The collapse of Carillion has thrown open the door to Municipalism, but there is work to be done to make it a success

Photograph: Future site of the Library of Birmingham, from 2009, by Elliott Brown (License) (Cropped)

The collapse of government outsourcing giant Carillion has opened a door for critique of how the neoliberal approach to giving out services contracts to the private sector is handled - and mishandled.

With profits subsidised, companies mismanaged to threaten jobs and small businesses, and responsibility for pension funds all too frequently abdicated, that is to be expected.

But beneath and within that critique, is the opening of a much deeper line of thinking. It has opened an avenue for thinking up a new progressive direction - it has become a case study for assembling so far disparate thought and theories.

Voices from all across the progressive wing have been chipping in with pieces of a larger theme that's starting to take shape.

Jeremy Corbyn has followed Carillion - and the defeat of Clare Kober and her Public-Private development scheme - by launch a commitment to the renewal of municipal socialism. He has called for councils to bring services back in house and make regeneration about people first, not speculators.

on Newsnight, economist Mariana Mazzucato argued that Britain's outsourcing partnerships operate in a parasitic ecosystem, where profits are siphoned out of services, but the risk is left with the public. That we need to set out new terms, to define a what a good partnership looks like.

Meanwhile, writing a new column for Open Democracy, journalist Paul Mason began by talking about how neoliberalism had disassembled social mobility along with community. Mason acknowledged that nationalisation can't be done the way it used to be, but that neither can outsourcing. Central government needs to shape models and strategise, rather than dominate.

The example that people keep turning to, for a new model, is Preston. In the past few decades, Preston suffered through, ultimately failing, private-backed regeneration plans. After the failure, the council in Preston responded by doing something incredible.

Preston council tried to use it's own resources, and the funding tools at it's disposal, to stimulate it's own local economy - rather than trusting to more inward private investment and the precarious jobs it brings.

In part courtesy of the efforts of Michael Brown, the council used it's procurement budget to invest in local businesses, it supported local co-ops, and it fought off pop-up high street pay day lenders by backing a credit union.

In the era of government outsourcing giants going under - Carillion, and now Capita the latest to be fighting to not go the same way - rethinking how government budgets are spent, and who they subsidise, is a question that people are finally asking.

So what are these and other thrusts driving at?

Municipalism. A return to communities having an empowered stake in their own local government and local services. Co-operatives, small community-based businesses, community-owned water, energy, homes and rail. Restoring a sense of local purpose that might restore some sense of local hope.

The really interesting thing, though, is what comes next. If efforts to relocalise, to reestablish community, are successful, then influence, money and subsidy are going to be in the power of local municipal politicians. This is so much closer to putting power in people's hands.

But it isn't the end of the battle. Without oversight, without transparency and democratic accountability, local government can be - and at times, is - even harder to keep an eye on and hold to account. If we are going to realise the potential of local government, we need the democracy and oversight to match.

In simple terms, addressing that has two elements: the political and the journalistic.

For the political, reengagement is the first big task. Local election turnout is abysmal. There isn't really any other way to put it. Without people engaging and voting on local matters, there is no more empowerment locally than nationally.

Alongside the collapse in local community life, globalisation has also ushered in the near elimination of local journalism. Local newspapers - like the Coventry Telegraph, that once employed six hundred people - are long gone. The starting point for building oversight will be in finding a way to revitalising the local press.

These are just two starters on a list of issues to tackle. Of which, economically, 'hollowing out' may be among the largest. After decades of sending outside experience, it is no great surprise to find no expertise left inside - or the infrastructure needed to support it.

There is hope in municipalism. A real empowerment to be had. A chance for communities to rebuild, to recover their self-confidence. That has to be worth supporting. To achieve those ends, progressives of all stripes need to throw themselves into preparing the ground.

Carillion: When private service providers keep proving so inept and unethical, how can we be asked to back privatisation?

Photograph: Future site of the Library of Birmingham, from 2009, by Elliott Brown (License) (Cropped)

Carillion, a services behemoth, has collapsed. With it, it takes billions in government contracts and puts tens of thousands of jobs at risk. The construction and services company accrued £1.5bn in debt - of which £600m was owed to it's pension fund.

Fortunately, despite Carillion's own recklessness, the Pension Protection Fund (PPF) has stepped in to assure workers that their pensions will be protected - despite the complete failure of the company to meet it's commitments to workers.

However, numerous government projects, and smaller businesses to whom Carillion outsourced work, face an uncertain future. A result of what David Lammy described as, "privatise profits when things go well and nationalise risks so the taxpayer picks up the bill when things go wrong".

This government has tried to convince us of, or slip past us, a privatisations agenda, trusting private companies in the public sector. But how cane we back privatisation, when private sector providers keep proving so inept and unethical?

Carillion is not the only major private concern, even in the past year, to go bust and to do so revealing a massive pensions deficit - having taken profits for executive pay, but left workers' futures in peril, in what must surely be a major ethical breach.

When the steel industry nearly collapsed with the Tata Steel decision to close it's plants, workers' pensions were a huge block on a deal to save the industry. Incoming buyers did not want to take on responsibility for the pensions.

The unwillingness of private sector companies to take up their responsibilities in this case left workers with steel pensions in uncertain circumstances, where they have been prey to financial advice groups - now under investigation over their predatory behaviour.

The thing is, the government isn't just pushing privatisation for services, but for things like social insurance and pensions. It wants us all to do these things on personal, private terms, rather than in big collective government funds.

Yet, how can we trust the government's much vaunted workplace pensions scheme, when private companies treat workers' pensions as the first thing to drop when their isn't enough money for every commitment the company has made.

And what about Virgin? A global corporation that bitterly scraps for government contracts, even to the point of suing commissioners when they don't get them - suing parts of a cherished health service in financial distress. It was later awarded a huge contract, to much public outcry.

The government must now move to salvage what it can of Carillion, nationalising projects and departments to keep their vital work going and keep people employed. But what shape that takes is yet to be seen.

The speculation is that the government will continue to it's neoliberal trend of nationalising failure and debt, while returning the profitable parts to the private sector for executives to enjoy the benefits.

It would be refreshing to see something. Like the private sector picking up the tab for it's colossal failure? Yeah, right. Perhaps less fanciful would be consolidating parts of Carillion into a cooperative, run by it's workers?

As a cooperative, the still functional, still profitable parts could serve workers. The profits would deliver dividends for the workers, that would be of direct benefit their communities.

Whatever the government chooses to do, take note. This is one of those 'true colours' moments, where the rhetoric is paper transparently thin and the tropes are well known, enough to allow us to see what the governing party really values.