External Private Contractors: Government Use and Employment

Helen Hayes Excerpts

Wednesday 21st October 2020 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) on securing this important debate and on her powerful speech, which set up the multiplicity of ways in which outsourcing is failing workers on pay, terms and conditions, job security, and health and safety.

The devastating impact of these failings was illustrated in many contributions, including those from my hon. Friends the Members for Birkenhead (Mick Whitley), for Leeds North West (Alex Sobel), for Liverpool, Riverside (Kim Johnson) and for Ellesmere Port and Neston (Justin Madders), and from the hon. Members for Leicester East (Claudia Webbe) and for Strangford (Jim Shannon). My hon. Friend the Member for Stockport (Navendu Mishra) shared an example from his constituency of outsourced workers in relation to universal credit and being subject to exploitative practices. My hon. Friend the Member for Luton South (Rachel Hopkins) shared the example of staff at Her Majesty’s Courts and Tribunals Service who were outsourced, only to find themselves made redundant. There were many other examples, and I thank all hon. Members who contributed to the debate.



The coronavirus pandemic has shone a bright light on the Government’s broken model of outsourcing. It has exposed the grotesque inequality of terms and conditions of employees working side by side in the same Departments—civil servants able to self-isolate on full sick pay, while outsourced cleaners or security staff face an impossible choice between coming to work with symptoms or being unable to pay their bills. There is cruelty and stupidity in that approach, in equal measure. It is terrible for workers and extremely risky for infection control. It has exposed the Government’s dependence on a small number of private firms to deliver vital public services, often with no clear evidence of their ability to do so competently, creating multiple layers of risk, both for staff and for those who rely on the services those firms are contracted to deliver.

Outsourced workers have been an integral part of the frontline during the coronavirus pandemic. Thousands are in roles such as cleaning, security and facilities management. Those jobs cannot be done on Zoom. Those workers have continued to travel to work on public transport, spending their shifts in contact with other workers or surfaces that have been touched by many other hands. Often, they are disproportionately from black, Asian and minority ethnic backgrounds: BAME workers make up 16% and 26% of cleaners and security guards, respectively, compared with 12% of the wider workforce. They are key workers, those same key workers the Government clapped on Thursday evenings earlier in the year. They have faced multiple risks to do their essential work, yet they have been left to fall through the cracks in the protections from which others who work in public service benefit.

The major driver for outsourcing is cost reduction. Studies have shown that all too often it leads to a deterioration in pay, terms and conditions for the workforce, including insecure contracts and a loss of access to benefits, such as pensions and sick pay. That approach is being applied across many different areas of public services. Unite, Unison, the GMB and the Public and Commercial Services Union all have harrowing examples—too many to set out in detail in the time available today—in which Tory austerity is paid for at the expense of the mental, physical and financial wellbeing of outsourced workers in Government Departments, local authorities and the NHS.

Yet the Government’s failing outsource model is simply not delivering. That failure is illustrated most starkly today in the Serco and Sitel track and trace contract, a shocking example of the Tory instinct to outsource overriding all the evidence that local authorities are best placed to deliver a service that involves the day-to-day investigation of contact between people in specific geographical communities. The Government spent more than £10 billion on a contract that has been subcontracted to 29 different unnamed companies, creating a completely unaccountable tangle, and it seems that they are committed to even more of the same.

In 2017, Carillion collapsed in an outsourcing scandal of national proportions. It became clear that Carillion had built a house of cards, with undeliverable contract stacked on undeliverable contract, and a huge web of smaller firms entirely dependent on it. Seven hundred and eighty firms went into liquidation as a consequence of the collapse of Carillion, and more than 3,000 people lost their jobs. My hon. Friend the Member for Leeds West (Rachel Reeves) led the investigation into Carillion as Chair of the Select Committee on Business, Energy and Industrial Strategy, and Labour is committed to implementing the lessons of that sorry tale—it is beyond comprehension that the Government are not.

Instead, it would appear that the Government are now content for the two largest Government contractors, Interserve and Mitie, to merge. The merger would create the UK’s largest facilities management company, with almost 80,000 employees, yet both companies have had financial problems in recent years, both have a poor history of industrial relations and, since they are competitors, the merger is a back-door route to obtain contracts that they were previously not considered good enough to be awarded.

In conclusion, I ask the Minister what assessment she has made of the impact of the proposed merger of Interserve and Mitie on employee terms and conditions, on redundancies, and on the quality of services that will be delivered. What assessment has she made of the social value that the merger will bring? What evidence has she seen to give confidence that this is not another Carillion waiting to happen? What discussions has she had with trade unions on the disparity in terms and conditions for outsourced workers in Government buildings and frontline public services during the coronavirus pandemic? Does she know, and will she name, the 29 companies delivering track and trace services for Serco? If not, why not? Finally, and most importantly, what is her message to outsourced key workers on Government contracts, supporting and delivering vital public services, who are fearful today about the safety of their workplace or their journey to work, and are worried that if they develop coronavirus symptoms and have to self-isolate, they will have to choose between the health and safety of their colleagues and the wider public, or their ability to put food on the table?