Outsourcing: Government Departments

Jon Trickett Excerpts

Wednesday 29th January 2025 Westminster Hall

[Jon Trickett (Normanton and Hemsworth) (Lab)]

I spent the last 10 years, under our two previous leaders, working on our outsourcing. It is hard to summarise 10 years’ work in three and a half minutes, but I came to the conclusion that outsourcing simply does not work for a number of reasons that I will outline quickly and in broad terms.

Let me first pay tribute to the workers who go to work one day to discover suddenly that their contract of employment has been sold to another employer—almost like a modern-day form of servitude. So often, we then see cuts to services, and pay and conditions. Much has been made of that already this morning. I pay tribute to those workers, particularly the three women in my constituency who went to work, found that their employer had changed, their union had been derecognised and their pensions removed. They fought like titans: they went on strike, then to a tribunal, and eventually finished up being sacked. The courage of working people fighting for justice should never be forgotten.

There are several things about outsourcing that simply do not work. The first is that no evidence whatsoever has ever been produced showing that it is cheaper to outsource than to keep services in house, especially when we count the transactional costs, which remain with the civil service and the Government. If we add those together, it always costs more to outsource. Secondly, when there is a disaster—as there is from time to time—the profits go to shareholders but the risks remain with the public sector, so we have the privatisation of profit but the socialisation of risk and quite often the cost of bankruptcy.

We have already talked about pay and conditions being driven down and about a two-tier workforce, so I will not go further into that, but I will speak a little about what my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) described as a shadow state. One third of all taxpayer money is now spent on outsourcing—a staggering amount of money—and that is a direct assault on our democratic processes. I say that because Ministers do not have day-to-day supervision of and responsibility for the actions of outsourced operations. That poses problems not just for democracy but for Parliament. It has become clear over time that questions that we Back Benchers are entitled to ask questions on behalf of our constituents and the nation simply cannot be answered because they relate to services provided by the private sector—that is a major assault. On Monday, I will have been an MP for 29 years—some will say that that is far too long—and in that time, Parliament’s capacity to ask questions about public services has been massively diminished as a result of what has happened.

My other point relates to freedom of information requests. We know that we as citizens can make freedom of information requests about any services provided by the public sector. The minute a service is outsourced, though, that capacity goes. Time and again, we encounter problems with services provided through taxpayer money but in a privatised form, and we are not able to get to the truth of what has really been happening with that service. The lack of accountability to Ministers and to Parliament, and the exemption from freedom of information, all make outsourcing very difficult.

I remember speaking to Dave Prentis, the then leader of Unison, about ethos. He said to me, “Look, Jon, it’s about ethos. The ethos of the private sector is largely driven by the desire to maximise shareholder value; the ethos of services provided in the public sector is just that—public service.” The difference between the two kinds of ethos is at the centre of the problem that we face when we deal with outsourcing.

I would love to speak longer about these matters on another occasion, but let me make my final point. I came to the conclusion that, in the end, the only way to deal with this is to have a legal presumption in favour of insourcing. That was the policy that the Labour party went on, and one that I hope this Government will build on by bringing forward the large wave of insourcing that we have talked about many times before.