PUBLIC APPROVAL Privatization a bust; public services continue their comeback

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PUBLIC SERVICES JUST WON’T DIE. No matter how hard politicians work to impose privatization on us. Reality continues to prove privatization is a bust.

Privatization cannot, and does not, provide us with the range and quality of services we want, need and deserve. A good proof of that is the fact many are abandoning privatization in favour of a return to public administration and delivery of public services.

Hamilton first to bail on privatization
When Hamilton City Council agreed in 1994 to a public-private partnership to privatize its water and wastewater services, it was widely considered to have one of the best services in the country. But over the next decade, things went from bad to worse. Under private ownership, the water and wastewater service cut staff, causing a decline in service quality.

Due to the wording of the privatization contract, the city even had to pay out fines when sewage spills were caused by the private operator’s cost-cutting.

When the contract came up for renewal in 2004, the city council decided enough was enough and took the service back under municipal control. At the time, it was the first decision of its kind in Canada.

Three years later, with the water and wastewater services firmly back under public control, the city stated that it had avoided paying out incentives to private operators of more than $75,000. Moreover, the city-run service proved much more efficient, costing around $500,000 less than the original maintenance budget.

Award-winning return to public ownership
In 1998, the city council in Port Moody, British Columbia, decided to outsource its solid waste collection service. A trade union-backed study advised against it. The unions emphasized the loyalty of city employees. The council privatized the service anyway.

By 2008, public frustration with the private operator was mounting. Service quality had dropped, recycling targets were being missed, and costs were skyrocketing.

The city responded by launching a collaborative project with the Canadian Union of Public Employees to take solid waste collection back under public control. The improvements were dramatic.

Waste diversion rose rapidly from less than 50 percent when the service was privately run to more than 75 percent under public ownership. The publicly-run service also won an award from the Solid Waste Association of North America for its educational work among residents.

Fifteen-year privatization revoked in year two
In 2013, The Regional Municipality of Wood Buffalo, which includes Fort McMurray, Alberta, awarded private operator Top Transit a 15-year contract for Fort McMurray’s transit service.

Within two years, the municipality was forced to invoke a 90-day termination clause, when a report revealed that Top Transit had failed to adhere to staffing requirements. The company had also provoked a large number of customer complaints and had failed to build a bus facility. The municipality also stated that Top Transit had not maintained the fleet well enough to allow buses to run “efficiently and safely.”

Robert Kirby, Wood Buffalo’s director of public works, stressed that the decision to take the transit system into public hands wasn’t primarily about cutting costs. “This allows us to control the revenue stream and put money back into the local transit system,” he stated. “We live in Fort McMurray, we’re part of the community, and we understand what the community’s needs are.”

Even Top Transit employees liked the decision. They were able to transfer to become municipal workers.

Reversing privatizations
These examples from across Canada demonstrate that possibilities for protecting, preserving and even recovering public services exist.

The examples for this article were taken from the report “Back in House: Why Local Governments are Bringing Services Home,” which was funded by CUPE in 2016. The full report can be downloaded here.

 

This article was originally published by The Canadian Labour Institute.  

Reprinted with permission for CALM Members use.

http://www.canadianlabourinstitute.org/story/public-approval