Across the world, a wave of remunicipalisations has delivered water services back into public hands, often after decades of private mismanagement.
Yet the United Nations and many governments still seem convinced that we need Public-Private-Partnerships (PPPs) and private finance to achieve the Sustainable Development Goals (SDGs). They remain deluded by the false promises of PPPs, even as the evidence of the crisis of privatisation is mounting.
Just look at the meltdown of many privatisations in the UK: even the Conservative Environment Secretary Michael Gove is chastising the behaviour of privatised water utilities. He recently highlighted how tariffs are too high, financial manipulations and tax avoidance are endemic, shareholder dividends swallow most of the profits, and CEOs pay themselves exorbitant salaries. And this from the party of Margaret Thatcher.
A recent report published by Public Services International and the Transnational Institute shows that since 2000 there have been at least 235 cases of water remunicipalisation in 37 countries, affecting more than 100 million people. So what’s driving this trend?
The motivations for ending privatisation in the water sector include cost savings, improved quality of service, financial transparency, and regaining operational capacity and social control. Environmental objectives, such as speeding up renewable development or reducing waste are other key drivers. And of course, providing social tariffs for low-income households (where many families cannot afford the high utility bills) is another key reason.
Furthermore, there’s mounting empirical evidence that remunicipalisation across the public sector makes economic sense. The termination of transport PPPs in London resulted in a £1 billion reduction in costs, mainly through the elimination of shareholder dividends and legal fees. In Canada, after the government decided to build four schools via public provision rather than through PPPs, the savings were enough to build an entire new fifth school.
Yet the unfortunate reality is that over one billion people remain without access to safe water. In 2015 the UN endorsed universal access to water by 2030 as one of its SDGs. How can we ensure our public water operators are able to deliver?
We need to demand a fairer global tax system, so we can invest in essential infrastructure such as modern water utilities. Failure to do so can lead to devastating consequences such as in Flint, Michigan where cost-cutting paired with a hefty corporate tax cut led to the poisoning of thousands of (mainly poor) people.
Another key step is to remove public services from trade deals, which often dissuade or penalise governments for acting in the public interest. Finally, Public-Public Partnerships (PUPs) between water utilities can assist in sharing of both best practices and resources.
The turning tide in the privatisation debate is welcome news to public service workers, unions and the wider public. Now we need to convince our global leaders to go with the flow.
