Remunicipalisation: breaking through as public policy

The remunicipalisation of public services – also referred to as “in-sourcing” and “de-privatisation” – is increasingly being implemented as a viable policy alternative to tackle economic inequalities and concurrent, intersecting social and environmental challenges. The delivery of vital public services such as water, health, education, energy, waste and care services has long been informed by dominant “neoliberal” policies and tools, such as privatisation, public-private partnerships, and austerity measures. However, more than 20 years of research and analysis by labour unions, civil society organisations, and academics - as well as some UN and even OECD studies - has shown that such policies reduce the technical capacities and political agency of local decision-makers, workers and residents, and increase - rather than decrease - inequalities within and between countries and communities.[i] 

The Covid-19 pandemic, climate change, and widening inequalities have brought the importance of local public service provision to the forefront of public attention, prompting a global shift towards a new generation of pro-public narratives and practices. Municipalities are increasingly choosing (re)municipalisation as a viable alternative to the privatisation of public services.[ii] 

Within this context, the idea of what is “public” is being redefined.[iii] No longer is it attached to a traditional conceptualisation of the “state” associated with colonialism, top-down managerialism, centralisation and patriarchy. Instead, the concept of the “public” being articulated is democratic and inclusive. Public ownership is orientated towards de-commodified, socially just, and gender transformative public services run in the common interest. By challenging both accepted economic wisdom, and the opaque governance structures and distorted profit motives that underpin privatisation, remunicipalisation can build public service institutions that better address the critical societal and environmental problems of our times.  

The process of remunicipalisation is diverse and exists within an ecosystem of a range of public delivery models, from traditional forms of state ownership to other forms of collective ownership, public-community and public-public partnerships (PuPs), as well as multi-governance collaborations that involve actors at different scales. We can see local models of democratic ownership involving public goods-based governance, users/resident/workers participation, co-design and delivery with the community, as well as de-marketisation and subsidiarity.[iv]

Commercialised, financialised and marketised public services impede the manifold collective objectives that are vital to all communities across the world: stable access to clean drinking water and nutritious food, healthy and clean environments through sanitation, waste management and energy supply, education and the equitable access to space through transport, cultural facilities and social and public housing. Remunicipalisation redefines essential resources such as water and sanitation, energy, public health, care, waste services, and housing as public goods. Contrary to consumer products and profitable investments, public goods hold an unquantifiable value for the wellbeing of people and the planet. The experience of the last four decades proves that transnational capital markets fail to deliver and protect public goods and satisfy even the most basic requirements for human wellbeing and the environment.[v] New forms of public ownership are therefore key to achieving the UN Sustainable Development Goals (SDGs).

Remunicipalisation breaks the monolithic, one-sided neoliberal dogma which underpins public policies and New Public Management approaches that have dominated global public policymaking since the 1970s - and brings the “public” back into development discourse. It redefines the important demarcation lines between public and private sectors delivering essential public services by and for the public.

Embracing remunicipalisation: a narrative shift in public policies

Beyond labour unions, civil society organisations and some local governments that have been promoting remunicipalisation for decades, the de-privatisation of public services is increasingly becoming a viable and legitimate policy to effectively respond to multiple crises.  Local authority organisations are starting to view remunicipalisation and de-privatisation as pragmatic, effective tools that can deliver more equitable access to high-quality local public services. In the context of austerity and scarce resources, remunicipalisation uses local capabilities and skills to maximise the transformative impacts for the public purse. Local authorities and utilities are using re-municipalisation to secure more inclusion and democratic participation in the making and shaping of public service delivery systems.

In their joint review and analysis of the response and adaptation of local public services in continuing to secure public service access through the Covid pandemic – which also involved the participation of labour unions - the UCLG, Metropolis, together with LSE Cities, found that: 

“There are many potential benefits associated with remunicipalisation. First, as profit generation is not the goal of the public sector, surpluses can be used to expand service infrastructure, improve quality, lower tariffs, improve working conditions and hire more staff. This can lead to enhanced universal, equitable, inclusive access. By ensuring that services are provided to all territories - not just to the profitable ones – remunicipalisation can be a powerful tool for tackling territorial inequalities. ... Lastly, through user and resident participation, remunicipalisation can increase the transparency, accountability and effectiveness of service delivery. It also provides opportunities to democratise public services by narrowing the gap between users, providers, authorities and workers”.[vi] 

The concept note of the Roundtable of Local and Regional Governments at the last World Urban Forum (WUF11) in Katowice, Poland reads: 

“...social inequalities have exponentially increased since mid-1970s, and the inability of governments to develop social policies to reduce them has turned into acute socioeconomic segregation in major cities. Local governments play a key role to revert this trend, due to their strategic position of proximity and knowledge of community needs. RemunicipaliSation - the return of public service provision to municipal control - has emerged as a legitimate policy option in cities where privatization of public goods has hindered access by low-income households”.[vii]

Remunicipalisation increasingly appears on the radar of UN Agencies. In 2021, the International Labour Organisation (ILO) acknowledged remunicipalisation in the background report to the 2021 Technical meeting on the future of decent and sustainable work in urban transport services: 

“In recent years, a number of privatized public transport services have returned to public sector ownership (remunicipalization) in some countries”.[viii]

“Reform and privatization of municipal services have influenced conditions of work in the sector in different ways, including in terms of work intensity, income, pension rights, health and other benefits, health and safety outcomes or job security. In some cases, when urban passenger transport services have been outsourced or transferred to the private sector there has been a significant impact on the terms and conditions of employment for the staff concerned and on employment levels”.[ix] 

The 2022 New Urban Agenda Quadrennial Report by the UN General Secretary notes:

