Look to Trondheim: Alternatives for public sector reform in Europe

‘We were very against privatisation,’ recalls Norwegian trade unionist Rolv Hanssen. ‘Then somebody asked us, “We know exactly what you are against, but what are you for?”’ It is a question that, as it pauses for breath in the midst of the neoliberal onslaught across Europe, the Left has increasingly come to ask itself. ‘Defend’ and ‘oppose’ have becoming depressingly familiar fixtures in the Left’s lexicon over the past 20 years. ‘Transform’ has not been. But across Europe trade unions, municipalities and social movements, orphaned by the defection of Social Democracy to the cause of marketisation, have begun to search for new ways to run public services as an essential part of the drive to keep them public. Worker involvement, citizen participation and the mobilisation of civil society have all been utilised in an attempt to wrest the agenda of change from the Right. The inexorable march of the privatisers has been slowed and, in some places, halted in its tracks.

‘Trondheim is our inspiration,’ declared Norwegian Labour party leader Jens Stoltenberg, following the victory of his party and their centre/ left partners in the country’s 2005 election. Observers have described the new government’s programme, which includes a commitment to stop all privatisation and take a more active role in the management of companies, such as railways, in which the state has a majority of shares, as arguably the most radical of any OECD member for many years. Yet Stoltenberg had been seen as Norway’s version of Tony Blair when he became party leader. It was the experience of Trondheim, Norway’s third largest city, in which a coalition of trade unionists and civil society organisations propelled a Left coalition to power on a ‘radical programme to reclaim the public sector’, that forced the Labour party to change direction. From a supporter of privatisation, the party has become an opponent.

The process began in Tronheim in 2002 when the city’s trade union confederation, after consultation with branches, developed a 19 point political programme for the 2003 municipal elections. The core of the programme was a reversal of the right-wing city government’s policy of competitive tendering for public services. Union demands were presented to all the political parties and the trade union confederation ranked their responses, distributing their analysis to members and residents. Parties that had backed the vast majority of the unions’ demands, the Labour party, the Socialist Left party and the Red Electoral Alliance, won a majority of seats on the council. According to exit polls, 70 per cent of trade unionists voted for the Left, compared to 54 per cent in previous elections.

This new Left majority on the council immediately embarked on a policy of remunicipalising public services, opening negotiations to the bring the city’s bus company back into council ownership, and reversing a decision to privatise the city’s cinemas. Contracts for private companies providing care for the elderly were also not renewed. A major programme of investment took place in public schools and Trondheim, against national trends, increased social assistance for those outside the labour market such as single mothers.

‘Look to Trondheim’ became the slogan for the Norwegian Left and the trade union movement, which replicated the Trondheim campaign for the national elections in 2005. Instigated by the NGO Attac and the unions, the Oslo 2005 campaign called on politicians to agree to demands including an end to privatisation and no more tax cuts. 4,000 people attended a demonstration in the capital. In the aftermath of the election, centre and left parties saw delegations from activist groups and the union movement. When the new coalition of Labour, the Centre party and the Socialist Left party, was formed, the privatisation process stopped.

But the victory was not achieved in isolation. As trade unions were attempt to protect public services through a political campaign they were also trying to change them from within. Since the late 1990s, the country’s largest union, the Union of Municipal and General Employees, Fagforbundet, has been pioneering a policy of using the ideas of public sector workers improve the quality of services. Known as the new model municipality project, the strategy is an attempt to stave off the threat of privatisation by taking away the excuse that services are badly run. ‘We know that public sector workers really want to do a good job, at lunch in the canteens they are discussing their work,’ says Rolv Hanssen, a former adviser with Fagforbundent. ‘The idea is to use their knowledge and listen to them.’ In pilot projects in small municipalities, meetings were held between workers and users of services, workers were encouraged to come forward with ideas to make services better, knowledge was shared. All changes were made on the understanding that no jobs would be lost as a result. The centre-left government in Norway has now adopted the policy which will be expanded to 100 municipalities this year.

A similar experiment, known as ‘Come On’, has been undertaken in Sweden by the public service union Kommunal. Workers are encouraged to identify waste and find new ways of working - again with the guarantee that their own innovations will not be implemented at the expense of their own posts. In the words of Kommunal vice-president Lars-Ake Almqvist, ‘Faced with demands from employers for cuts in public services or privatisation, Kommunal realised that just trying to refuse changes is not very constructive, especially as some of the accusations of inefficiency in the public services have definitely been true. So we started in develop a model to build more efficient, non-hierarchical organisation by involving the employees, with the aim of saving money without making people redundant.’ 60 municipalities now follow the approach in areas such as care of the elderly and water services.

