Examination of Witnesses (Questions 1
- 19)
THURSDAY 25 OCTOBER 2001
MR JOHN
EDMONDS AND
MR MICK
GRAHAM
Chairman
1. On behalf of the Committee, may I welcome
our witnesses this morning, John Edmonds, General Secretary of
the GMB and Mick Graham, who is the National Secretary for the
Public Services Section of the GMB. Welcome to both of you. Thank
you for taking the time to come along and meet us. Do you have
something you would like to say to kick off?
(Mr Edmonds) Yes, we do. May I begin
on a personal note and offer condolences? GMB is a general union;
it is one of the biggest trade unions in the country. We have
something like 700,000 members and they are split on a gender
basis 60 per cent men and 40 per cent women. They are also split
between the public and the private sector; again about 60 per
cent of our membership is in the private sector and 40 per cent
of our membership is in the public sector. In the private sector
we have membership in many of the largest companies in the country,
manufacturing, private services, utility companies and so on.
I make the point about the spread of our membership just to indicate
that we know a little about both the public and the private sector:
we know about entrepreneurship, we know about shareholder value,
we know about investment plans, we know about training, or in
many places the absence of training. In the public sector we know
about CCT and best value and PFI and PPP and so on. We come to
the Committee, certainly without any prejudice about any of this,
but I hope with some little bit of knowledge which we can offer.
A major concern of the GMB as a trade union is in respect of the
terms and conditions of our members, not just pay, although we
are interested in pay, but safety and security issues, questions
about training and promotional opportunities and career structures
and the ability of people to have a pride in the job. We have
been surveying our members and the employees of this country since
the early 1980s on a very regular basis. We ask them what they
want from work and the two most prominent aspirations they express
are for job security and for satisfaction at work, job satisfaction.
Those are the two things the employees of this country want from
their work. I just make that point because sometimes trade unions
are pushed into a rather narrow scope of argument about pay and
basic terms and conditions. We also have a wide interest in what
is sometimes called the social wage, the welfare state. We negotiate
terms and conditions for our members, and if the pay of our members
is supplemented by a health service free at the point of delivery
and free education and so on, then the money we negotiate is that
much more valuable than if people have to insure themselves in
various ways and pay for services which in other circumstances
are delivered through taxation. We have a set of values. We believe
very strongly in the public service ethos and although ideology
these days tends to be shoved off and disregarded, we do believe
that people at work do not just work for money, but they work
for job satisfaction, for pride in the job and they wish to do
a job which is worthwhile. Very many people who work in the public
services clearly do not work in the public services because they
believe they are going to make a great deal of money, but they
work in the public services from a feeling that they are doing
a job which is valuable to society. We believe that feeling is
something to be prized, to be praised also, but certainly to be
valued in a substantial way. What are the conclusions from our
experience which we should like to offer for consideration by
the Committee? We believe that public service workers are pretty
demoralised and have been for some time. They have been subject
to all sorts of attacks, some direct, some indirect, over the
best part of two decades. They do not feel valued and they ought
to be. Secondly, the quality of the public services in this country
is substantially lower than it should be and it must be improved.
We support the Government's intention to improve the quality of
public services, indeed we have been calling for such measures
for the best part of 20 years. You will see from one of the documents
which we produce, which is circulated to you, that put very high
up on the list of our particular concerns is that public service
workers must show that commitment to an improvement in public
services. We recognise that as a trade union representing public
service workers and frankly so do they. Our third experience is
that the quality of management in this country, both in the private
and the public service is a lot lower than it should be. It compares
very badly with our main competitors across the Channel and more
widely in the industrial world. There is a lack of training, both
in the private and the public service and many of our people in
the public services are inadequately trained; but that is true
of the private sector as well. As far as the privatisation and
the introduction of private companies into the public services
is concerned, what has been our experience there? I have described
it in other places as having been dire. It has been the practice
of some people to claim that it has been patchy. I think that
is a rather generous description. We have very, very large numbers
of examples of very bad outcomes. First of all, we have said and
we have produced documents—you have some of them but we
can leave others with the Committee—which seem to demonstrate
that the PFI project is very bad value for money, for the Government,
for the people of this country and for patients and students and
the users of public services. Secondly, there is a poor record
of quality where the private sector has been used in the public
service and the examples are legion. We can exhibit many of them;
many, many of them. There have sometimes been attempts to save
money and this has affected quality, but on other occasions there
has been an attempt to drive down quality standards in order to
produce profits on contracts where the price has been under tendered.
