As the European Parliament debates changes to the EU’s public procurement rules, the experts warn against adding red tape for municipalities and argue that towns and regions should be free to bring services back in-house when it makes sense to do so.

PSI and EPSU worked together to prepare and disseminate the joint statement, with more than 100 professors and academics from 18 countries and over 50 different universities, institutes and research centers calling on legislators to ensure that in-house provision is protected by the current parliament. Some MEPs with a far-right background have been promoting what is usually called ‘competitive compulsive tendering’, echoing old proposals by the British Thatcherite right.

The proposed amendment 13c would further go against the proposals voted by the Parliament’s Committee on Employment. This amendment (13c) to the IMCO report goes against academic evidence about in-house provision and insourcing in public services. The proposal would undermine the democratic right of elected municipalities throughout Europe to decide on the form of public service provision they want for the people, a right embedded in article 345 of Treaty on the Functioning of the EU. It would introduce a system of compulsory competitive tendering and increase the load for procurers. The amendment goes against the simplification objective of the proposed revision.

The current wording of article 13c would create an extra burden on local and regional governments to prove why they are not handing services provided by local and regional authorities to the market. This will not simplify the internal procedures of a sector that is already under strain.

This system was abandoned even in the UK 30 years ago, and multiple studies (see here, here, here, here and here – to cite just a few) have shown that concessions and outsourced contracts provide no efficiency gains. Rather they act as a drain on public finances by the extraction of profits; impose inflexible barriers to policy innovations; undermine service quality; erode public employment and capacity; and create incentives for corruption and cartels. There is now a well-established trend across Europe to remunicipalise such contracts, making savings for public finance and improving services.

If the proposal becomes law, it will endanger stable and secure jobs. Cleaners, security guards, carers, water and waste workers and many others are threatened with outsourcing and privatisation. Hundreds of thousands of jobs would become precarious with lower wages and pensions. The benefits will not go to the public authorities, instead disappearing in pay-outs to CEOs and shareholders. 

Click here to see the appeal and add your name.

Click here to see the list of signatories.