British trade unions have also fought the private sector at its own game - competitive tendering - and won. In Newcastle, the public sector union Unison won a ten year £250 million contract in 2002 for the delivery of the city council’s IT and Related Services including the administration of benefit payments, debt collection and council tax. The ‘in-house’ option was chosen in preference to a bid from multinational telecoms company BT. As in Trondheim, trade union victory was built upon a broad-based political campaign involving the formation of an anti-privatisation Public Services Alliance, involving sympathetic local councillors as well as community groups, and the publication of a public services manifesto. According to researcher Dexter Whitfield who helped to prepare the bid, ‘At no stage could anyone have accused the union of only being concerned about the narrow economic interests of its members. This public policy mantle was very important. The membership were equally concerned about the content of their jobs, the service they provided, the process by which they delivered services and to whom they are accountable.’ The confidence engendered by the in-house bid encouraged Unison to revise its whole strategy towards bidding for contracts and it has since won large contracts to run school meals, and IT services in schools against the private sector. The city council’s procurement strategy has also been re-written to encourage in-house bids and evaluate them on equal terms with the private sector. ‘Before the council had to be dragged to the table to put in an in-house bid,’ says Whitfield, ‘now they ask for them.’ And he believes the rest of the UK trade union movement should take notice of what has been achieved in Newcastle. ‘It’s about saying “we can do this” and having the guts to get on and do it.’

But while trade unions have become increasingly imaginative and ambitious in the defence of public services, an alternative thread in the struggle against privatisation has come from a completely different direction, from a movement to empower the consumers of services. The concept of participatory budgeting, a means, in the words of one proponent, ‘for the appropriation of the public sector by ordinary citizens’, has spread to Europe from its spiritual home in Brazil since the millennium. In Spain, 5.2 per cent of the population live in municipalities that practice participatory budgeting. Cities such as Cordoba, Seville, Getafe and Albacete have adopted it. In Seville, a coalition of Socialists and the United Left began devolving power over the council’s finances to 21 neighbourhood assemblies across the city in 2004. Departments of public works, sports, youth, education, culture, environment and health submit up to 30 million euros of their total budget to the deliberations of citizens. The process has resulted in public investment projects such as the construction of swimming pools and sports grounds, urban renewal programmes in poorer areas and repair of public schools. According to Javier Navascués, a researcher and adviser to the municipality of Seville, participatory budgeting proposes a new alternative to both the simple defence of top-down state control of services and privatisation or contracting out. Rather than a rigid preservation of the status quo, it represents a new democratisation of the public realm. ‘Struggles against privatisation in Spain have seldom proposed an alternative to traditional bureaucratic public management,’ he says. ‘People are empowering themselves, gaining a better understanding of how to fight for their projects and dreams without getting lost in the labyrinth of the state apparatus. It is a rewarding experience to see how public officers are questioned by ordinary people.’

In Italy, many municipalities have come together to form the Rete del Nouvo Municipio or New Municipality Network. Committed to ‘bottom up globalisation’ and the protection of local diversity, the network is experimenting with participatory forms of local governance. Many, from the small towns of Grottammare and Pieve Emanuele to quarters of Rome, have adopted participatory forms of adminstartion and planning udgeting in the last ten years. The network, whose participatory democracy principles are now spreading to provincial and regional governments, and Tuscany in particular, is proposing an alternative to the steady sell-off of locally-owned water services to the private sector. The model is based on a ‘shared management’ vision with users of the resource represented on a management board but neighbouring areas given a voice through a ‘transaction’ board to ensure that selfish, autarkic interests do not prevail. Italian law does not yet permit the ‘public-local’ model to exist, and even current centre left ministers are trying to ban experiments by small municipalities, with a new law that encourages simple privatisations instead. The network, however, is now working with the Italian government to try and get the law changed.

There are also efforts to change the law at EU-level. The European Commission has consistently refused to define public services or establish what makes them different from the production of other goods. The European Public Service Union is campaigning for an EU directive to create ‘a protected space’ for public services, giving them immunity from the expanding reach of competition law and the single market. The directive would establish that services of ‘general interest’, such as social services, health, water and education would be exempt from liberalisation, and that public authorities would have the right to ‘self-produce’ their own services without threat of challenges from the European Commission or the European Court of Justice. According to the union, ‘it is better to call for positive change collectively at the EU level rather than individually act defensively at national level.’ A Europe-wide campaign and petition has been launched.

All of the disparate initiatives across Europe embody a sense of urgency to capture the momentum of change from the privatisers. But that does not mean they are homogenous. Movements to increase the participation of workers and citizens in public services have so far developed in isolation, even antagonism, from one another. In Trondheim, where the ‘new municipal model’ of tapping into workers’ knowledge was initiated by a Left municipality, backed by an alliance of trade unions and civil society organisations, participatory democracy for citizens has been a ‘non-issue’ in the words of one researcher, Einar Braathen. By contrast, in Seville, attempts to involve users in the delivery of services as part of a wider move towards citizen participation have been resisted by trade unions.

The immediate catalyst for many of these experiments has been the outside threat of privatisation. But that does not mean they will forever be seen in that context. Norwegian and Swedish examples of worker involvement have become successful reform campaigns in their own right, despite their origins as defensive reactions to moves to break-up the public sector. 55 cities in Europe now practice some form of participatory budgeting. These ‘alternatives to privatisation’ are becoming true alternatives of their own, forging their own paths oblivious to the threat they were created to resist.