There is a general tendency to drive down employment standards
where the private sector has come in. We believe this is an unreasonable
direction of policy and we support the re-introduction of fair
wages provisions and the development of TUPE so that people who
are moved from the public sector to the private sector have decent
protection. We also think that these privatisation developments
have in various ways led to a significant loss of accountability
to electors and to local residents and to patients and a blurring
of responsibility. This has been most clearly seen in Railtrack,
but that is an extreme example of what we see very many times
in local government and in the Health Service. We believe that
this change of bringing yet more private companies into the public
services is something which should be debated, but it should be
debated on the basis of evidence, not on the basis of assertion.
We have been accused from time to time of asserting certain things.
We have actually taken the trouble to justify those assertions
by substantial amounts of research but we believe the Government
has been proceeding by assertion. This argument should really
be evidence based. If there is a case for extending private sector
involvement in the public services, there should be evidence to
demonstrate that this is a good thing. The comparability exercises
should be open to everybody, should be transparent and should
be subject to analysis and subject to comment. Our conclusion
so far in advance of such an evidence-based debate is that the
examples of poor outcomes are so numerous that the onus should
fall very strongly on those who advocate a further expansion of
the private sector into public services to justify their particular
plans and suggestions in some detail. In some areas, maybe in
some technical areas like IT support, although we have considerable
examples where that has not been a great success, this may be
possible. We think that in the delivery of many core services
it ranges from the very difficult to the impossible to demonstrate
that the future introduction of more private sector companies
would be worthwhile. Those are our conclusions. We have commissioned
a good deal of research. You have some of it. We can make the
rest available to you. We have analysed all PFI projects which
have been completed in the Health Service and we have done our
best to analyse those which are under construction, although sometimes
the lack of transparency makes it more difficult to come to the
final outcomes. We know from our own experience a great deal about
what goes on in local government, compulsory competitive tendering
and now best value. We have tried to bring together research and
our own experience and those are our conclusions.
2. Thank you very much indeed for that; it is
most helpful. The Committee is endeavouring to look at some aspects
of the public service reform agenda. You touched on some of those
issues as you have gone along. We wanted to start by trying to
clear our minds about this thing called public service ethos,
to see whether we knew what it was, to see whether anybody knew
what it was and to see whether problems were raised by it in relation
to running services differently. In your brief for the Labour
Party Conference which you kindly supplied to us, you do say and
you have said it today that the GMB believes in the public service
ethos. Does it know what it is?
(Mr Edmonds) We think we do. We think it is an ethos
of people who believe that working in the public service is valuable
to society. It brings its own satisfaction. It is a determination
to provide a high level of services at decent value and it is
a belief that those pleasurable and happy outcomes are not achieved
by straightforward commercial motives, by profit and by return.
It also means a willingness to work within a system of accountability
to elected representatives and representatives of the people and
to recognise at every stage in the work the accountability to
those elected representatives.
3. That is an interesting answer but there are
different strands to that. Do you feel it is primarily to do with
the values of the structures within which you work or is it something
to do with the values of people who work in them?
(Mr Edmonds) We are a trade union, so we value the
people more than we value the structures. We believe that the
way in which people work—and I tried to say this in introduction—is
to do with their own pride in what they are doing. The pride in
delivering something worthwhile is a significant one and in most
of our experiences over the last 20 years that has tended to be
rather disregarded. There has been a general feeling in a society
that the best way to motivate people is by money and to tie people's
performance as closely as possible to money is the way forward.
