‘Privatization has failed repeatedly’
Cat Hobbs is the founder and director of UK-based We Own It , which campaigns ‘to end privatization for good so that people come before profit’. She started We Own It five years ago to be a positive voice for public ownership, having previously campaigned for better public transport and been frustrated by how privatization failed to deliver for `rail and bus passengers.
‘I believe public services are the best, most civilized, wonderful thing that human beings have ever invented,’ she says. Dinyar Godrej interviewed her about the campaign.
Why should public services remain in public hands?
We think there are three reasons.
Reason number one: they are vital services, things that are important for all of us to be able to function well in society. And so people have this moral sense that therefore they should be run for people rather than profit.
Reason number two: they tend to be natural monopolies, for example water. It makes sense to run that monopoly in a publicly accountable way rather than trying to create an artificial market where it is pretty much impossible to do so.
The third reason is these are services where you need some democratic accountability, so you need accountability both as users of the service and as citizens more generally. So for example you might want a say over where your bus goes and what kind of service you get from your bus provider. But more generally, you might want a say over the future of transport in the country. And if you leave all of those choices, big and small, up to private corporations which are motivated by profit, it’s very difficult for the public to have a democratic voice and a democratic say over their services and the future of their services.
There’s been a real hollowing out of the public sector. We know that it is perfectly possible for public organizations to run services well. But what we’ve seen over the past 30 years, and especially since 2010 [when a rightwing coalition government came to power in the UK], is underfunding, undermining, austerity programmes, cuts to public services and cuts to councils and the kinds of organizations that could potentially deliver services. The public sector needs to have sufficient funding, it needs to have sufficient know-how and expertise, and it needs to have the assets that make public ownership possible.
Why has the privatization of public services been such a failure?
Over the last 30-40 years, effectively, there’s been an ideology that insists that private companies have to do everything. So, instead of having a mixed economy, we must have everything turned into a market, turned into a consumer product, turned into something the private sector can profit from.
What then happens is you have private companies with the wrong incentives and operating in the wrong way. The quality often goes down, because private companies prioritize profit rather than the care that is often inherent in providing a public service.
We often see that costs [to the public] go up, because a private company will charge as much as they can for the service they’re providing, because that’s a logical thing for them to do.
We can’t hold private companies accountable in the same way that we can hold public bodies accountable. Which isn’t to say it is always easy to hold anyone accountable, but it is harder when you have services run at one remove from the public.
Private companies end up cherry picking our services. For example, if you’re a private company running probation services, you want to deal with the easy, low-risk offenders, rather than dealing with high-risk offenders, because that takes up less time.
You have the same thing in the postal network, in the bus network. When you run a network in public ownership, you can cross-subsidize. You can say, it is harder to reach these people in rural areas, but we can use the profitable bits of the service to cross-subsidize the less profitable bits.
If you’re a private company, you want to pick out the profitable bits, make your money from them and ignore the rest, regardless of what people need. And often that also goes hand in hand with fragmentation, because instead of having an integrated service where everybody is wanting to share information and improve things, you have private companies wanting to get a profit. There’s less flexibility as private companies are always thinking about the bottom line.
We have often quite big multinational companies which are experts at bidding to run contracts, but aren’t really interested in delivering well when they get them. They’re often ‘too big to fail’, as we saw with Carillion. When things do go wrong, it tends to be the private sector that takes the profit and the public sector has to pick up the bill, pick up the pieces, because there is no alternative. Public services are too important to be allowed to disappear; the service still has to be provided.
People often say that surely the answer would be to have better, stronger regulation rather than de-privatization?
A lot of claims have been made for regulators. The promise of privatization back in the 1980s was: it will be great for consumers, you’re going to see lower prices, better quality. These private companies are all efficient and shiny and will deliver what you want.
The reality is completely different.
People are paying more to receive a service where often there is no investment. Many people in the South [of England] didn’t have access to water the other week, because the water company had failed to do the forward planning and investment needed in our water infrastructure. That’s what they are there for, but from their perspective, they are just there to extract [a certain amount of] profit a year.
The regulators in that context have completely failed to have any meaningful impact at all. They are now saying they need another chance for doing another review. It is too late for that really. It’s too little, too late.
The public has never really gone along with privatization. Even back in the 1980s when these policies were introduced – the public was highly sceptical then, and, if anything, they are even more sceptical now.
But, public ownership is hugely popular. The regulators aren’t hugely popular. People can see that this is a bit of a stitch up.
There is a whole industry built on the people doing the regulations, writing the contracts, the lawyers and accountants, the private companies and the bidding. And it is incredibly complex, and costly, and fragmented. The privatized system hasn’t delivered. It is very hard to come up with an example where privatization has delivered. And the regulators are a part of that whole system.
So, how much longer do we want to give them before we actually say, well none of these promises have been delivered on, and we’ve given you 30 years. Maybe that is enough now and we need try something else.
What are the diverse areas in which you are campaigning and have you had any successes?
We do two things: we run campaigns where we think we might be able to win and we try to shift the debate through communication.
The first campaign that we ran was in 2013, trying to get the government not to re-privatize the East Coast Line, which had been working very well in public ownership. We built up quite a lot of traction for that and we worked with all the different rail campaigners and unions.
We didn’t succeed in that campaign, but we’ve actually picked that campaign up again now, because the East Coast Line is once again running into problems in private hands. We’re now campaigning to bring it back into public ownership.
We Own It started out with just me on my laptop in my bedroom and we’ve now built up our supporter base and our networks and we’ve had three successes in terms of tangible victories. In 2015 we helped to stop the government privatizing Network Rail, the company. So, at one stage the government was looking at private ownership as an option for Network Rail, which is obviously public, the only publicly owned bit of the rail network, and we helped to push that back.
We then had a victory with other campaigners on the Land Registry – we helped to push back privatization. There was a proposal to privatize the Land Registry and we worked with PCS and 38 Degrees to stop that. We were interested in the fact that the Land Registry, along with a bunch of other public assets, was profitable. So we did some work with the New Economics Foundation to see how long would it take before selling off the Land Registry became a really stupid economic decision. Because, actually, you are losing out on the millions of profit every year that otherwise would have gone to the public purse.
If you have a profitable public asset, making money for the public, why not keep it working in public hands?
Then last summer we led the campaign against the privatization of NHS Professionals, which is the NHS staffing agency. And again, working with other NHS campaigners, we led that campaign and we managed to stop the government from selling off that organization.
I felt very chuffed about that in particular, because my parents work for the NHS, so that was quite personal, to be able to point at it and say, ‘we did that’.
We started out small, but we’re growing all the time and getting more victories. And I guess what is exciting is that because of the Labour Party’s manifesto pledges around public ownership, we’re getting many more opportunities to talk about these issues. Politically, it is a very good time, a positive time, to really advance this agenda.
This article was produced as a web accompaniment to the May 2018 issue of New Internationalist, which focused on public ownership. You can find out more about We Own It and join their campaign on their website.