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Editorial Strikes show the need to end the outsourcing racket

THE strike by outsourced government workers taking place tomorrow and Wednesday at the business and justice ministries may not involve huge numbers, but sends a timely warning to ministers that they cannot keep trampling on the rights of the women and men who protect, cook for and clean up after them.

The simultaneous action by Civil Service union PCS and the non-TUC affiliated United Voices of the World focuses on workers’ campaign to be paid the living wage in one of the richest and most expensive cities on the planet. Like the synchronised strikes by Unite and BFAWU members at McDonald’s, TGI Friday’s and Wetherspoon last year, it indicates a growing militancy among precarious workers who are increasingly ready to fight bad bosses for a decent wage and union recognition.

Low-paid work on insecure contracts dominates the fast food, pub and hospitality industries and trade unions are beginning to make their mark in challenging this. But successive governments have allowed corporate culture to so far dominate the public sector that running the government itself is outsourced.

Differential treatment between directly and indirectly employed staff is obviously unfair. It is also classic divide-and-rule behaviour by bosses who seek to prevent solidarity and collective action by their workforces. PCS’s dispute is with the contractors underpaying its members, Aramark and Engie, not the ministries themselves: but general secretary Mark Serwotka is right to point to the need to bring all outsourced workers back in house as the union’s longer-term goal.

Outsourcing is touted by Tories as more efficient than direct employment. Bosses’ organisation the Confederation of British Industry (CBI) egged on the David Cameron administration to transfer more and more of its workers to other employers, claiming in a pugnacious 2012 report that shunting contracts to the private sector could save the government £23 billion and lamenting the persistence of public-sector employment in fields such as school catering, prison management and social housing management. 

Unions weren’t fooled at the time — Unison’s Dave Prentis noted that the report’s figures were “plucked from thin air” — and the years since have shown up the reality: that outsourcing actually costs the public more than employing public servants directly does. The public accounts committee found in 2016 that a scheme sold on a pledge to save £400 million a year by outsourcing back office functions in government departments had failed to recoup its initial investment costs. 

And an economy that has seen the collapse of outsourcing giant Carillion, leaving the taxpayer to pick up the tab, and the flagrant cheating of the taxpayer by Serco and G4S should call time on what is simply an expensive racket. Private-sector firms, unlike public services, exist to make a profit. The only reason a private company bids for a public service is to take money out of it.

That not only means privatised services cost more than publicly owned ones but that contractors have an automatic interest in treating workers poorly. The result is clear in the denial of sick and holiday pay and failure to pay the London Living Wage at the Ministry of Justice and business department.

Expecting the Conservatives to learn from this would be foolish. The CBI’s enthusiasm for outsourcing was not based on saving the public money but on swelling the profits of companies invited to feast on our public services. The Tories’ addiction to outsourcing is as much about stuffing the mouths of their friends with gold as it is about ideology.

Fortunately, as shadow justice secretary Richard Burgon’s pledge to visit the picket lines demonstrates, Labour is prepared to call time on the extortionate mess. Jeremy Corbyn has vowed to tear up procurement rules and make the public sector the default choice for delivering public services. Strikes like today’s show how necessary that is.

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