Public sector outsourcing and class warfare

Public sector outsourcing and class warfare

An investigation into the ways in which outsourcing and the threat of outsourcing is used as a weapon of class warfare and labour discipline in the public sector, as well as possible tactics for fighting back.

The outsourcing of public services has become major news in recent years. The UK is now the second largest market for outsourced public services in the world and with the combination of ongoing budget cuts and the neoliberal demands for ‘efficiency’ and private provision outsourcing is a major consideration across the public sector. However a focus simply on numbers and statistics can overlook the impact of the threat of outsourcing as a weapon of class warfare and labour discipline.

My own experience of this comes from being an admin worker in an NHS department that went through a lengthy outsourcing review before being given a last minute reprieve a couple of months ago. Whilst not wanting to generalise too much from one experience, I thought it would be worthwhile sharing some of my conclusions about the effects of this process, it’s effectiveness as a form of class warfare and possible ways in which we may be able to fight back.

Outsourcing, job security and labour discipline
In an era of increasingly casualised and precarious working conditions most public sector organisations retain a degree of job stability that gives workers a degree of industrial strength. Permanent rather than fixed term contracts generally remain the norm whilst disciplinary processes follow a formalised format, with opportunities for challenge and appeal by the workers involved. Furthermore, whilst the major public sector unions have long retreated from pushing much in the way of workplace action in their role of ‘labour side representation’ they do play a role in ensuring processes are followed and limiting the arbitrary power managers are able to exert. As a result with the exception of major misconduct cases public sector employers lack the ability to hire and fire at will, giving greater power to workers to resist demands for ever greater workrates, longer hours, etc in the workplace.

Outsourcing and the threat of outsourcing undermines this job security. Public sector employees involved in an outsourcing may find themselves ‘TUPE’ transferred to the private company taking over the contract, transferred formally on the same contract and with the same protections as before for the first 12 months, but at high risk of having their terms and conditions challenged or being forced out in favour of workers on the new companies own terms and conditions (which are generally significantly worse). Alternatively, even TUPE transfer may not be an option; in my own case the outsourcing plan was to move the department to a centralised national location hundreds of miles away, with me and my co-workers offered possible redeployment to another department or, if that failed, being made redundant.

This means that consideration of outsourcing creates uncertainty for what were previously fairly secure jobs. As a result workers in departments being reviewed for redundancy are put in the position of being effectively forced to beg their employers for their jobs. Employers usually expect workers to show a willingness to ‘be reasonable’, to capitulate to their demands if they want to have any hope of remaining in their posts.

Monitoring, statistics gathering and the quantification of services
As part of a review the department is likely to come under intense and sustained monitoring to judge whether it is succeeding or failing, i.e. whether the department is meeting a serious of quantifiable targets to be measured against some aspects of its work deemed to be important. Such a process is contentious; most public sector departments’ work involve a variety of activities, and in order to quantify in such a manner an assessment has to be made as to the relative importance of these activities and the parameters within which these are defined which usually downplays or excludes aspects of the job. Furthermore, it leads to a concentration of all efforts on the areas of work being measured, investing all efforts into making the numbers look good and all but ignoring anything not on the sheet of targets.

As a result as part of the review a vast amount of time and energy can be spent on creating monitorable targets and on collating quantifiable data so that judgements can be made based on these. For example as part of the outsourcing review of my service we were obliged to spend many hours inputting information on our work into unintuitive programmes so that statistics and graphs on our work rate could be produced for the monthly report.

Unfortunately a consequence of building these sets of numbers, in theory to make the case for not outsourcing, is that it creates exactly the kinds of measurable outcomes which are necessary for outsourcing companies to seek to undercut and outbid. Outsourcing has most commonly taken place in areas where there are clear rates of output, clear targets which provide a template basic service which the company can then seek to provide as cheaply as possible. Where the work of the department is more complex, where a department carries out a variety of activities that it is harder to catalogue and measure it makes it difficult to frame their work in terms of a baseline service that an outsourcing company can look to provide as cheaply as possible. Thus outsourcing becomes harder for private companies to make a profit from and more difficult to tender, reducing its attractiveness.

