Outsourcing: Government Departments

Gregory Campbell Excerpts

Wednesday 29th January 2025 Westminster Hall

[John McDonnell (Hayes and Harlington) (Ind)]

I have come to this debate because of our recent experiences of visiting picket lines, with regard both to Government Departments and, in particular, the railway sector. I have been a trade union rep in the public sector, but I have also been a manager in the public sector: I was chief executive of the Association of London Government and I also was in a London borough, managing large numbers of staff.

When you have the scale of disputes that we have, I think we have to recognise that there is an underlying industrial relations problem that has to be addressed. I would invite the Minister to join us on some of those picket lines over the coming weeks, because the disputes in the Government Departments are starting again next week and we will have picket lines for several Government Departments around Whitehall.

I have tried to identify the underlying problem causing these disputes, and when we talk to the workers themselves on the picket lines, it is strikingly obvious. Some of them—well, all the ones I have met—are on, I think, shocking levels of low pay. When you talk to them, particularly those based in London, you wonder how they are surviving on the pay that they are receiving. Also, they have conditions of work that I thought we had eradicated years ago. I am talking about lack of access to sick pay, some of them being paid below legal minimums at the moment, and many of them being without any pension rights whatever apart from the statutory pension. So we have a group of people who are on low pay, in insecure work, and feeling extremely exploited, so they have no other resort but to take industrial action. I want to point out what is interesting. I invite everyone to come on those picket lines and look around them, because the vast majority of those workers are from the BAME community; so there is also an issue with inequality in our employment practices as well.

Various unions have provided us with briefings for the debate today, and most of them have done surveys of their members to identify what is the issue facing their members that they should be putting to management. Some of the survey results are stark. The RMT did a survey, and I want to talk about the response that it had from its members. It has about 10,000 members who have been outsourced on trains; Transport for London, for cleaning, has 2,000; and Network Rail has 2,500. What happened then? In the survey results that came back, 80% of the workforce who had been outsourced were saying that they were struggling to meet their basic needs: to pay the rent, pay for food, and so on; 90% were worried about bills coming in. What was interesting was that more than 80% of them were saying, “We come to work when we’re sick, because we can’t take the time off—we can’t even afford to be sick.”

That is why the disputes are taking place, and they involve the same old companies: G4S, ISS, OCS and Mitie. These are companies that have made extensive profits out of the outsourcing, and the bulk of their profits is obviously made from the low pay that they are forcing upon their members of staff. It causes real anger among the workforce when they are seeing these companies paying out high dividends to shareholders, while at the same time they will not pay the staff a decent wage.

There needs to be an understanding in Government that if we are to have decent public services, there has to be a re-examination of how we provide those public services. I agree with what has been said by the deputy leader of our party, and by the Chancellor, which is that we need

“the biggest wave of insourcing…for a generation”,

because I think that is the way to tackle insecure work, low pay, and so on.

My hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) raised the other issue about outsourcing, which is that it has an impact on productivity. If a worker is exploited, if they are not paid properly, if they are worried at work about how they are going to survive, it does impact on how they deliver the service. That is inevitable; it would have an impact on all of us. As a result we have found that productivity issues are a real problem in some of these sectors. Unfortunately, because of the old Treasury Green Book model, that is resulting in even more outsourcing being justified: it becomes a vicious circle.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The right hon. Gentleman said that he fully agreed with the deputy leader of his party. I wonder whether there was an undue emphasis on the word “deputy” rather than “leader”.

[John McDonnell]

I am lost on that one—completely. There are conspiracy theories here that I have never even heard of or even thought of, so I will pass on that one.

What we are asking the Minister for today is a strategy. The first step in that strategy must be to meet the unions themselves. A number of unions have asked whether they can they have a meeting whereby, Department by Department, they can work with the Government, looking at what contracts there are, seeing how those contracts can be brought in in this biggest wave of insourcing in a generation, and how the legislation, particularly the Employment Rights Bill that is progressing through Parliament at the moment, can include the initiative and rights and responsibilities to bring that insourcing about. There is a strategy that can be developed alongside the Government’s procurement policy, that can address all these issues and will be cost-effective for the Government in the long term.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I thank the hon. Member for Middlesbrough and Thornaby East (Andy McDonald) for securing this debate. I do not say this lightly: he is truly a doughty champion—so I say well done.

The issue of outsourcing is a sticky one that I well remember from my days as an alderman on Ards council. My wife used to say, “If you’re looking for the alderman, you mean the older man.” She always called me the older man, not the alderman. She put me in my place manys a time.

I served on Ards borough council from 1985 to 2010, and I can well recall the financial arguments for and against outsourcing, and weighing the control we had against that which we would lose. I want to give a specific example that will, I hope, illustrate and support what the hon. Member for Middlesbrough and Thornaby East and other hon. Members have said.

Ards borough council decided to keep leisure in house when we created our new leisure centre, which is now called the Blair Mayne wellbeing and leisure complex, after the heroic SAS man who is portrayed in “SAS Rogue Heroes” every Sunday night at 9 pm or thereabouts. North Down borough council had outsourced its service, and when the councils were amalgamated, both outsourced and in-house services were being provided. The pros and cons of each option are easy to see, and yet it is hard to determine the best way forward. That example shows most effectively that we should never believe in a one-size-fits-all approach.

[Mr Gregory Campbell]

On the point of one size not fitting all, does my hon. Friend agree that we must look at the issue in a sensible, pragmatic way, and that neither a hyper-capitalist approach nor a radical socialist approach is the answer to these problems? We need a sensible, pragmatic approach that delivers good, effective services to the public while protecting the rights of those who work in those services.