External Private Contractors: Government Use and Employment

Justin Madders Excerpts

Wednesday 21st October 2020 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Mr Pritchard. I thank my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) for securing this debate on a really important issue. Outsourcing is a scam, an illusion, a con and an opportunity for jargon-filled management consultants to do a flashy presentation about how they can save a few quid from the bottom line, in the short term, at least. In the long run, the costs are high in lost expertise and lost capacity, and the biggest cost of all is for those long-suffering employees who end up on inferior terms and conditions, if they have a job at all.

Public and private sector companies alike have been seduced by the outsourcing mirage. The savings that are dangled in front of them are not cost-free or painless. In almost every situation, the majority of the savings come directly from the employees, either by paying them less or by having fewer of them. Of course, in theory, employees’ terms and conditions are protected under TUPE, but as an EU regulation it is now at the mercy of the Government, who could decide to water it down or get rid of it at any moment. TUPE does not need watering down; it needs strengthening. There are many ways that employers can evade TUPE protections, both in terms of dismissals and changing terms and conditions after a transfer—if they could not, a major incentive for outsourcing would be removed at a stroke.

Why would anyone want to give up sick pay, overtime rates or other benefits accrued over, say, 20 years of employment just because the name over the door has changed? Is not the loyalty of the employee who has given more than half their life worth more than a factual reference and a redundancy payment that might be able to buy them a second-hand car at the end of the situation? Employers may say that that is not what they want to happen, and that when they outsource employees, they do not want to see anyone suffering, but that is what happens all too often. Every time, that is because the original employer has washed their hands of the situation. They have outsourced their employees, and they have outsourced their legal obligations, but they have not outsourced their moral responsibilities, and they will know, from the moment the transfer takes place, that the clock is ticking.

Insecurity is baked into the workplace, and it is given rocket boosters by the outsourcing industry. It is little wonder that so many people feel a sense of helplessness. It does not have to be this way. Job security should be a basic right in a civilised society, but we see the outsourcing poison spreading everywhere at the moment. Often, the lowest-paid members of society suffer the most, being forced to give up hard-won terms and conditions, with little that can be done to challenge that.

Such are the warped priorities of this Government that that happens at the same time as the obscenity of contractors getting paid £7,000 a day to run the abysmal test and trace system. Never has the contrast been starker, and never has the need for change been greater. Let us use the power of public sector finances to be a force for good, let us keep things in the public sector, let us aim to be an exemplar in pay and conditions, and let us never give the private sector an excuse to justify driving down people’s wages.