There is therefore a paradox in that the creation of data and targets on service provision, one of the tasks that workers often spend many hours on as part of the outsourcing review and their attempts to keep departments in house is also key to making outsourcing a feasible option.

The threat of outsourcing as the ‘new normal’
Even where the decision eventually goes against outsourcing this decision is never final. Deciding not to outsource at this time, to this specific provider leaves the door open that at a later point, when a better bid is offered or when managers are once again dissatisfied the issue of outsourcing will be raised again, something that employers are often only too happy to point out. In my own case it was made clear that, whilst the decision had been made not to outsource this time it would definitely be reconsidered should the desired improvements in the numbers not be shown. Indeed, a team we work closely with whose own outsourcing review had only ended a few months prior were told the week after we were cleared that they were once again up for review.

This means that the disciplinary effects of an outsourcing review, which many workers and indeed the main unions are often willing to accept as a one off process, becomes an ongoing force creating ever present job insecurity. Demands for higher pay, better conditions and particularly every day demands for a less intensive and more pleasurable working life come up against the danger of outsourcing, the implicit threat by management that if you don’t play ball they can sell off the department to someone who will. Thus outsourcing either as an actual process or as a threat becomes a key part of undermining public sector work security and disciplining public sector workers.

Resisting outsourcing
The question therefore arises of how best to resist these forces. In my own personal case I do not feel I was particularly successful in this regard; in my department there was some open unrest, demands to see managers, etc but by and large we went along with the process. That we were not outsourced was in my case down more to luck than through our active resistance. Nevertheless I did see potential for resistance. For example such a collective threat acts to engender a sense of solidarity and collective interests, whilst direct managers who are also facing the threat of outsourcing cannot always be relied on by the hierarchy to effectively dampen workplace dissent.

One source that sadly cannot be relied upon for resistance is the mainstream unions. In line with their labour side representation role, the national policy of the big unions towards outsourcing is generally one of token opposition alongside activity around ensuring the outsourcing is properly carried out, i.e. that all the boxes are ticked before the outsourcing finally takes place. A common experience is for unions to come up with a series of excuses for not taking action - union density isn’t high enough, the moment isn’t right, we need to act professionally to prevent outsourcing, etc – before eventually stating that it’s too late and there’s little they can do. For example, during the recent campaign against outsourcing at Sussex University the UNISON branch offered token opposition to outsourcing whilst fighting tooth and nail against attempts at active resistance by workers (such as the pop up union set up for the purpose of taking strike action) before eventually announcing that the university had consulted with them to their satisfaction and they were no longer opposing the outsourcing. Thus whilst there are undoubtedly many good militants resisting outsourcing within unions their approach on a national scale is generally at best ineffective and at worst openly hostile to resisting outsourcing.

In terms of active resistance something worth considering is the ways in which workers are required to create the tools through which their work can be monitored and measured and how we could look to prevent the creation of the statistics and quantifiable units that outsourcing relies upon. Collective attempts to subvert, sabotage and neglect the collation of data necessary for outsourcing, to insist on doing the job rather than creating numbers regarding it and undermine attempts to package departments as something outsourced companies can run at a profit could be an important way to make outsourcing unviable.

There is room to play on the fact that, although a growing force, outsourcing remains highly unpopular. Whilst some outsourcing evangelists may close ranks in the face of vocalised hostility (for example the Vice Chancellor of the University of Sussex stating that he would outsource even if everyone on campus opposed him) many public bodies considering outsourcing are highly sensitive to negative responses and would like to do it as quietly as possible. In these situations publicity and a vocal campaign against outsourcing can be effective in convincing managers that it is not worth the hassle it creates,

More generally there is a need to recognise outsourcing as an ongoing issue people in the public sector are going to face and thus that we cannot simply kowtow to managers in the hope that it will go away. Building collective relations and resistance both by those in the public sector and, importantly, by those who have been outsourced is important if we want to counter the use of outsourcing as a tool of labour discipline and the class offensive it represents.

