Inequality, poverty and the privatization of essential services: A ‘systems of provision’ study of water, energy and local buses in the UK

Abstract

This paper is concerned with the distributional effects of the deregulation and privatization of essential services in Britain since the 1980s, based on a cross-sector study of water, energy and local bus transport. Our approach locates end users within the structures and processes, and prevailing narratives that underpin both production and consumption. This framework highlights the ways that the provisioning of these vital services is contested, contradictory and underpinned by power relations. We show that, at one end, investors in these sectors have made generous returns on their investments but their methods of profit maximization are often not in the public interest. Meanwhile these profits are financed by end users’ payments of bills and fares. Many lower-income households face challenges in terms of affording, and even accessing, these essential services. Regulation has failed to provide adequate social protection. We argue that adverse social outcomes emerge from systemic factors embedded in these modes of provision. A narrative of politically-neutral, technocratic solutions belies the underlying contested nature of privatized monopolistic shared essential services. Moreover, a policy preoccupation with markets and competition obscures the inequality embedded in the underlying structures and processes and undermines more collective and equitable forms of provisioning.