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The Private Finance Initiative

General Council Statement on the

Private Finance Initiative/Public Private Partnerships

John Monks (General Secretary), leading in on the General Council Statement and moving paragraph 5.15, said: President and Congress, there has already been a debate on PFI and public private partnerships and I will keep this short.

The statement that you have, I think, recognises that when PFI was first introduced the public finances were weak. We were running a big deficit. This was a way of getting extra money when the Government was strapped for cash. We know that that is no longer the case. As the Treasury Committee of the House of Commons has recognised, PFI can only be justified today if it delivers better value for money than conventional public investment. The evidence on that is patchy. The general rule seems to be that PFI costs seem to rise during the bidding process and the selection of PFI as an option is skewed by an unrealistic assessment of the costs of direct public provision.

There is also ‑ and it was certainly touched on strongly earlier ‑ the growing evidence that workers are seeing conditions of employment cut as a result of PFI. People being transferred into private sector employment, in particular, have been affected by this. Last year, the Government did make some significant improvements to worker protections and we have seen circumstances, for example, in Blackburn and Northumbria, where PFI deals do not involve any transfer of staff at all; that is the two hospital trusts there. Yet in Dudley, which Rodney told us about earlier, there is a transfer of staff involved which produced industrial action in response. If one hospital can do a PFI without transferring staff, why not another?

This leads us to the General Council's perspective on this, first, to challenge the value for money argument and, secondly, to ensure that if workers are to be transferred they are confident that their terms and conditions of employment are properly protected and can be passed on to the next generation and the next workers who join that area of employment.

I have mentioned the progress that has been made, but a lot more needs to be done to give comprehensive protection; stronger TUPE Regulations so that we are absolutely clear that they cover pensions; and, secondly, the re‑discovery of an old concept that was first established in British employment law way back in 1893 and repealed by the Conservatives, which is the old fair wages resolution. That basically said no private sector employee engaged on public contracts could be paid less favourable conditions than those covered by the relevant public sector agreement.

I regard that as a crucial test of our campaigning ability with the Government over the next period. It seems to me that that will give at least some protection and some security not just to the current generation of public sector workers but those in future who take up those jobs. Even deregulation in the United States has the equivalent of fair wages clauses in public contracts. If it is good enough for them, it is certainly good enough for the workers of Britain.

I believe that with the improvement in public services, with the development of the employment law programme that we are planning and this is touched on in the statement, we have the basis for both a campaign of opposition to PFI in the particular sectors ‑ many of which have been mentioned today, but also ensuring that people are properly protected where any changes are subsequently made.

Given the strength of our arguments and the justice of our case, Congress, I am confident that we can succeed in improving the lot of workers substantially in the face of this challenge of PFI. Support the General Council's statement. (Applause)

* The General Council's Statement was ADOPTED

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