 “The return of public service provision to municipal control (remunicipalisation) has emerged as a viable and legitimate policy option in cities where privatization of public goods has hindered access by low-income households. In 2019, the State of Selangor (Malaysia) remunicipalised its water supply service to promote social justice and transparency in service delivery. After a large private waste management company in Norway declared bankruptcy, 13 municipalities in that country decided to remunicipalise waste collection for improved equity and fostering of knowledge within the community”.[x]

Similarly, UN Habitat’s World Cities Report 2022 emphasises that

“’Remunicipalisation’ captures the trend of governments reversing the privatization trend of the 1980s and taking back ownership of assets and services that had previously been outsourced (…) co-production of urban services with the involvement of public actors and citizen groups can overcome persistent challenges. Many governments are indeed revisioning their relationship with private service providers, and are returning public service provision to municipal control, especially in urban contexts where the privatization of public goods has hindered access by low-income households. (…)  Remunicipalisation is not mere change in ownership. Rather it is a new form of urban governance that reflects collective aspirations for social and environmental justice and the democratic management of public services”.[xi]

Finally, the Sixth edition of UCLG’s Global Observatory on Local Democracy and Decentralization (GOLDVI) Report on the state of urban and territorial inequalities worldwide launched at 7th UCLG World Congress in October 2022 acknowledges and recommends remunicipalisation as one of the seven key policies (“recognize, protect, regulate, invest, remunicipalize, scale and advocate”) to fight inequalities in cities and territories and as an investment to protect the commons.[xii]

“One way of ensuring that services remain as commons that are ensured and provided by public institutions (and often LRGs) is through their remunicipalisation or deprivatization. Local authorities, local inhabitants and public workers are increasingly deprivatizing public services and common resources by returning them to public ownership and control. This process often includes experiments with mechanisms of democratic governance, accountability and participation. This is happening in various ways: the non-renewal of multiyear concessions/outsourcing contracts with private providers; taking over after private operator withdrawal or bankruptcy; via local government authority decisions; and/or by democratic referenda. As of February 2021, the Public Future database listed 1,451 verified examples of such cases since 2000, of which 974 were deprivatizations and 477 municipalizations”.[xiii]

The report further views remunicipalisation as a public policy approach that helps expand quality public service provision and guarantees universal access as a state responsibility:

“Remunicipalization is also (…) an argument in support of certain public goods, such as access to basic services, having to be universal, and ensured by the state. (…) One specific form of investment that LRGs can undertake is to expand and protect the provision of public services by public institutions at the city-scale. (…) Remunicipalization, or deprivatization, can be viewed as both a means to and an end of commoning”.[xiv]

Gathering data and developing knowledge on the global remunicipalisation trend: the Public Futures database

While for many years the Privatisation Barometer provided metrics to organisations including the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) to demonstrate the success story of privatisation, up until 2021 there has been no database that reports on deprivatisation, remunicipalisation, and local public ownership. The lack of data has contributed to a lack of awareness among international policymakers of the global scope and spatial expression of the deprivatisation trend. There has in particular been a growing trend for (re)municipalisations in the period since 2000 with an acceleration in the number of cases from 2010 onwards.[xv]

In this context, Public Futures is the only global database that catalogues the process of de-privatisation. As such, the database supports the growing global pushback against privatisation by enabling more systematic research and context-specific knowledge of the impact of public services on socially and ecologically just and equitable public services. It can fill a knowledge gap about the potential, variety, and effectiveness of municipally- and publicly-owned services in delivering critical public policy goals such as tackling inequality and poverty as well as addressing climate change.

Public Futures was established through a partnership between the Transnational Institute and the University of Glasgow, and in collaboration with Public Services International (PSI) Global Union. Between 2007-2015, the Transnational Institute (TNI) and a global network of partners started research on water remunicipalisations. This work is ongoing: the research focus has expanded to other sectors, such as water, health care, housing, transport and all local government-delivered services. In 2021, the Public Futures Database was launched. Activists and researchers from 16 organisations have been involved in the data collection process so far.[xvi]Submissions are verified by researchers of the database team from the University of Glasgow and TNI. All cases are accessible for research and download on the website. 

The purpose of Public Futures is to facilitate robust, transparent, and accessible crowdsourced data on de-privatisation and public service provision.  The database has catalogued 1,601 cases in 71 countries across 99 essential services where local governments have brought formerly privatised services back into public ownership or established new public entities to meet people’s essential needs.[xvii] Because most of these services take place at the local or municipal level, and in many countries are largely the exclusive or shared responsibility of municipal government, the dominant trend in public service de-privatisation has been one of re-municipalisation, although the database also captures cases of national level de-privatisations (nationalisations).

Remunicipalisation and World Cities Day 2022 

World Cities Day brings Urban October to an end on 31 October each year and was first celebrated in 2014. The theme for this year’s World Cities Day is “Act Local to Go Global” as local action is critical to achieve the Sustainable Development Goals (SDGs) by 2030. There currently are only about 87 months, 380 weeks or 2600 days left to implement the 2030 SDGs. 

With such a short timeframe and as the daunting concurrent crises the world faces and are here to stay, remunicipalisation is a viable and effective public policy to deliver concrete solutions to cities, towns and territories to expand much needed access to local quality public services, and to tackle the many deepening and widening inequalities within local communities, while protecting our common resources and providing opportunities for democratic ownership, enhanced accountability and participation. 

Authors:

• Daria Cibrario, Local & Regional Government Officer, PSI

• Prof. Andrew Cumbers, Professor of Political Economy, Adam Smith Business School, University of Glasgow