Stop the local government fire sale!

Submitted by Matthew on 20 July, 2011 - 11:08

A new government White Paper proposes to allow almost all public services to be opened up to competition from the private and voluntary sector. Vicki Morris reports on the reality of the Tory council in Barnet, north London.


Barnet council is inviting bidders for a contract worth £275 million over 10 years. The successful bidder will take over the council’s regulatory and development functions which includes things such as planning, environmental health and transport.

This is only the first of a number of big contracts worth more than £1 billion over the next 10 years.

The Tory administration wants the vast bulk of council services to be carried out by private companies. Any money that the private companies manage to save, by doing the job for less than the council pays them, they will keep and give to shareholders as dividends and senior executives as more pay. The chief executive of Capita, Paul Pindar, is already paid £14,500 a week.

Staff now directly employed by the council will be transferred to and employed by the private company which wins each bid.

Those staff will take their current pay, holiday entitlement, sickness pay, etc., with them. However, there is no guarantee that this protection will last long. One of the purposes of this type of outsourcing is to attack workers’ pay and conditions of service.

The council unions have been campaigning against this mass privatisation since 2008. They have been supported by a growing band of anxious residents. The recent scandal has shone light on just how bad the council is at handling the outsourcing it already does.

A small, local firm called MetPro started providing security at some Barnet council buildings in 2006. No tender was put out and no contract with this company ever drawn up. By 2011 the company had made more than £1.3 million from the council, well over the threshold at which the work should be properly tendered.

Disgruntled local residents investigated MetPro and discovered that they were going bust, owing £400,000, £245,000 of that to HM Revenue and Customs. We also found out that the council had never checked whether MetPro staff were CRB checked – they weren’t — or whether the company was registered with the Security Industry Authority — it wasn’t. A recent damning internal audit report showed that Barnet council routinely ignores its own Contract Procurement Rules.

If Barnet can’t manage a small contract like this with a local company, how is it going to handle a massive, multi-million contract with the big boys such as Capita and Serco?

Barnet say that mass outsourcing will save millions of pounds. In fact, the savings they show on paper are actually quite small, and, of course, might never be achieved.

After three years, the One Barnet Programme has only cost money — several millions in consultancy fees.

There is no sign of anyone but large companies picking up the functions the council is trying to shed. Barnet is cutting the already small grants they make to voluntary sector organisations.

There is a lively anti-cuts group, Barnet Alliance for Public Services, which has taken up the fight against OBP. The council unions commissioned 30 reports in response to the council’s proposals; none of them has been properly answered.

Now, as each section of council staff is “packaged” up and offered for tender, the council Unison branch is balloting them for strike action and action short of strike. So far the staff balloted have voted overwhelmingly for action. Development and regulatory staff are currently working to rule; revenues and benefits and parking staff should all be taking action soon.

Barnet NUT has some staff affected, but fewer, and is facing the challenge of rapid academy-isation in secondary schools. The GMB branch is not taking industrial action, although their activists have been involved in the community campaigns.

After some delay Barnet Unison got the backing of the London region for an industrial strategy and Unison has at last realised that outsourcing threatens the union’s position in local authorities, based as it is on their power to bargain on behalf of council workers. With new legislation in the pipeline and Barnet leading the way, this is an issue confronting all local authorities.

Outsourcing is a central part of the Tories’ war to drive down the conditions of working-class people, and erode the quality and accountability of public services. We must fight it!

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