External Private Contractors: Government Use and Employment

Mick Whitley Excerpts

Wednesday 21st October 2020 Westminster Hall

[Mick Whitley (Birkenhead) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I am delighted that my first contribution in Westminster Hall is to a debate secured by my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) on an issue that I care about deeply.

I declare an interest: for decades, I have been active in the Labour movement and it was my great privilege to have served for four years as regional secretary of Unite the union in the north-west. In that role, I represented thousands of outsourced workers right across the north-west, in sectors as diverse as manufacturing, care and catering. I saw at first hand how outsourcing has fostered a culture of low pay and insecure employment. Successive Governments have justified the race to the bottom on workers’ rights as a price worth paying for greater efficiency, flexibility and value for money for the taxpayer.

The Institute for Government reported last year, however, that a string of high-profile outsourcing failures had wasted millions of pounds, delivered poor services and undermined public trust. The collapse of Carillion in 2018 left the Royal Liverpool Hospital building years behind schedule, while the Government continued to award £660 million in public contracts to Interserve just months before it went into administration. In both cases, it was the taxpayer who was left footing the bill, and workers and service users suffered.

This devastating pandemic has truly laid bare the deep failings of outsourcing. This week, we learned that the Government’s outsourced Serco test and trace system has failed to track almost a quarter of a million people who have been in close contact with someone infected with covid-19. On the Wirral, just under 59% of people who have potentially been exposed to this terrible virus have been contacted in the last week. Instead of the world-beating system that the Prime Minister promised us, we have absolute chaos.

It is not just Serco test and trace that has made private companies an absolute fortune at a time when everyone else is making enormous sacrifices to win the war on this terrible disease. External providers have profited at every level of the Government’s response to covid-19. In fact, the British Medical Association has this month reported that the Government’s focus on external providers has left public facilities often underused and ignored. A vast range of companies have been paid to produce, store and distribute personal protective equipment, manage the logistics of drive-in testing and onboard returning healthcare workers into the NHS. That is despite the evidence showing that local public health teams are best placed to respond to this deadly virus.

The Government continue to shell out millions of pounds of taxpayers’ money to their friends in the private sector who simply cannot do the job. Meanwhile, the Chancellor has the audacity to say that the Government can afford to pay furloughed workers in my constituency only a measly two thirds of their wages, while quibbling over the expense of providing free school meals to vulnerable children during the holidays.

The Prime Minister has said that there are lessons to be learned from his handling of the covid-19 crisis. That is unusual for him and is quite an understatement. One of the clearest lessons of all the outsourcing is that it has been a failed project. As we face the worst economic crisis in recent history, we need more than ever to put social value at the heart of national and local procurement strategies. That means creating secure and well-paid jobs, improving employment rights and promoting ecologically sustainable developments. It means creating economic growth that feeds back into our communities, rather than just lining the pockets of a handful of shareholders. We can do all of this and more, but only if we stop handing millions to private companies and invest in the public sector.