Mass privatisation and the changing nature of governance in the UK MIKe RACO
Introduction This chapter examines the rise of mass privatisation in the UK and its implications for the governance of the British welfare state. It argues that privatisation represents a core component of a broader modernist project of reform that seeks to deploy and extend new technologies of governance to meet increasingly complex economic, political, and social objectives. It claims that there are three elements to this project: First, it forms part of a wider shift in the paradigms of modern governance that emerged in the Thatcher period but have taken on a far more extensive character under the Third Way Labour governments of the 1990s and 2000s and now under the Coalition and the Cameron Conservative regime. Second, mass privatisation has gone hand-in-hand with the rise of what some authors have termed regulatory capitalism, in which major corporations now coproduce and manage ‘state’ assets and governance structures as a vehicle for the accumulation of financial capital (see Braithwaite 2008; Levi-Faur 2011). And third, privatisation has co-evolved with institutional reforms to the British civil service that have seen a shift to public management and growing Treasury control (see Clarke and Newman 2012). The chapter explores some of the wider implications of this modernist approach for the practices of the public sector and the politics of the welfare state. It argues that, on the one hand, we have seen the empowerment of elite public and private actors, working in increasingly hybrid relationships. Public services and assets have become financial objects that act as vehicles for investment returns and this is reshaping the state. On the other hand, as with all modernist projects, reforms have been subject to incompleteness, fallibility, and systematic (and unforeseen) limitations. The discussion concurs with the writings of authors such as Gadamer (1961) and Sayer (1992) and their powerful critiques of the limitations associated with modernist schools of thought and top-down, diachronic accounts of change. It analyses some of the uneven and incomplete geographies of privatisation across the UK, the limitations inherent in the finance-based models of privatisation that now exist, and the shifting contexts of market uncertainty that have a continual influence on the efficacy and viability of mass-privatisation models. What emerges is a process of coevolution
in which grand ambitions and agendas are continually subject to challenge, contestation, and reform. The chapter begins by discussing the emergence of mass-privatisation agendas and the mechanisms through which successive UK governments have sought to reshape the public sphere. It explores the specific modernist conceptions of governance that have framed reforms. A second section then assesses wider questions of how this situation has been brought into being and the mechanisms of mass privatisation that have been put in place. The example of the private finance initiative (PFI) is used to demonstrate both the wider logics of reform and some of the incompleteness and fallibilities of policy. The story of the PFI, it is argued, tells us much about the changing nature of governance in contemporary Britain and how projects of reform are in essence partial, limited, and subject to contestation. It has been subject to challenges at a variety of levels and these, as will be shown, have had an impact on its geographies and structure. The discussion also highlights the ambiguities involved in contemporary governance processes and the heroic efforts of the Treasury and government departments to respond to the economic and managerial fallibilities of the PFI programme, while simultaneously addressing the disruptive influences associated with the political demands of different groups and interests. Finally, the chapter assesses the political implications that mass privatisation has had for civil society interests who are faced with structural and increasing changes in the organisation and make-up of the public sector.