the creation of new municipal public services - are diverse in scale and motivation. Some are primarily aimed at saving money or stopping abuses by providers; others at ensuring an affordable and accessible service for all; still others at influencing the local economy or achieving environmental and climate goals (see also : What room for manoeuvre for local authorities in the face of free trade agreements and multinationals?).
Depending on the sector and country, these remunicipalisations embody either emerging but still partly marginal movements, or fundamental trends that contribute to a profound transformation of the services in question, such as the energy sector in Germany (see : France, Germany: when energy transition rhymes with the reconquest of public services). But the general message is clear: there is an alternative to ever more austerity, ever more power for the private sector, and ever higher rates for ever more degraded service.

The obstacle of fiscal austerity

The network Energy Cities of Cities for Energy Transition has also just published a report on energy remunicipalisation. "More and more local elected officials are coming to see us to ask us how to remunicipalize, says Claire Roumet, director of Energy Cities. The question is no longer even for them whether it makes sense from an economic or an environmental point of view. They are already convinced of that. The question is how to deal with the private companies and the regulations that are in place. »
Of course, remunicipalisation is not a miracle solution. Public management is not necessarily better for user-citizens and workers in the sectors concerned if they are not truly involved. It can even be a source of corruption if it is not controlled. Nevertheless, the phenomenon corresponds to underlying trends. The current context of austerity is clearly a major obstacle, as in Grenoble, where ambitious projects to develop local public services led by Eric Piolle's municipality are having to cope with the reduction in state funding.
This austerity is also an incentive for elected representatives, faced with the reality on the ground and the real needs of the people, to totally rethink the organisation of their public services. The financial drain on the private sector - to pay shareholders, managers, auditors, consultants or lawyers - seems less and less acceptable. Most of the sectors concerned are characterized by monopolistic or oligopolistic situations which push some decision-makers, even among the moderates or conservatives, to favour the option of public management ... in the name of competition. Finally, the "innovation" and "efficiency" that private sector champions boast about are increasingly appearing for what they often are: a matter of drastic cost and expenditure reductions, from which service employees first suffer, and then users.

"An essential lever to lead our cities on the road to energy sobriety".

It is also questionable whether the economic and technical models traditionally carried by multinational public service companies are not outdated. One of the most striking conclusions of this report is that remunicipalisation increasingly goes hand in hand with objectives of adaptation to climate change and relocation of the economy, which are opposed to the technological solutions and heavy infrastructure proposed by multinationals. This is, of course, the case in the energy sector, where the wave of German remunicipalisation accompanies the emergence of more decentralised energy systems.
"The takeover of local public services by elected representatives in areas as essential as water and energy is a major democratic challenge. In the face of climate change, it is also an essential lever to lead our cities on the road to energy sobriety, the development of renewable energies, the protection of resources and the right to water", explains Célia Blauel, deputy mayor of Paris in charge of the environment, the climate plan and water, and president of the remunicipalized operator Eau de Paris.

Local channels for canteens and the "zero waste" objective

The trends are similar in sectors such as waste or school catering. The business model of companies supplying canteens, such as Sodexo or Elior, has traditionally been based on industrial agriculture and long supply chains. They are trying to adapt by also offering more local food, with a greater share of organic food. In other sectors such as waste, on the other hand, private economic models - based on volume maximisation, landfill or incineration - seem incompatible with the current challenges of drastic waste reduction.
"When looking at the best examples of local "zero waste" policies, one of the success factors is the alignment of objectives and interests between public decision-makers and operators in charge of collection and treatment, explains Flore Berlingen, director of Zero Waste France. As long as the remuneration model for private operators is based on the tonne of waste treated, a zero-waste policy will be difficult to reconcile with private management, as there will be a profound divergence of interests between the local authority and its service provider. »

When the public finances the international expansion of the private sector

The privatisation of public services is one of the "specialities" that the French economy - along with the arms industry, nuclear energy or banking speculation - offers the world. Veolia and Suez in the water and waste sector, Sodexo and Elior in the catering sector, EDF and Engie in the energy sector, RATP Dev, Keolis and Transdev in the transport sector, Atos and Sopra-Steria in administrative subcontracting, not to mention the position of groups such as Vinci or Bouygues in the infrastructure sector. Many of our "national champions" are champions of privatization, even if, paradoxically, a good number of them include the French State among their majority or major shareholders.
It is probably in the transport sector that this gender mix is most visible. The three main multinationals competing for public transport privatisation contracts at the international level are three groups under the indirect control of the French State: RATP Dev is a subsidiary of RATP, Keolis of SNCF, and Transdev has the Caisse des dépôts et consignations as its main shareholder. These groups have in common that they first built their business model in France before exporting it internationally. The current trend towards remunicipalisation, and more generally the price cuts to which they are increasingly obliged to agree, could undermine this model. "I don't see why French local authorities should continue to finance the international expansion of these large groups, stresses a player in the transport sector.

