Economic Crisis and Public Services

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2009 National Delegate Conference
29 May 2009

As the economic crisis deepens, workers, their families and communities face unprecedented challenges.

Hundreds of thousands of jobs will be lost, bringing unemployment to 3.1m based on International Labour Organisation (ILO) method of calculation. 75,000 home repossessions are expected in 2009, on top of 45,000 in 2008

Conference notes that for young members this will be their first experience of major economic problems. Previous recessions caused significant problems for young people, particularly youth unemployment. As family incomes are hit by the recession young people in education and training will be under increasing pressure to help support their families. This will be especially true for apprentices, as we know that already a big reason for not completing an apprenticeship is the need for better paying work. Not only will this disadvantage these young people, it will further jeopardise the government’s plans for apprenticeships. Young people also struggle to get housing, from the social rented sector to first time buyers. For those on housing benefit, under 25’s are directly discriminated against as they can only get benefit for a single room.

Tens of thousands of jobs are at risk in local councils and the government’s pre budget report states spending plans for 2011 onwards have been cut and the emphasis on efficiencies, commissioning and procurement, privatisation and pay restraint are to be increased. Three in four councils have had to make additional cuts as a result of the credit crunch, and the finances of NHS Trusts, Housing Associations and voluntary organisations have also been hit. Community and voluntary organisations are also shedding jobs. Workers in outsourced services such as childcare, eldercare, cleaning, catering etc are particularly vulnerable due to weaker union protection and pervasive casualisation. There is the threat of widening inequality and that the equalities agenda is sidelined. Low pay increases are set to continue and public sector pensions are again under scrutiny and will be subject to further attacks.

An even more vicious Conservative Government is waiting in the wings and the British National Party (BNP) is gaining support as they exploit the recession, seek scapegoats and spread hate and division in our communities.

Conference rejects any attempt to divide workers in the face of the drastic impact of the recession on ordinary people’s lives. In particular we reject the growing attempt to divide public and private sector workers and the use of potentially dangerous slogans like British Jobs for British Workers.

The roots of the current recession are in the crisis in the financial system and Conference condemns the greed and irresponsibility of the privileged minority who chased excessive profits at the expense of jobs, industry and services.

But Conference believes that condemnation it not a sufficient response to a recession that none can predict ending soon. Not when the economy is contracting, homes are being repossessed and workers are being made redundant daily.

The neo liberal era has ended in failure and now is the time for bold action and conference agrees UNISON should be at the forefront in developing and promoting a programme for recovery based on principles of social justice and equality and which protects the vulnerable and recognises the vital role of public services.

Conference, therefore, wants to set out the important role public services have to play, not only in reviving the economy and tackling social need, but also in building a fairer society for the future. We, therefore, welcome the National Executive Council’s economic statement in October 2008 that set down the framework and also welcomes the ‘Putting you first’ pamphlet in 2009 that laid down a policy programme for a fairer society.

Public services are playing a vital role in supporting the unemployed, the sick, the homeless, those in debt and those in need of welfare advice, and re-training those who need new skills. They are the safety net we cannot do without. The government needs to promote the vital role of public services in getting through the recession and in achieving an upturn.

Conference notes government action to date to bring forward investment, guarantee loans, support demand and expand skills training. However it is increasingly apparent that these measures have been insufficient to prevent a major fall in output and employment. We note in particular the fact that any moves to stimulate the economy have been significantly undermined by job losses in local authorities and other areas of public service, and by the government’s reliance on the private sector for investment in new housing, schools, health facilities and other capital projects.

Conference believes that the government should ignore the Governor of the Bank of England and embark on an expansive public spending programme to stabilise the economy, save jobs, boost demand and invest in vital public services.

As part of a broader investment in public services the government needs to invest in training and education which develops young people for the long term and improves the skills they need to help get a job. UNISON should continue supporting apprenticeships where appropriate within our employers to bring in unemployed young workers.

Conference believes public service jobs are good for the economy. Public service workers’ pay is taxed and also reduces the need to pay out benefits and tax credits. Research shows that for every pound spent on local service delivery, an additional 64 pence is reinvested in the local economy, helping local businesses and supporting regeneration. Women, minorities, and people with disabilities are particularly reliant on public sector employers with progressive policies on flexible working and equal opportunities. The Work Foundation says that “for some cities and regions public sector employment will play a very important stabilising role in the downturn. Reductions in public expenditure would have a procyclical effect and will make it more difficult for these cities to weather the economic storm”. The expansion of public services has been a key factor behind the increase In the UK’s overall employment rate since the 1990s.

This crisis marks the culmination of a neo-liberal era in which deregulation, privatisation, financialisation, tax-cutting and tax-evasion have resulted in an unprecedented widening of inequality, and the undermining of institutions needed to protect the public interest and advance collective social goals. Since the beginning of the 1980s the richest one per cent of the UK population doubled their share of total income to more than 13 per cent, while the number of children living below the poverty line increased from one in ten to almost one in three. Public services have been squeezed, with total government spending cut from almost 50 per cent of national income to around 40 per cent, despite growing social need. Democratic processes and mechanisms of accountability have been weakened by the overwhelming power and influence of private wealth. Although some progress has been made over the past decade towards halting some of these trends, we are still a long way from reversing them.

Conference believes that in future there must be greater public service role to tackle social need, ensure fairness and equality, and develop the economy, as too much has been left to the market for too long. The crisis in our financial system – upon which our