Outsourcing and privatisation

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2013 National Delegate Conference
1 January 2013

Conference condemns moves by the coalition government to encourage greater use of outsourcing and privatisation in the delivery of public services. In doing so governments have ignored the impact of this US style approach which includes:

1) increased inequality in access and delivery of public services;

2) fragmentation of services, confusion for service users and loss of democratic accountability;

3) inefficient and exploitative contractual arrangements which retain risk with the public sector purse whilst allowing private companies to maximise profits at public expense;

4) contract failures which place vulnerable people at risk such as the Southern Cross Care Homes fiasco and the risk to public safety with the G4S debacle;

5) exploitative employment arrangements designed to undermine democratic rights to collective bargaining and employment protection;

6) the creation of a ‘sellers’ market allowing major corporations to suck up public service contracts with little or no effective challenge.

It is also noted that the US style model is reliant upon the ‘Big Society’ concept with patchy misuse of charities and third sector providers to prop up a failing model of public service delivery which leads to even greater inequality amongst the most deprived communities. Conference notes with regret the support for such models such ‘cooperative councils’ by some Labour led local councils and notes that such models are not an alternative to democratically accountable and properly funded public services.

Conference notes with alarm that the current outsourced market for public services in the UK already has an annual turnover of £82bn, representing around 24 per cent of the total spend on public services. In addition, Conference notes that this trend pervades all sectors of the economy, and impacts across all of our service groups.

Conference further notes that the business model that underpins outsourcing continues to deliver large profits, whilst at the same time threatening the ethos of collectively provided public services and driving down the pay and terms and conditions of those who devote their careers to delivering them.

However, against this backdrop conference is encouraged by a countervailing trend, in many cases driven forward by the campaign activities of UNISON members and their communities, demonstrating that not all of the traffic is one way. Large scale outsourcing plans at Edinburgh, Suffolk and Cornwall councils have unravelled over the last 18 months. In the West Midlands, Surrey, Hertfordshire, Bedfordshire and Cambridgeshire, police privatisation has been put on hold. A recent survey showed 80 out of 140 councils had brought services back in house, including refuse collection, recycling, street cleansing, housing management, cleaning, catering, grounds maintenance, IT and accountancy. Scotland, Wales and Northern Ireland have all seen hospital cleaning brought back in house over recent years.

Reasons cited by providers of public services for bringing services back in house have included the recognition that in-house provision can improve service quality and lead to better value for money. In the case of Islington council, a commitment to greater equality and better pay and conditions for workers is the driving force for insourcing.

Whilst we should welcome these examples, we should also recognise that, when seen alongside a determined coalition government drive to create ever more mutuals and attempts to encourage greater use of private sector shared services, we are operating in a public services landscape that is becoming ever more fragmented.

We are seeing a proliferation of providers, and ever more members and potential members in the private and community and voluntary sectors than ever before. One government estimate suggests that already by 2007 there were 1.2 million staff working for private and community and voluntary sector organisations providing public services.

This has implications for how we campaign as a union in the period ahead. Clearly we have to fight against further outsourcing and privatisation, as well as support campaigns to bring services back in house. We also need to make it apparent in campaign materials and political activity that we are on the side of those who deliver and rely on public services, regardless of provider.

As workforce, occupational and community champions, we are uniquely placed to perform this role. In a shifting landscape, UNISON represents continuity and durable values to both safeguard against ideological attacks on public services, and hold the people who make decisions about their scope, reach and character to account.

In practical terms this will require a redoubling of our efforts in the period ahead. Moves to introduce further privatisation within the police, whilst set back, have not been eliminated completely and the threat of a joint privatisation contract that would place 25% of total police funding into private hands in England and Wales is still present. The Coalition government also continues to pursue, at speed, the implementation of the Open Public Services white paper and the promotion of mutuals, ‘spun out’ from the public sector, as the future of public services. All of this against a backdrop in which contracts are increasingly being awarded to the large outsourcing giants, and the ability to enforce quality standards or respond to changing need is drastically reduced.

Conference also notes with concern government threats to privatise the fire service.

Conference notes that the Coalition’s overarching agenda is a deeply ideological attempt to reduce the size of the state and to replace collectivist responses to societal needs with a smaller, meaner settlement that risks damaging the breadth and quality of public service that our communities have access to. This damage will affect us all, but ultimately fall disproportionately on certain groups within our communities, including women, Black people, LGBT people, disabled people, young and older people.

Conference therefore calls upon the National Executive Council to:

a) continue to promote the value of public services as the best vehicle for service provision and as best value for money for the public purse;

b) encourage and support a forceful interpretation of the Social Value Act, that can help branches and regions to put pressure on those procuring services to consider labour standards and other non-cost criteria

c) continue to resist all attempts to outsource and privatise public services;

d) continue to ensure that our information data base on outsourcing firms is up to date and its resources are available to activists leading anti privatisation campaigns;

e) work with the Labour Link to seek commitments from the Labour Party that the first Parliamentary term of a Labour-led government would:

i) ratify ILO Convention 94;

ii) introduce a legislative framework that requires those procuring public services to:

A) consider an in-house option;

B) consider non-cost criteria including service quality, employment standards, tax compliance, impact on the local economy and the provision of apprenticeships.

f) work with UNISON Labour Link to engage and support a serious and intelligent debate about the future shape and development of public services based on a shared understanding of the vital role public services play;

g) encourage branches to get involved with community campaigns or to assist in setting up community campaigns against privatisation

h) highlight the loss to the public purse of private solutions based on extracting profit from services;

i) continue to provide every assistance necessary to branches and services involved in procurement to ensure that the efficiency and effectiveness of public sector solutions is highlighted and to encourage them to campaign for public alternatives.

j) campaign for a future public services manifesto that places at its core:

i) the retention of the founding principles of public services delivered by democratically accountable public sector providers funded by fair taxation;

ii) an end to the US style ill-conceived and unworkable concept of a public services market place which is de facto privatisation by stealth of all public services;

iii) new legislation to enforce those operating in the public sector are able to meet a social value test prior to contract award to ensure that every £1 of public money spent on public sector contracts contributes to:

A) skills and apprenticeships;

B) high quality employment including trade union organisation and collective bargaining;

C) continuous improvement in public services;

D) fair taxation with the ability for the public sector client to end a contract with any contractor found to be circumventing UK taxation;

E) a renewed recognition that regulation alone is not enough and the public sector needs to retain and develop its core capacity to deliver public services directly, including where contracts are placed with charities and third sector providers;

F) that the public and private economies are intrinsically link and that the public sector can be used as an effective economic tool to stimulate growth, jobs and skills and a move to a new green economy stimulating not just traditional public sector jobs but the creation of a new green manufacturing basis for the UK economy.

Conference welcomes the emergence of the ‘We Own It’ organisation which is campaigning nationally against privatisation and calls on the National Executive Council and regions to support ‘We Own It’ to enable this campaigning work to continue and develop in the lead up to the 2015 General Election to promote manifesto commitments which would:

I) require private companies running public services to be transparent about their performance data;

II) create a new ‘right to recall’ private companies when public service users are not happy with their performance;

III) ensure that procurement of public services always involves the creation of a realistic in-house bid, so that public sector performance can be compared to private company performance, in terms of customer satisfaction, environmental impact, wages and so on.