This has often led to some extraordinary outcomes because sometimes
defining performance in the public services is really rather difficult
because in some cases you have to take rather general views; it
is clear in education; it is clear also in health. We would relate
it rather to the values of the individuals that you are doing
something worthwhile for society and that is your motive rather
than being driven by profit, bottom line and the wish to maximise
your own personal income.
4. If that is what it is, if it is values of
individuals, then perhaps you could explain how, if you believe
it to be true, the values of a carer in a private nursing home
are different from a carer in a home run by a local authority.
(Mr Edmonds) I do not think they are. The problem
is that in the public services properly run, where people are
properly valued, those values of the individual are given proper
attention and are themselves valued. In parts of the private sector,
there is sometimes a conflict between that wish to provide that
extra piece of service, that extra piece of care and the need
of a private sector organisation driven by profit to make a reasonable
profit and to increase shareholder values. I cannot do better
than the way this was expressed by Stephen Byers when he was saying
that Railtrack as a private organisation had failed because of
the conflicts between the commercial motives and the need for
safety. I would add safety and care and concern. That is the problem
we see. If you put people with those values in a structure where
by the nature of the thing we have many hundreds of thousands
of people who work in the private sector, where the main concern
has to be shareholder value you have some very uncomfortable conflicts.
5. I am still having trouble in getting my mind
around this idea that you tell us, in the example I gave you,
that the values of the carer working in the private nursing home
and the one in the social services run establishment are the same,
yet somehow because of structures they are different.
(Mr Edmonds) No, I am not saying their values are
different. I am saying that there is a conflict between their
values and the demands of the organisation for which they work.
6. Are you saying you cannot have a public service
ethos in an establishment run privately?
(Mr Edmonds) You can have people with social values
which find their best home in the public services working in the
private sector and we have many people like that and they usually
have a pretty uncomfortable time. Let me tell you the normal experience
when a hospital decides to contract out its cleaning services.
Very often and at times in the past cleaners were regarded as
part of the social group within a hospital. They talked to patients,
sometimes they ran errands for patients, they were regarded as
part of the team. That is actually a very good way to run a hospital.
If you then say that those cleaners are now working for a private
company which is driven by profit then what those cleaners will
find very quickly, day by day, is that they will be reminded that
what they should concern themselves with is the details of the
specification and nothing more. We have many, many examples of
people who have been told that they must not run errands, they
must not talk to the patients, they must not do those things which
make a hospital a civilised place because the contractor has obliged
itself by contract to stand by particular measures, a particular
specification and anything outside that is time consuming. That
is an example of the conflict. Mick will no doubt be able to give
you many examples but that is one I have found over and over again.
7. So the public service ethos can only be found
in public sector institutions because of these conflicts you have
identified.
(Mr Edmonds) I believe so. I believe that the public
service ethos—we are getting into semantic issues here—
8. It is quite important.
(Mr Edmonds) Maybe it is. The social values I am talking
about can be found in all sorts of organisations. All I am saying
is that if you put them into a private sector company in the way
I described by reference to this particular example of privatisation
of hospital cleaning services, you find conflicts and those conflicts
are often very unpleasant for the employees. They are often also
very unpleasant for the general public, the consumers in the hospital,
the patients. They find that those people whom they wanted to
talk to—because people in hospital need support, they need
social intercourse all the time—the people cleaning the
floors, cleaning the radiators and so on, have to rush off because
they are working to a specification which is profit driven. That
is a rather significant example, but it is an example which has
wide application.
9. Is it not the case that many people have
found over the years that people who work in the public sector
in situations of the kind you describe have sometimes not displayed
the kind of values you describe, despite the fact they were working
in a straightforward public organisation?
(Mr Edmonds) Yes; of course. The world is made up
of saints and sinners. Yes; of course.
10. The values can be non-existent in a public
organisation.
(Mr Edmonds) I would not say they would be non-existent
but certainly some people who work in the organisation will not
aspire to and will not show those values. That is certainly the
case. In fact of course the sort of public debate which has taken
place over the last 20 years has rather downplayed those values.