Comments

Spikymike
May 2 2014 11:53

I'm retired now but this text accurately describes the processes I witnessed working for a Labour run Local Authority. There has though been a good 15 years or more of departmental restructuring involving processes of internal marketing and shadow contracting going on in preparation for subsequent outsourcing and many local authorities have been using short term contracts and temporary workers for a very long time as a means of divide and rule. The more recent drastic cut backs in LA staffs, with longer standing experienced and more militant members worn down by all the changes and taking the carrot of early retirement or redundancy with sweeteners (negotiated by the unions) has left a very demoralised workforce, where younger recruits have not actually taken up with gusto the most recent corporate ideologies. I'm afraid the much earlier (union encouraged) sectionalism of staff within the LA.s over a period of time has now made it harder to unite workers in struggle across the LA and various outsourced trusts and companies but it is that which needs to be developed in the longer term.

Steven.
May 6 2014 14:01

Hi, thanks for posting in general I think this was a good article.

A couple of (mostly technical) points, though

Quote:
In an era of increasingly casualised and precarious working conditions most public sector organisations retain a degree of job stability that gives workers a degree of industrial strength. Permanent rather than fixed term contracts generally remain the norm whilst disciplinary processes follow a formalised format, with opportunities for challenge and appeal by the workers involved.

On this, in UK employment law there are statutory requirements on disciplinary procedures, which include a mandatory appeals option.

That said, of course some employers ignore this. But rather than it being a public/private sector difference, I think it is more a big/small employer issue. Where small employers may not bother, or may not know how to do things properly.

With regard to fixed term/permanent contracts, quite a lot of public sector employers do now make use of rolling fixed term contracts. However in either the public or private sector once someone has had a fixed term contract rolled over for four years, they have the same rights as a permanent employee in any case.

Quote:
Furthermore, whilst the major public sector unions have long retreated from pushing much in the way of workplace action in their role of ‘labour side representation’ they do play a role in ensuring processes are followed and limiting the arbitrary power managers are able to exert. As a result with the exception of major misconduct cases public sector employers lack the ability to hire and fire at will, giving greater power to workers to resist demands for ever greater workrates, longer hours, etc in the workplace.

Again, I don't really think this is a public/private sector issue. Employers' ability to dismiss workers in my view is more down to the law than the sector or the unions. After two years (it used to be one up until recently) workers are legally protected from unfair dismissal, and so can only be sacked for: misconduct, sickness, underperformance, redundancy or "some other substantial reason" (like they are a delivery driver and they lose their licence for example)

So I think this is really the case in workplaces where there are more long serving, directly employed (as opposed to agency), members of staff. Which does include most of the public sector, but also plenty of medium to large private sector organisations.

Quote:
Outsourcing and the threat of outsourcing undermines this job security. Public sector employees involved in an outsourcing may find themselves ‘TUPE’ transferred to the private company taking over the contract, transferred formally on the same contract and with the same protections as before for the first 12 months, but at high risk of having their terms and conditions challenged or being forced out in favour of workers on the new companies own terms and conditions (which are generally significantly worse).

On this bit, the conditions are not protected for 12 months, but for an undefined period of time. Basically the stipulation is that they can be changed for a "valid" business reason (for which there is extremely wide scope)

So essentially, TUPE protections are almost worthless.

I was involved in a failed campaign against outsourcing. The employer stated they believed that TUPE would not be eligible. We thought that we could probably make legal case for it, however legal advice from the union (which was then agreed by union members) would be that it would not be worth challenging, as the workers would be better off being made redundant on the basis of better pay and conditions, then just applying for the new, lower paying jobs. As otherwise they could be moved over and then have their pay and conditions cut shortly after anyway, with no redundancy money.

Ultimately, the government's plan is to outsource everything. And while it is an attack on the working class I believe ultimately it could backfire. Its main advantage for employers is that it breaks up the workforce. Having large, public sector employers gives workers the opportunity to organise. And the solidarity can be broken up by splitting people into smaller, competing units.

However, it does seem like a lot of these outsourced service providers are consolidating. Smaller ones are going bust, and a few leaders are emerging, taking on huge numbers of contracts. This consolidation will probably continue until we end up with a few giants like ISS, Veolia, etc where employers could again face the same problem. But this time they won't be able to use the ideology of the "public sector" to divide workers.

Hopefully anyway!