Use of consultants and day-rate contractors in the Water Industry

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2018 Water, Environment & Transport Conference
27 February 2018

Conference notes that water and wastewater companies are increasingly using very expensive consultants and contractors – some on day-rates as high as £1,000 or more. This is especially prevalent in the run up to each five-yearly Price Review, the current one being towards PR19. The reasons given by the companies include:

a. the low number of people with the industry-specific or domain-specific expert knowledge needed to do particular “high powered” roles

b. permanent employees have failed in the past to deliver outputs that have adequately satisfied Ofwat and other industry regulators

c. the need for workforce flexibility – consultants and day-rate contractors can be hired and let go easily.

Conference also notes that consultants and day-rate contractors are highly unlikely to belong to a trade union, or to become fully engaged in the issues that UNISON branches and staff councils are concerned about. Often they do not even consider unions and other employee representatives as key stakeholders in the business plans and changes that they are hired to work on.

Conference further notes that wages for employees in the Water Sector who are covered by collective bargaining consistently fall behind the real rate of inflation, gradually eroding salary value. One factor in this is the need to pay excessive wages to others, within a fixed overall company budget. To pay for the contractors and consultants, the money that might otherwise be used to fairly reward collectively bargained Water Sector staff is taken away. Furthermore, this also:

i. Removes funds to train permanently employed staff to undertake this “consultancy”-level work.

ii. Lowers investment in human capital – any insight and experience gained by temporary staff leaves the business when they do

iii. The outputs generated – be they weighty reports or recommendations to the company executive team – are often never properly acted on or found to be almost worthless sometime after the consultants’ departure; the money spent is wasted.

Conference therefore believes that the way forward is for UNISON to engage with the executive leadership and HR departments of the water companies, and with industry regulators and politicians to turn this situation around.

Conference calls on the WET Service Group Executive to:

1. Through the Water Industry Sector Committee: identify the work being undertaken by contractors and consultants at each water company, and where possible find the purported reason for using these expensive temporary human resources – and to find if any internally staffed alternatives may have been considered.

2. Publish briefings to all Water Sector branches on the topics of (a) Bargaining for Improved Employee Training in the water industry, (b) Negotiating for the reduction in the use of consultants and day-rate contractors in the water industry in favour of permanent staff, (c) Model Organisational Change Policy and Strategy to ensure employee consultation and engagement.

3. Raise the need for permanent water industry employees to be adequately and regularly trained to ensure that they have the industry-specific knowledge and skills that water companies need with the water sector via the regular consultative meetings between WET officers and both Ofwat and CCWater – and at the open Board Meetings held by Ofwat. Emphasise that a five-year plan is needed so that many fewer consultants and day-rate contractors will be needed in the run up to PR24 in five years’ time.

4. Highlight these important issues in UNISON’s “Network? Magazine, the dedicated UNISON magazine for WET members, and on the WET pages of the UNISON website.