Privatisation leads to top down services. Public control should mean the public have a say.

A new paper from the New Economics Foundation argues that public services should be taken back into public control - and the public should be given a real say.

James Angel
3 July 2014

Aneurin Bevan addresses a crowd just outside Tredegar in 1960/

“The sound of a bedpan falling in Tredegar Hospital would resound in the Palace of Westminster.” So, it is alleged, said Aneurin Bevan, founding father of the NHS. Bevan’s famous bedpan principle illustrates the sense of social responsibility that underpinned Britain’s post-war settlement. Decades of working class struggle had pushed the state towards an interest in meeting social need and tackling inequalities. This was to be achieved, in large part, through free and inclusive public services.

But one person’s social responsibility is another’s top-down paternalism: the bedpan principle also alludes to the centralising tendencies of Bevan’s approach. Step forward seventy years and state-controlled services run from Whitehall are castigated as inefficient and overly bureaucratic, out of touch with our ‘consumer preferences’. On the back of this critique of the state, successive governments have pursued policies of marketisation, outsourcing and privatisation within public services.

The limits of the market

The problem is that market competition and private sector logic have failed to come good on the promises of their neoliberal proponents. Far from decision-making and knowledge being decentralised, power over public services has been concentrated in the hands of a few supremely wealthy private providers.

Despite the promise of ‘efficiency savings’, evidence of decreasing costs is hard to come by. In fact, many local authorities are now taking services back in house, most often to reduce expenditure. This is despite the fact that workers in the private sector face worse pay and conditions than their public sector counterparts.

Meanwhile, as private providers ‘cherry pick’ profitable services, the finances of the public sector are shrinking, reducing its capacity to provide high quality services across the board – a problem which compounds the public sector debt burden left by New Labour’s failed PFI experiments. Amidst a steady onslaught of high profile scandals of private provision – from G4S’s years of overcharging of electronic tagging contracts to Serco’s misreporting of out of hours GP services – it has become ever more difficult to believe in the virtues of free market entrepreneurialism as a driver of public service quality and innovation.

What, really, did we expect? Competition tends to lead to fragmentation and opposition between stakeholders, discouraging the partnerships and holistic thinking necessary for joined-up and preventative services. What’s more, private companies are legally obliged to prioritise shareholder-return, a goal not easily aligned with broader public policy priorities like meeting social need.

A new direction of travel

Is it still possible to realise the power of public services to tackle inequalities and help us live well? There is every reason to oppose the neoliberal agenda for public services. But is the answer to hark back to the ‘Spirit of 45’, which afforded frontline staff and citizens very little power over the services they worked in and used?

Opposing the market in public services need not mean welcoming back top-down control. In a new discussion paper from NEF, we argue for a new direction of travel for public services: shifting power away from private companies, towards citizens and frontline staff. These are the people who are most likely to care about securing high quality services, delivered on the basis of fairness and equality. What’s more, these are the people likely to know best: when you work in or use services, day in day out, you get a real sense of what’s working and what needs to change.

But doesn’t this ‘new agenda’ sound suspiciously familiar? The Coalition’s move ‘from Big Government to the Big Society’ has seen the state retreating and public spending slashed, with the gap left to be plugged by under-funded and overstretched citizens and community groups. The result, of course, has been increasing levels of insecurity and inequality.

How can we shift power to citizens and staff in order to make public services better equipped to tackle social injustices, rather than compounding them?

Shifting power

Firstly, we need to think carefully about what kind of power-shifting measures we want to promote. By moving away from paternalistic expert-client hierarchies to a way of doing public services known as co-production, services can be designed and delivered through an equal partnership between citizens and professionals. This does not mean de-valuing or replacing professional knowledge, but integrating this with the experiential knowledge of service users.

Existing systems of representative democracy can be enhanced by introducing forms of participatory democracy that give citizens more direct control. Across Latin America and in some UK authorities, participatory budgeting allows citizens to make their own decisions about public spending priorities. Iceland recently handed its constitutional reform process over to its public, via a range of online and offline participatory methodologies.

In a similar vein, public agencies could learn from co-operative governance structures by including elected worker and citizen representatives on their governing bodies. While we’re at it, why not encourage public agencies to follow the lead of local authorities like Newcastle by shifting towards less hierarchical working cultures and giving frontline staff more autonomy and trust.

Getting the conditions right

A handful of isolated changes won’t work. What’s needed is a wholesale shift in policy and political culture. The first crucial step is for Whitehall to devolve power to local government, allowing councils the autonomy they need to shape services around local interests and knowledge. National standards of excellence and equality can be developed, with local government deciding on how these standards should be met.

Secondly, we must break with received wisdom and acknowledge that ownership matters. Legislation advocated by the campaign group We Own It would facilitate a shift in ownership away from private hands towards the public sector and other socially oriented not-for-profit entities. While competitive tendering has pitted the public sector in competition with co-ops, mutuals and the community and voluntary sector, NEF advocates an alternative model of commissioning that allows for a collaborative partnership between different publicly oriented institutions, paving the way for a revitalised and democratised public realm.

Pre-existing inequalities of wealth and resources within and between regions must be tackled by re-distributive measures to ensure that all can benefit from more participatory and co-productive services. Meanwhile, a slow and steady move towards a 30 hour working week, alongside action to tackle low pay, would re-distribute time, ensuring that people have the capacity to partake in this kind of ‘everyday democracy’.

Finally, NEF’s research shows that public spending reductions are decimating local services and, despite recent claims of the Coalition, undermining the chance of achieving a lasting economic recovery. We should not accept the prevailing narrative of ‘inevitable funding constraints’. Austerity cuts to public services are unnecessary and misguided in economic terms. We need a new macroeconomic strategy based on government investment, including in our public services.


Governments invariably come to power promising to transform public services. This tends to lead to confusion, disorganisation and, in some cases, wholesale disaster. But a process of democratic transition led from the bottom-up – from the people who really know what needs to change and have a vested interest in these changes being effective – is very different from top-down re-structuring.

We do not have to accept the wholesale transfer of services we all rely upon to unaccountable private hands. Nor is a system run by ‘experts’ for our ‘benefit’ the only alternative.

You can read NEF’s new discussion paper on public services here: Moving beyond the market: a new agenda for public services.

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