It was regarded at one time as a good thing to say that one worked
in the public service because it was a worthwhile job. Over the
last 20 years anybody who has worked in the public services has
felt under some obligation to apologise for it and not justify
their work on the basis of social value. Many of the managers
in the public services have been forced to use overtly commercial
measures—sometimes they are appropriate, sometimes the targets
are extremely inappropriate—in order to fit themselves into
the conventional wisdom which is very much pro commercialisation
and frankly against that flowering of the spirit which is there
in the public service at its best. We often do not achieve anything
like that, but if you have a public atmosphere which downgrades
the value of public service and the public service ethos and public
servants, then it is not surprising that some of the public servants
will be first of all apologetic, then demoralised and then the
better ones will start expressing their public service values
in rather different terms in order to fit in with the values of
the times.
Brian White
11. Is it not the case that there are examples
of tensions within the public sector as well, the kind of conflicts
you talked about, so that when a council starts cutting budgets
you get those kinds of conflicts you were talking about as well?
(Mr Edmonds) Of course; of course. The targets and
the requirements—I use the widest possible word I can—on
local authorities and the NHS and other parts of the public service
have to be designed very carefully. If you get them wrong you
can lead to an intensification of these conflicts. If, for instance,
you say to a local authority that they have these additional 20
social obligations arising from extra pieces of legislation, but
their funding does not represent the money or does not produce
the money necessary for those, they need to find those savings
by efficiency savings in order to fund the extra duties which
legislation has put on them, then there are going to be very considerable
tensions and we have seen a lot of that in recent years.
12. In an example like Middlesbrough, where
it has had genuine support for the kind of proposals it is putting
forward which bring in the private sector, does that have a public
sector ethos in it because it tries to resolve some of the conflicts
you were talking about?
(Mr Edmonds) People are put under enormous pressure
and we try to protect our members, of course we do, and we try
to deliver better quality services for residents. We can sometimes
find solutions which involve the private sector. However, if you
went back to the members and asked, leaving aside these considerable
external pressures, whether they wanted to do it this way, most
of them would say no, they do not. What you are getting is a compromise,
sometimes a third best solution where resources and policy have
rubbed out the first two.
13. In your analysis of PFI contracts, you have
presumably looked at the rules the Treasury set and presumably
you have looked at public service agreements as well.
(Mr Edmonds) Indeed.
14. How much of the problem arises from Treasury
rules and how much of it is down to the individual contracts which
are actually being put forward?
(Mr Edmonds) May I give an answer at the macro level
and Mick would like to deal with some of the more obvious implications
of these agreements? The advantage of the PFI seems to be that
because this is private money, so-called, it does not show up
in the public sector borrowing requirement and therefore this
is a way of fudging the figures and still producing extra public
service investment. My union has suggested for some years that
there might be a rather easier solution to this problem and that
we might follow the generally understood definitions which apply
throughout the European Union and therefore if the public sector
borrowing requirement definition requires us to do stupid things,
we might change the rules so that we do not have to do stupid
things. PFI seems to be justified now as a way of squaring the
public sector borrowing requirement rather than being the best
way of producing high quality services for patients and students
and parents and residents.
(Mr Graham) No-one can disagree that public services
need modernising, they need upgrading, but the fundamental flaw
in our view in the Government's argument is that it is only the
private sector and private sector finance which can deliver that
change. All the evidence over the last 20 years in local government
and in health has not seen an improvement in the delivery of the
Health Service and the Education Service. There is massive under
funding within our public services. Public services are labour
intensive. They are essential services. You made reference to
the home care situation. We have seen tens of thousands of predominantly
part-time women workers being transferred to the private or voluntary
sector as a result of cutbacks, as a result of financial pressures.
In local government alone we have seen a 13 per cent fall in employment
rates and a 21 per cent drop in the terms and conditions, all
on the profit motive. These people are predominantly women, cleaning
in hospitals, cleaning in schools and home carers. They cannot
deliver the service they want to deliver because of the pressures
the contract is imposing upon them, because of job insecurity,
because they are not allowed to do what they want to do for the
patients, for the elderly people. We can give example after example
of attacks on terms and conditions of employment, on job security.
