Do our local employers adopt best practice principles when outsourcing their services?
UNISON recently commissioned the independent think tank ‘The Smith Institute’ to research the impact of contracting out public services on pay, terms and conditions. One of the five case studies used in the report features the West Sussex County Council/Capita partnership contract where approximately 600 staff were transferred.
Generally, the findings raise some important and deeply concerning issues for employers, contractors, agencies and policy-makers. These are:
- the lack of information about terms and conditions;
- the impact of cuts on outsourced, low-paid workers;
- the growth of two-tier workforces (and the widening gap between them);
- the impact of outsourcing on the quality of public services and the broader social effects (not least the public cost of failing to pay public-sector workers a decent wage).
UNISON West Sussex Branch Secretary Dan Sartin outlined three main concerns:
- the performance and impact of the contract is very difficult to assess because there’s little transparency over performance management, staffing and the paybill;
- staff directly employed by Capita do not benefit from the pension scheme transferred over with former WSCC employees; and
- it’s impossible to identify gender pay gaps or assess pay arrangements because there are so many, different sets of terms and conditions across the contract and no transparency afforded by Capita on these.
However, the report stated there was growing evidence of some public authorities building ‘fair employment’ into their procurement processes. For example, 20% of 173 major local authorities were committed to paying their staff the living wage, 7% required contractors to do so and a further 11% were considering this requirement from contractors. There was evidence of procurement being used to successfully improve pay and conditions for low-paid workers in the Greater London Authority and Islington.
The report found that examples of genuine service efficiencies following outsourcing were not prevalent, with the major effect appearing to be the reduction of terms and conditions of workers, particularly those already at the lowest end of the pay structure.
We’d encourage all UNISON members to read the report. It is clear that more research needs to be conducted in this important area of economic and social policy. To this end the West Sussex Branch Committee has voted to develop its own proposal for a research project and seek regional funding to support it.