“we resist the public-private partnerships that only serve to extract resources from the public for private interests.”
This is one of the key messages that came out of a conference, ‘Our Future Is Public’, attended by over a thousand campaigners, activists and researchers, from more than 100 countries (in Santiago, Chile and online). We were one of them. The aim was to discuss the critical role of public services and how to counter the dominant paradigm of growth, privatisation and commodification.
Public Private Partnerships (PPPs) were high on the agenda. PPPs are long-term contracts where the private sector designs, builds, finances and operates an infrastructure project. PPPs are highly lucrative for the private sector, and leads countries down a path where taxpayers’ money is spent on assuring a profit to company’s shareholders rather than the best possible service for the public. Another problematic feature is that the public is kept in the dark about the scale of this profit because of corporate confidentiality.
Scotland’s PPPs in a global context.
PPPs are found all over the world, despite evidence of their failures, as made clear in the report, History RePPPeated II: Why public-private partnerships are not the solution. This report uses seven in-depth investigations into PPPs across a range of sectors, from healthcare and education to roads and water supplies to illustrate the devastating impact they can have on communities and the planet. The report found that all of the projects featured came at a high cost for the public purse and posed an excessive risk for the public sector. They resulted in a questionable diversion of public funds, particularly during the Covid-19 crisis, and some also caused serious environmental harm while others had serious impacts on women in particular. All of the PPPs investigated lacked transparency and/or failed to consult with affected communities. One of the case studies was written by Jubilee Scotland, reporting on Scotland’s hospital parking scandal during the height of the Covid-19 pandemic.
The UK Government rejects domestic use of PPPs.
PPP schemes were first introduced in the UK in the 1990s under the term PFI. However, the UK Government abolished the use of PPPs in 2018, after the UK Treasury called the model “inflexible and overly complex”, and the Office for Budget Responsibility suggested that the scheme was a “source of significant fiscal risk to government” (UK Budget 2018). This criticism supported a report from The House of Commons Public Administration and Constitutional Affairs Committee, which concluded that: “It is unacceptable that almost 30 years since the first PFI projects were initiated, the Treasury cannot produce evidence to support its claims that PFI is worthwhile for any reason, apart from the fact that it takes debt off the balance sheet.” The schemes have also been criticised by Audit Scotland, which published a review of the PPPs used in Scotland and found them to be expensive and in need of more oversight.
Exporting a failing model to the global south.
Ignoring all the evidence, Scotland continues to use PPPs and the UK government keeps promoting PPPs to developing countries as a means of financing and managing infrastructure.
PPPs are thoroughly embedded in development strategies and the UK’s Department for International Development uses money from its aid budget to fund the Private Infrastructure Development Group (PIDG) which exists to promote PPPs as a means of financing infrastructure in developing countries.
Additionally, the UK has “trained over 600 overseas officials from 50 countries on PPPs and infrastructure.” (The Private Finance Initiative (PFI): How Come We’re Still Paying for this?). At both the UN and the Bretton Woods Institutions, the PPP model is being held up as a method of mobilising private capital in support of the Sustainable Development Goals (SDGs). However, the more governments pay private firms, the less they spend on essential services. Furthermore, PPPs limit access to services because they “often come with new or increased fees for users of services” (Eurodad, ‘Public-Private Partnerships: Global Campaign Manifesto). Additionally, these models in their different forms contribute to the accumulation of debt in the poorest countries in the world. Debt which could have been avoided.
Scotland must take it upon itself to promote more responsible lending and borrowing practices. And it starts with abolishing the use of PPPs in Scotland. We need to rethink the way infrastructure is managed and financed, and find a way forward that puts people and planet before profits. And the Scottish population agrees: 62% believe that public buildings such as schools, hospitals and community centres should be fully publicly owned and 67% think that it is important to address that the “Government uses a scheme where private companies can make large profits from designing, building and managing public infrastructure.”
If you agree, please sign Jubilee Scotland’s petition to abolish the use of Public Private Partnerships in Scotland! We would love to hear about your experiences with PPPs around the world – share your story with us on Twitter tagging @jubileescotland #NoMorePPPs #PPPPetition