External Private Contractors: Government Use and Employment Debate

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Department: Cabinet Office

External Private Contractors: Government Use and Employment

Claudia Webbe Excerpts
Wednesday 21st October 2020

(3 years, 5 months ago)

Westminster Hall
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Claudia Webbe Portrait Claudia Webbe (Leicester East) (Ind)
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It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Liverpool, Wavertree (Paula Barker) on securing this important debate.

Many elements of the UK’s public services that have been central to the response to covid-19 have been outsourced in recent years. The NHS supply chain, which is responsible for delivering personal protective equipment, was privatised in 2006. Since the disastrous Health and Social Care Act 2012, NHS outsourcing and privatisation has been incentivised. In the last five years alone, private companies were handed £15 billion of NHS contracts.

According to research by We Own It, the Government are wasting as much as £10 billion a year on running an internal market in the NHS. Every penny spent on NHS privatisation and outsourcing is a penny less spent on patient care. The amount we spend on the internal market would be enough to pay for 72,000 nurses and 20,000 doctors. It is the same pattern of privatisation and deregulation that has decimated many of our essential services since the 1980s, across the transport, energy, water, mail and healthcare sectors. The British public tend to pay more for these services than similar European nations, simply to enrich shareholders.

During the coronavirus pandemic, outsourcing has increased at an alarming rate. After suspending commissioning rules, Government Ministers have awarded exclusive coronavirus-related state contracts worth more than £10 billion to private companies. We only have to look at examples such as Randox. The Government have also spent £12 billion on a failed test and trace programme, which prioritises the enrichment of private corporations over the protection of our communities.

Outsourcing does not just result in dangerously worse outcomes. As many trade unions, inducing Unite, PCS, Unison and others, have made clear, the incentivisation of outsourcing has a devastating impact on workers’ rights. Across the board, outsourcing has reduced wages, increased workloads, provided minimal sick pay, and delivered worse conditions and, in many cases, worker exploitation.

Following the return of full school opening, Unison has begun a campaign to get all private companies that deliver services in schools to pay full sick pay. I support that important campaign, and I call on the Government to extend sick pay and full working conditions to all workers, no matter their terms and conditions.

I will end on this. The pandemic has demonstrated that an over-dependence on the private sector weakens our national ability to act in a time of crisis. For the sake of public health, the Government must reassess their ideological commitment to outsourcing and privatisation.

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Julia Lopez Portrait Julia Lopez
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It is important to understand that the private sector has provided the framework for the system, with local authorities able to plug into that framework. The private sector provides the national call centres and so on, but a lot of the local expertise is provided at local level from healthcare experts on the ground, particularly in some of those harder-to-reach instances where we need to go knocking on people’s doors. Ultimately, we share the hon. Gentleman’s aim to improve the service and build plenty of public confidence in it because it is such a key tool in dealing with the pandemic.

The hon. Member for Stockport (Navendu Mishra) is a PCS union member, and I met his leader yesterday. It is important to remember that successive Governments of all colours use outsourcers. In a previous life, I was a councillor in Tower Hamlets. There were a number of outsourced contracts there and not very impressive in-house management of them, I should say. Outsourcers can provide a lot of expertise and capacity and it is naive to suggest that the public sector alone has all that capacity and expertise in house. Let us not do down some of the people who work for those contractors and bring a lot of capacity and sense to the system.

Both the hon. Member for Liverpool, Riverside (Kim Johnson) and the hon. Member for Leicester East (Claudia Webbe) seem to take an ideological view that effectively says private bad, public good. That is a great shame because it fails to acknowledge what the private sector can provide for public good.

Claudia Webbe Portrait Claudia Webbe
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Leicester has been in extended measures and lockdown for the longest time, as the Minister will appreciate. On the test and trace system alone, the private contractors delivering that have a success rate of less than 50%. Our own local authority, which understands the issues, was able to deliver a success rate of more than 85%. That is the difference between the private and the public sector. That is the reality. It is not ideological; it is the reality on the ground. That is what is happening and it is serious.

Julia Lopez Portrait Julia Lopez
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I thank the hon. Lady for her comments. Does she believe that the local authority in Leicester would be capable of delivering a fully functioning test-and-trace system that would do all that such a system needs to do? I think that is not the case. The private sector has been able to achieve impressive things during the pandemic and provide a lot of public good at speed and in innovative ways. That has been critical in procurement of all manner of goods and services, from PPE to new diagnostics, which have been fundamental to how we have protected the public.

The hon. Member for Luton South (Rachel Hopkins) raised a number about the justice system, but I am afraid that, as a Cabinet Office Minister, I do not have the expertise on some of the issues she raises. I am happy to look into them for her and reply in writing. The hon. Member for Ellesmere Port and Neston (Justin Madders) raised a number of issues on contractor pay. I am working on the very issue of value from contractors with my ministerial colleague, Lord Agnew. Some hon. Members may be aware that he has recently set out his concern about some of the reliance in Whitehall on management consultants and that we have infantilised civil servants and deprived some of our brightest public servants of

“opportunities to work on the most challenging, fulfilling and crunchy issues.”

Our reliance on consultants and other contractors can, at times, hinder the development of internal civil service capability. We have discussed that at length and are keen to improve what we do in terms of in-house learning capability and expertise.

I am always glad to see the hon. Member for Strangford (Jim Shannon) in this Chamber. He talked about civil service churn and skills, and I reassure him that we want to upskill our civil service. We are looking again at the quality of our training, as I mentioned, and he might be interested in the comprehensive Ditchley lecture given by my right hon. Friend the Member for Surrey Heath (Michael Gove), which talks about some of these issues.

There are many other issues to cover, but I am cognisant of the time. I reassure hon. Members that we need tighter controls around contractor expenditure, supported by better quality data and management information.