Select Committee on Public Administration Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  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.


  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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