Privatisation and shared services

Shared services are when one or more employers set up new organisations to make service delivery cheaper, for example by pooling resources to reduce overheads.

But solutions can turn into problems, promised benefits may not materialise, and often workers providing the services lose out.

Efficiency and economies of scale

Many schools, academies, colleges and universities are creating shared services to save money through so-called “economies of scale”.

Government changes in VAT rules made it easier to create shared services.

Often a new shared service will mean job losses, cuts in terms and conditions, and outsourcing.

Shared services may also be the first step towards mergers or the creation of clusters of institutions.

UNISON is committed to maintaining high-quality publicly run services as well as protecting staff who are outsourced.

We will campaign vigorously against any proposal to privatise services.

Services that are affected

Procurement, ICT, human resources, finance, security, buildings maintenance, catering and cleaning are the most usual shared services, but any of the services provided by UNISON members could be affected.

In England, more schools are becoming academies and paying private companies to provide services rather than the local authority.

Some colleges are setting up new limited companies or partnerships with private companies.

UNISON is concerned that the government’s real agenda is effectively to privatise further and higher education.

Aren’t shared services a good idea?

Efficient delivery of services is a good idea.

But shared services are an opportunity for private companies to move in and make a profit from taxpayers’ money that is diverted away from education into shareholders’ pockets.

And the only way a profit can be made is by cutting costs. That may mean cutting jobs, quality or staff terms and conditions.

Dangers to the workforce

Shared services often involve outsourcing, or possibly a TUPE transfer, meaning that pension rights may be under threat, and employers may be able to give new staff lower terms and conditions than existing staff.

Did you know?

Shared service centres in the civil service cost £1.4bn to set up, £500m over budget. Only £159m savings were achieved

After UNISON campaigned in October 2012 London Met University abandoned plans to transfer 235 staff to a shared service as part of a £74m deal

What you can do if you are affected by shared service arrangements

  • Talk to your colleagues and ask them to join the union.
  • Talk to your branch and ask for a branch meeting about how to tackle the introduction of shared services.
  • Volunteer to become a link person between your workplace and your branch where they are in different sites.
  • Find out more about campaigning and organising.

What you can do if you are a UNISON branch rep

Seek a meeting with your employers as soon as you hear anything about the introduction of shared services.

Raise questions about the issues that may affect staff, including:

  • job losses and redundancies due to rationalisation and restructuring;
  • changes to terms and conditions and TUPE protection;
  • secondments – if your employer proposes seconding instead of transferring staff to a shared service company immediately seek advice from your region;
  • possible relocation and travel costs;
  • eligibility to the Local Government Pension Scheme – both existing and new staff must have guaranteed access to the LGPS;
  • change in duties without review;
  • new employers seeking local or regional arrangements;
  • derecognition of unions;
  • threat to facility time;
  • blurring of different employers’ roles;
  • temporary and transitional arrangements like travel time and childcare;
  • equality impact assessments;
  • training for any new responsibilities.

Real stories

Dougie Deans, Angus College, Arbroath


The problem with the government’s regionalisation agenda is that it risks making a bad situation worse.


“Cuts in services are being added to damaging centralisation, which removes local access to study and training.

“In our area, we face a merger with Dundee College, which will mean some courses will only be available many miles away, increasing travel and childcare costs for already hard-pressed students, and damaging links with local schools.”

Audit Scotland reported that far from saving money, mergers had cost £54m.

Chris Greenshields, national further education committee


Where does the minister plan to find the £50m savings as a result of mergers? Is it from more job losses and cuts to key services for our students?


“Many services are either slower with opening times reduced or are not being delivered at all. These services are key to students choosing the correct course after appropriate guidance and then being able to survive the challenges of college life.

“Is he going to guarantee that student services won’t be worse off after mergers? The minister needs to explain where the savings will be found.”