Nationalisation of public services could save £13billion every year

Public ownership of rail, water, energy, buses, Royal Mail, broadband and the NHS would save the UK nearly £13billion every year, a study has found.

And the money saved could be ploughed into improving public services, creating jobs, boosting local economies and delivering green policies, according the anti-privatisation group We Own It.

Research based on studies by Greenwich University in south east London, the Transport for Quality of Life and the Centre for Health and the Public Interest, has helped the group pinpoint savings to pay for a “public services upgrade.”

It found:

• Public ownership of the railways will save £1billion a year, enough to pay for 100 miles of new railway track a year.
• Nationalising water firms will save £2.5billion a year, enough to reduce leakage levels by a third in one year.

• Public ownership of energy networks would save £3.7billion a year, which could pay for 222 new offshore wind turbines a year.
• Public ownership of buses will save £506million a year, which could pay for 1,356 new electric buses.
• Public ownership of the Royal Mail will save £171million a year, enough to open 342 new Crown Post Offices with postbanks in towns across the country.
• Publicly owned broadband will save £500million a year. This is enough to pay for full fibre broadband for six million households.
• Ending the internal market in the NHS would save at least £4.5billion. This could pay for 72,000 nurses and 20,000 doctors.

The savings are calculated by comparing the current cost of dividends and interest paid by the private companies with the cost of refinancing the current equity and debt with debt raised by issuing government bonds.

Professor David Hall, Director of the Public Services International Research Unit (PSIR) at Greenwich University, said: “Based on intensive empirical research, this paper shows that public ownership of utilities would result in annual savings of just under £8billion – so nationalisation would pay for itself in less than seven years.

“Nationalisation would cost less than £50billion if shareholders are compensated for the amount they have actually invested, rather than costing the country nearly £200billion as claimed by the CBI last month.

“UK law does not require that they be paid the ‘market value’, and it is up to parliament to decide on a case by case basis the appropriate amount of compensation.”

Cat Hobbs, Director of We Own It, added: “Austerity and privatisation have failed – it’s time to upgrade our public services for the 21st century.

“This research shows just what is at stake in this election – what public ownership can deliver for our economy and the planet.

“Wasting public money on shareholders is a scandal. By ending it, we can free up investment to deliver a better deal for our communities and the climate.

“Public ownership can pay for the new green infrastructure we need – like upgrading our water pipes, investing in new wind power and installing full fibre broadband across the country.

“And it can help give communities what they need – vital services like new buses, post offices and of course doctors and nurses for our NHS.”