Towards inclusive service delivery through social investment in Flanders. An analysis of five sectors, with a particular focus on water provision

Is Belgium (and Flanders in particular) a ‘social investment state’?

Belgium is a solid welfare state, with moderate income inequality and generous social expenditure. Never­theless, due to the ‘conservative-corporatist’ tradition, many services of general interest are actually provided either by local authorities, or by private (mainly not-for-profit) stakeholders, with government subsidies. This has probably led to a better match between the quality of services and the needs of consumers, but also to cream-skimming (e.g. in childcare), exclusion of households that are unable to pay (e.g. in financial services or water provision), shortages (e.g. in housing), and Matthew effects (mainly in housing, but actually in nearly all services). Government intervention has definitely ironed out the worst inequalities (e.g. in water provision or health care) but has never been very proactive in guaranteeing citizens’ rights (e.g. through social minimum standards) by law.

In the past decades, the redistributive capacity of social protection has come under serious strain since the 1980s: social security benefits have been lagging behind the general welfare trend, resulting in an increasing gap between working and non-working households. Furthermore, since the crisis of 2008, cut­backs have been imposed in nearly all sectors of public expenditure (including the five sectors examined in this report). As one of the most prosperous regions of Europe - and one of the least affected by the crisis, Flanders has been able to continue investing in the last decade (e.g. in water purification, extension of child­care provision and to some extent also social housing). However, the emphasis was put on economic motives (for childcare) and environmental sustainability (housing and water) rather than equity, as the investments went hand in hand with price increases and cutbacks in social tariffs.

In addition to the reduced volume of social investment, the latest (right-wing) government is also sys­tematically re-introducing (quasi-)market principles: free-of-charge packages of energy and water were abol­ished; prices or co-payments were raised in childcare, health care, education; more and more social services are being outsourced through competitive tendering, while the subsidies to accredited non-profit providers were reduced or discontinued.

‘Social disinvestment’ has also been very outspoken in the socio-cultural sector and subsidies to civil society organisations as well as unions. In this area, cutbacks were informed by ideological rather than eco­nomic motives: the influence of unions, health insurance companies, welfare organisations etc. has been systematically undermined and their subsidies reduced. Indirectly, this has weakened the capacity for service provision as well as the role of these organisations in advocacy for the rights of their clients.

The case study of (domestic) water provision

The bulk of this report is devoted to an in-depth case study of water provision, conducted mainly in collabo­ration with Samenlevingsopbouw Vlaanderen, which led to the following key insights:

Water provision has a ‘social investment’ character mainly for two reasons: firstly, because access to water is a human right that needs to be guaranteed to all citizens, irrespective of their socio-economic situa­tion; and secondly, because clean water is essential for public health. Hence, there is undoubtedly a social return on investment, and thus reason for public intervention for the benefit of all citizens, with a particular focus on socio-economically disadvantaged households. Whereas the estimates of the proportion of ‘water-poor’ households in Flanders vary between 0.6 and 10.8% (depending on the threshold used), the rate of default payment in 2015 was 6.7%, and 4,000 households in Flanders were disconnected from water provi­sion - enough reason for further measures to combat the problem.

It is important to bear in mind that water poverty is not confined to a financial problem: households faced with water poverty adapt their behaviour to lower hygienic standards, thus putting at risk their own health as well as that of their children and environment. They wash themselves less, flush their toilet less often, recycle the bath water for the dishes etc. Disconnection from water provision is often hidden out of shame, which adds a social dimension to water poverty. These examples illustrate that water poverty affects the capabilities of vulnerable people in various areas of their daily life.

There is of course a set of legal and policy measures to protect such households from extreme hardship. The experience of our co-researchers gathered by the Combat Poverty Service and Samenlevingsopbouw Vlaanderen revealed the progress made as well as the limitations of these measures:[1]

• Following negotiation with Samenlevingsopbouw and a poverty impact assessment, a social tariff was re-introduced (80% discount). Unfortunately, it applies to a very limited number of households only. The NGO-sector advocates an extension of the measure to all households at risk of poverty, or to those covered by the social energy fund.
• Disconnections are forbidden by law unless they are approved by Local Advisory Committees (LACs) that gather representatives of the water companies and municipal Public Centres for Social Welfare. Striking a balance between the economic and social interests in the decisions of these LACs is not an easy task. For example, community workers have a hard time obtaining the right for clients to be heard by the LAC, as well as empowering them to use this right. The practices of LACs diverge a lot across municipalities and lead to unequal treatment of clients. And once decisions are taken, there is no right to appeal. Instauring an appeal procedure is one of the priority claims on the NGOs’ agenda.
• Other measures aim to enhance the ‘social accountability’ of water companies and LACs. Through yearly report­ing on social issues to the Flemish Water Agency, they are supposed to take social objectives on board in their daily management. Samenlevingsopbouw Vlaanderen has drafted a ‘guide to good practice’ after a long period of participative observation and negotiation in the LACs. This tool is now being actively disseminated through the internet and specific training sessions. For example, water companies can offer a range of services to households that are facing difficulties: a free water consumption scan, advice on how to raise the ‘water efficiency’ of bathrooms and machines, etc. The guide also emphasises that the quality of the service (water provision) should not be limited to technical, environmental and health quality: equally important is the quality of the communication between water companies and their clients. This communication needs to be transparent, respectful and supportive.
• The advocacy work done by the Combat Poverty Agency and Samenlevingsopbouw, in collaboration with many other grassroots organisations as well as other stakeholders, demonstrates the importance of civil society organisations in building a constructive dialogue on such a vital service as water provision. It shows that public support to civil society organisations is in itself a key area for social investment.

Lessons for the future: the social investment agenda in water provision

For the future policy agenda in Flanders as well as in other regions of the EU, the following recommenda­tions emerge from this analysis:

1. Reinforce the right to water and sanitation: inclusion of the right in the Constitution, safeguard the public character of water provision at national and international level, provision of public water points and sanitation in every municipality, collect data concerning situations where people do not have access to water and sanitation.
2. At European level, by way of EU law, access to water and sanitation should be explicitly recognised as a human right and be protected as a public good that must be delivered at affordable prices to all citizens. This not only means that provision of water should never be subject to liberalisation, but also that internal market and competition rules should not apply to the provision of this public good.
3. Strengthen the rights of consumers by organising concertation between different actors, increasing accessibility of water companies (accessible offices, free telephone numbers, contact persons, ...), use uniform, trans­parent and readable bills, develop a binding concept of ‘reasonable payment’, provide sufficient infor­mation and guidance (local energy, water and housing desks, regional information services, pay attention to illiteracy and the digital divide).
4. Put into practice a tariff system that obeys social, solidary and ecological criteria: ensure that water bills are affordable, extend the status of privileged client to cover more people who risk water poverty, expand the group enjoying social tariffs, create a social fund to give support in cases of payment difficulties, examine the financing of public service obligations.
5. Handle payment difficulties through dialogue, with full respect for the clients’ rights: foresee a minimum service delivery, ensure flexibility in payment plans, reinforce the legal position of clients in procedures through appeal procedures, reinforce quality of functioning of LACs by promoting the mediating and supportive role of LACs, exchange of best practices and better outreach methods for vulnerable people, reinforce the position of client in cases of transfer of debt.
6. Reinforce the policy of rational water consumption for families living in poverty or insecurity: through well-conceived campaigns, promote water scans, creation of local energy, water and housing desks, establishing a strong link between housing policy and rational energy and water consumption.

[1]   The measures discussed here were selected as the most important ones.