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Outsourcing - Five ways to fix it for working families

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With low-paid public service workers employed by Compass in the NHS  and Interserve at the Foreign Office taking strike action, outsourcing is back in the headlines today.

Both cases point to the unfairness faced by outsourced workers who are subjected to lower pay and worse conditions than the directly employed staff they work alongside. As Unison put it

The striking Compass staff have one simple demand – NHS pay rates and NHS working conditions

And while cost savings may have been made on the face value of the contract as a result, these costs are then managed by the contractor in ways that off-loads risk to others – through the suppression of wages, terms and conditions of the outsourced workforce, the use of insecure forms of employment in supply chains and the almost punitive treatment of sub-contractors.

Not only is this unfair to those workers, it is a false economy, leading to poor productivity, high levels of staff turnover and absence, less money for workers to spend in their local economies and more demand on in-work benefits.

This unsustainable and highly exploitative model of public service delivery must end.

Here’s five ways an incoming government could change things, for the benefit of working class families

  1. Ensure that public ownership and in-house provision is the default setting for public services, unless there a strong public interest case for putting services out to tender. Evidence from APSE suggests that public ownership provides better value for money, flexibility and innovation, support for the workforce and accountability to the public and the taxpayer.
  2. When services are outsourced, promote social value as a core component of procurement strategy – including a stronger focus on promoting employment standards and great jobs.
  3. Require all public service contractors to meet the ‘Seven Principles of Public Life’ and have the structures and arrangements in place to support this.
  4. Extend joint and several liability laws so that workers can bring claims for employment abuses, such as claims for unpaid wages and holiday pay, against any contractor in the supply chain above them.
  5. Strengthen trade union rights and promote collective bargaining by providing new rights for unions to access workplaces, simplifying the process for union recognition, broaden the scope of collective bargaining to cover a wider range of workplace issues and establish new bodies for bringing employers and unions together to negotiate across sectors.
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