Remunicipalization transcends partisan divisions

Few French cities remain, however, which, like Grenoble, have made remunicipalisation and the development of local public services an explicit political strategy. The citizens' movements and left-wing parties that conquered a large number of Spanish cities during the 2015 municipal elections have also made remunicipalisation one of their main battlegrounds, with a view to fighting corruption and providing access to essential services. It is also central to the "municipalist" vision promoted, among others, by the city council of Barcelona, which has just organised an international summit of "Cities without Fear" (Read Basta's report!).
The re-municipalization movement often transcends partisan divisions. In some sectors, it is not very politicised. "Re-municipalisation in the transport sector is not about political cleavages, underlines Arnaud Rabier. Local authorities no longer need the expertise and innovation of private groups as they did in the 1980s; they can now manage their tool themselves at a lower cost and with the necessary flexibility, whereas public service delegation contracts are often a shackle. »
Led by the very right-handed Christian Estrosi (LR), the Nice metropolitan area has remunicipalised its public transport, canteens and water, as well as the jazz festival and the city's wholesale market. Other cities have embarked on ambitious remunicipalisation policies, but without fanfare, such as the Briançon agglomeration (divers-gauche), which has recovered its water and waste management, while developing a local energy service. (read report).

Laws to prohibit remunicipalisations add to the barriers of multinationals

What do these political experiences have in common? Is it a form of reaffirmation of the local level, both against the financialized and deterritorialized economy of multinationals and against the national and European levels? Many European cities engaged in remunicipalisation are characterised by their conflicting relationship with national governments and the policies of budget cuts and privatisation imposed on them. On the other side of the Atlantic, communities and citizens' groups see the creation of local energy companies as a way to get around the Donald Trump federal government's obstruction of climate change.
Governments, often right-wing governments, also deliberately seek to prevent remunicipalisation. In Spain, conservatives have introduced laws that outright prohibit the creation of new local public enterprises and make it difficult for a municipality to take over the employees of a private provider. The Spanish Ministry of the Interior has even decided to take the city of Valladolid to court, along with the private company and employers' lobbies, because it had remunicipalised its water. Also in Great Britain, Parliament recently passed a law prohibiting cities from creating new public bus companies.

A new chapter for political, social and ecological struggles

These national constraints are compounded by European rules and the threat of free trade treaties and their investor protection clauses. At least 20 private international arbitration proceedings - the famous ISDSs associated with draft treaties such as Tafta and Ceta - have already been initiated against cities or states that have taken over their public services. The latest example to date: when Vilnius, the Lithuanian capital, did not wish to renew its district heating concession contract with Veolia, the French group responded with at least two ISDS proceedings in Washington and Stockholm, claiming at least €300 million in compensation.
If the wave of remunicipalisation is real, it is also part of a difficult balance of power for cities. This is why they are increasingly tempted to join forces, at least within the framework of technical collaboration networks, and for some of them within the framework of an "international cities" such as that dreamed of by Barcelona. By rewriting the future of public services, these cities and their citizens are probably opening a new chapter for future political, social and ecological struggles.
Olivier Petitjean, managing editor of theObservatory of Multinationals
Courtesy of the author
(1) Read the summary of the report in French (co-published by the Transnational Institute (TNI), the Multinationals Observatory, the Austrian Federal Chamber of Labour (AK), the European Federation of Public Service Unions (EPSU-EPSU), Engineers Without Borders Catalonia (EWB), Public Services International, the Public Services International Research Unit (PSIRU), We Own It (Great Britain), the Norwegian Union of Municipal and General Employees Fagforbundet, the Municipal Services Project (MSP) and the Canadian Union of Public Employees (CUPE).)

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