How does the privatisation and outsourcing of public services in Europe impact on performance and employment? How have Private Public Partnerships (PPPs) affected the working conditions for those employed in this sector? What alternatives are being developed?

The liberalisation and privatisation of public sector activities has been one of the main political projects of the European Union since the 1990s. The ‘economic’ effects in terms of productivity, prices and quality remain unproven but in terms of employment, liberalisation and privatisation has clearly led to job losses and a decline in wages and conditions especially as far as newly-hired workers, the lower qualified and women are concerned.

Liberalisation and privatisation have in various forms impacted on the organisation of public services. Public service companies have responded to new regulation, increasing cost pressure and growing profit expectations by the transformation of service units into independent subsidies, outsourcing and by the use of private-public partnerships (PPPs). Notwithstanding regulatory requirements, a major driver behind the reorganisation is a flight from the traditionally high labour standards provided by public sector collective agreements.

The quality and efficiency of public services depends on the workers delivering those services. The impact of PPPs and liberalisation on workers thus also has a negative impact on the public service concerned, as it affects workers’ motivation, and limits the resources spent on service provision. This concerns everybody, as well as workers themselves.

Unions and other organisations in many European Union countries are developing ways of improving and strengthening the role of public services. These initiatives focus on:

• strengthening democratic processes, through public participation; increasing the potential for worker participation;
• improving the quality of services, for example through progressive procurement policies; and
• strengthening the role of public ownership and public finance.

Such initiatives often involve the development of ideas and arguments to counter the ideology of privatisation and PPPs, as part of a strategy to win greater public support for better, more accountable public services. They are alternatives to the widespread ideology which favours the introduction of the private sector, or private sector management techniques, into public services.

For the ETUI’s November Monthly Forum David Hall (from the Public Services International Research Unit) and Christoph Hermann (from the Working Lives Research Centre, Vienna) will outline some of the lessons learned when tackling the need to protect workers and services from privatisation and outsourcing.
The presentations will draw on current research from PSIRU and on a series of company case studies carried out in the Privatisation of Public Services and the Impact of Employment, Quality and Productivity (PIQUE) Project.

Information resources:

• The European Trade Union Institute (ETUI) will shortly publish a new book on the issue of public services, entitled “Privatisation and liberalisation of public services in Europe: an analysis of economic and labour market impacts”. It analyses the effects of liberalisation and privatisation on productivity and service provision, employment, wages and working conditions in a number of European countries. Full details will appear shortly on the ETUI website.
• A recent issue of Transfer (02/2008 Public Services in Transition), the ETUI’s European Review of labour and research, also analyses the main forces driving the privatisation of public services. The articles discuss the processes of privatisation and the consequences for the trade union movement and industrial relations while also analysing the wider impact the process has on citizenship and democracy. Click here for more details.
• Dave Hall’s Summary Paper on PPPs
• The PIQUE newsletter. The PIQUE Newsletter is published to accompany the major steps of the PIQUE project and offers information on the PIQUE research, project news, events and publications. The European research project PIQUE investigates the relationship between employment, productivity and the quality of public services in the process of liberalisation and privatisation. Click here for more details.