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External Private Contractors: Government Use and Employment
21 October 2020
Lead MP
Paula Barker
Liverpool Wavertree
Lab
Responding Minister
Julia Lopez
Tags
Asylum & RefugeesJustice & CourtsEconomyTaxationEmploymentForeign AffairsLocal Government
Word Count: 9847
Other Contributors: 10
At a Glance
Paula Barker raised concerns about external private contractors: government use and employment in Westminster Hall. A government minister responded.
Key Requests to Government:
I urge the Government to review the role and responsibilities of its Crown Representatives in light of the Carillion case. The Government should also consider making the payment of the real living wage, full sick pay from day one, and trade union recognition a condition of awarding contracts. Sobel asks why the Government ignores recommendations from experts and continues to award contracts worth hundreds of millions to private companies, rather than local public health experts. He also questions the delay in introducing a working track and trace app despite his early proposal.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
I am concerned about the use of external private contractors by the government, which has led to failures such as Serco's test and trace system. The merger between Mitie and Interserve is a prime example, with both companies holding civil service and public sector contracts worth over £2 billion but experiencing financial difficulties. Companies like Interserve have been involved in disputes over job cuts, pay, sick pay entitlement, and trade union recognition. The model of outsourcing facilities management services is unstable and often leads to companies running into financial troubles. Additionally, there are issues with inequality in pay and employment terms, as only two out of 23 ministerial government departments pay the real living wage to their outsourced workers. Alex Sobel is concerned about the outsourcing of track and trace services to Serco, an organisation with a history of scandals. He cites specific instances such as electronic tagging scandal fined £23 million by the Serious Fraud Office, cover-up of sexual abuse at Yarl's Wood, and poor conditions for asylum seekers. By August, only 40% of test results were returned within 24 hours and track and trace was failing to contact more than 30% of those who had been in contact with someone testing positive.
Alex Sobel
Lab Co-op
Leeds Central and Headingley
Mr Sobel questioned why local authority capacity was not utilised before contracting out to the private sector. He noted that many local authorities could furlough staff during the pandemic, maintaining employment without requiring such contracts.
Chris Stephens
SNP
Glasgow South West
I thank my Unison comrade for giving way. To support the proposition, there is a Unison briefing that shows in schools in England many private companies are only paying statutory sick pay. Does the hon. Lady agree this puts people in the position of having to choose between statutory sick pay and going into work, which is more likely to spread the virus? The hon. Member for Glasgow South raised concerns about the use of private contractors in asylum case interviews, questioning why it was a secret pilot scheme and whether the involvement of Serco with a former employee as director general could be influencing the decision. He also expressed fear over the exemption from human rights legislation that outsourced companies might have and highlighted issues such as consultants earning £7,000 per day on public projects and wage cuts for workers due to outsourcing. Asked Claudia Webbe a question but no specific content provided.
Claudia Webbe
Lab
Hackney North and Stoke Newington
Claudia Webbe expressed concern about the outsourcing of NHS services and its impact on public health, citing a £15 billion increase in NHS contracts to private companies over five years. She highlighted that this spending could instead fund 72,000 nurses and 20,000 doctors, emphasizing the need for better working conditions for outsourced workers. Leicester has been under extended measures and lockdown for the longest time. Private contractors have a test and trace success rate of less than 50%, while the local authority achieved over 85%. The difference between private and public sectors is significant.
Helen Hayes
Lab
Dulwich and West Norwood
Ms Hayes discussed the negative impacts of outsourcing, including poor pay, job insecurity, and lack of health and safety protections. She highlighted examples from various constituencies where outsourced workers faced exploitation or redundancy. She also pointed out that during the pandemic, outsourced staff often lacked proper sick leave benefits while performing essential work, disproportionately affecting BAME communities (16% for cleaners, 26% for security guards).
Jim Shannon
DUP
Strangford
He expressed concern over the use of agency staff who do not receive equal pay and conditions. He advocated for bringing services back in-house to ensure accountability and fair treatment, suggesting that public sector employees can be trained to take on different roles when needed.
Justin Madders
Lab
Ellesmere Port and Bromborough
He criticised the use of outsourcing, describing it as a scam that leads to cost-cutting through reduced employee terms and conditions. He highlighted the risks associated with weakening Transfer of Undertakings (Protection of Employment) regulations, arguing that job security should be prioritised in civil society.
Kim Johnson
Lab
Liverpool Riverside
Mr Johnson criticised the significant reduction in civil service numbers across key Departments while the outsourced market has a large annual turnover. He highlighted issues with the privatisation of test, track and trace services, pointing out inefficiencies and highlighting the high pay received by consultants compared to civil servants. He also raised concerns about job losses and insecure contracts under private contractors.
Mick Whitley
Lab
Crewe and Nantwich
Declared an interest as former regional secretary of Unite the union in north-west. Criticised outsourcing for fostering low pay, insecure employment, poor service delivery, and wasting millions on public contracts to companies like Interserve and Serco test and trace system that failed to track nearly a quarter million people who had been in close contact with someone infected with covid-19.
Navendu Mishra
Lab
Stockport
Mr Mishra highlighted the extensive outsourcing of Government contracts in Greater Manchester, particularly mentioning Carillion's involvement in major projects. He criticised the lack of accountability and poor conditions for workers employed by private companies on public sector contracts. He also pointed out the high costs associated with these contracts and called for an end to practices that do not prioritise workers' wellbeing.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Rachel Hopkins discussed the impact of outsourcing in the justice system, particularly the transfer of HMCTS staff to private contractors. She raised concerns about redundancies faced by transferred workers and called for an independent inquiry into the increased violence in private prisons compared to public ones.
Government Response
Julia Lopez
Government Response
It is a pleasure to serve under your chairmanship, Mr Pritchard. I am grateful to the hon. Member for Liverpool, Wavertree (Paula Barker) for securing the debate. The Government are the custodian of public money and it is very important that we retain the confidence of taxpayers about how that money is spent. It is similarly important that we have a robust, highly skilled civil service, with the expertise and capacity to deliver projects and services over the long term and at pace, and that we treat those in the private and public sectors who carry out work for the Government with respect. The civil service has historically used contractors, working alongside civil servants, to provide additional capacity and specialist skills and to manage short-notice urgent requirements. Where it is cost-effective to do so and the requirement is temporary, this makes sense, but let me also be clear that we are focused on driving down the use of consultants, improving internal civil service capability and driving greater value. We will revamp our in-house training; look again at procurement rules, particularly relating to social value; and continue the work of my predecessor, now the Secretary of State for Digital, Culture, Media and Sport, in dealing with issues about outsourcing raised following the collapse of Carillion. I met the leaders of the three civil service unions yesterday and will be very happy to look into some of the issues that were raised today about outsourced workers and their pay and conditions, particularly as regards sick pay. The hon. Member for Liverpool, Wavertree also talked about delivering social value through contracts and we agree. We recently took a new look at social value, considering how we take into account environmental factors in how contracts are delivered and the contractor's approach to apprenticeships. I assure the hon. Members who raised issues that we could not have responded to some of the challenges of the pandemic without expertise from both the public sector and the private sector. It is important that we understand that this process is a partnership between national and local, and between public and private. The private sector has provided the framework for the system with local authorities plugging into that framework. The private sector provides the national call centres but much of the local expertise is provided at local level from healthcare experts on the ground. We appreciate the expertise we have received from the private sector. I will not give way as I do not think I have time to respond to all Members, but I assure hon. Members that we need tighter controls around contractor expenditure supported by better quality data and management information.
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Assessment & feedback
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.