The EOC published a report in 1998[1]
which was damning about the effects on part-time women workers
in local government where earnings had been attacked, the lack
of job security, no pension provision, etcetera. You will not
deliver the modern 21st century service to the public unless there
is a real commitment to investment in the service and in the service
providers.
15. How has the way that project funding works
affected your members and the fact that projects last for one,
two, three years and then they have to find more money?
(Mr Graham) That is a major issue in many areas. We
have just commissioned some research—and I shall use home
carers as an example—into local authorities who have been
forced to use the private sector for residential care and increasingly
for home care. The maximum increase we have seen in the contract
price is one and a half per cent. Local authorities are actually
putting the private sector under increasing pressure who are in
turn putting our members under pressure. We are seeing a worsening
in the level of service which is being provided. It comes back
to funding.
(Mr Edmonds) This works through. If this happens in
residential homes and there is pressure on residential homes,
that means that people who might be in residential homes are in
hospital. That means that beds are taken up in hospital which
might otherwise be free. PFI projects have tended to reduce the
number of hospital beds; we have evidence galore about that and
in fact the Minister has now had to intervene to try to correct
that effect. You have pressure on beds, pressure on care and then
we are surprised that the time people wait in A&E departments
is greater. Of course it is, because you cannot move them into
the beds because the beds are occupied, because the beds are occupied
by people who should be in care and there is pressure on the financial
resources of the care homes so the thing works through at every
stage. There is a phrase about "joined-up government"
and this seems to me an area where joined-up government might
be a worthwhile objective.
Mr Wright
16. I want to return to this cleaner in the
hospital and talk about the public service ethos in the private
sector. Is not the problem, certainly with privatisation, that
where that particular cleaner was transferred into the private
sector she carried that public service ethos with her, but where
that company took on new people, they did not have that public
service ethos and over a period of time that ethos probably breaks
down?
(Mr Edmonds) Generally what happens is that the company
takes on some of the work force. The better ones are then made
into supervisors; the rest are got rid of. A new work force is
recruited which is heavily and closely focused on the delivery
of the specification and nothing else. Those employees in the
public service who cannot make that change even if they are promoted
to supervisor are then disposed of along the way. So the ethos
disappears really quite quickly. If you cannot cope with the change,
you go and that happens over and over again.
(Mick Graham) A very good example occurred last week.
A local authority in the west country was letting a grounds maintenance
and parks and gardens contract and 15 GMB members transferred
under TUPE, the company and council reorganised the contract,
the company took on new employees and 12 of the 15 were declared
redundant. The new starters were retained, so we now have a potential
tribunal case. The new starters are being employed on worse terms
and conditions of employment and the public service ethos is being
eliminated by the private sector.
17. Do you think the strengthening of TUPE would
enhance the public service ethos where you could strengthen it
and encourage the Government to take it forward and that new employees
should be taken on on the same basis?
(Mick Graham) Certainly the removal of fear of change
is important to any worker. The important point on that is the
issue you raise of the two-tier work force. We have some horror
stories—we can leave you with some examples—throughout
the sector of new employees on inferior terms and conditions.
That goes against the principle of team working, working together
to provide a service. We do not want a two-tier service in this
country and we will have a two-tier service if we have a two-tier
work force.
Chairman
18. May I try to clear the ground on one thing
there before we get bogged down in this? You have been running
this campaign against what you describe as privatisation in the
public services, but it is not that, is it? It is the public sector
simply deciding who they would like to supply a particular bit
of our public service. Could be public, could be private, could
be voluntary, could be all kinds of things. That is not privatisation.
The service stays the same. Privatisation is when you transfer
a service from the public sector to the private sector. We are
not doing that.
(Mr Edmonds) I think the British public understands
exactly what we mean by privatisation. We mean a service which
used to be delivered by public service workers and is now delivered
by private companies.
19. If my bins are collected by a private contractor
rather than the council bin people, it is still a publicly provided
service.
(Mr Edmonds) It is a publicly provided service.
1 Witness correction: 1995. Back
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