The perils of outsourcing

There was an awful lot of flabby management in local government before they started outsourcing but the need to win the contract led private companies to put in tenders so low that they had to employ poorly paid and poory trained staff. However, things were by no means tight and efficient in the private sector. One of my daughter's boyfriends worked at Vauxhall in Ellesmere Port in the 1970's. He told us that every worker on the production line has made himself a nice little den, complete with pillows and blanket, for them to have a kip during their shift.
I always thought the proper action was to make public services efficient, rather than to introduce the profit motive. I am very concerned about the idea of 'farming out' more and more services to the private sector,particularly those that deal with children and vulnerable adults.

Greatnan - my thoughts exactly - your final paragraph says it all. You can introduce efficiency into services without playing the putting out to tender game. Competition is all very well, but when high quality is essential (when dealing in public services) cutting corners to cut costs and make the bid more favourable simply does not cut the mustard.

And that sort of mindset devalues team working and all the subtle psychology of people working together to a common goal. Hospitals have suffered by having too many different companies doing different bits of the work - the sense of a common aim and care for each other within the team is lost. Those are the things that really make the difference when it comes to quality of care. I watched all that drift away in my hybrid job that straddled SSD and health. It was heartbreaking.

William Waldegrave warned Conservatives in Monday's Times never to "make the mistake of falling in love with free enterprise", adding that people who believe "private companies are always more efficient than the public service have never worked in real private enterprise".

Sorry - that went before I had finished . I meant to add the link to this article.
www.guardian.co.uk/commentisfree/2012/jul/17/g4s-privatisation-racket-outsourcing-revulsion

Thank you for the link, Mamie - I feel vindicated, because I have always resisted the idea of privatisation. I felt especially strongly about the handing over of the supply of water , a basic need which should never have been given to foreign countries for them to make a profit.
How sickening to see the Tories embracing the public sector, after so many years of promoting the profit motive as the way to efficiency. Of course, New Labour was just as culpable.
I would love to see further revelations of all those ministers/advisors who were responsible for awarding lucrative contracts and have later gone on to join the firms receiving them. I will rely on Private Eye!

Greatnan - water privatisation - again - sometimes a good idea and sometimes not. For the UK it was the best example of privatisation because it allowed the network to be modernised. Without it we would be in a desperate state with leaky Victorian iron pipes bursting all the time, poor water quality and filthy rivers and bathing waters. EU legislation forced the issue. Anyone unconvinced should first read this link:

www.belfasttelegraph.co.uk/weather/northern-ireland-paralysed-by-the-big-freeze-14614969.html

That mess occurred while the rest of the UK had very few bursts.
Water is still under LA control in NI.

But having said that, I have serious reservations about doing the same thing in poor countries. And who, seriously, is going to want to buy shares in the Greek water system (privatisation is one of the "conditions for the bailout")
The idea of privatising social work teams seems to be the ultimate example of current Tory stupidity. Or am i missing something

The bottom line has to be that private companies have to make a profit that is why they exist, civil / public service does not there prime function was to serve.

After nearly 40 years in state education I am not pretending everything was always perfect but the more the services were contracted out the more complex and less unified the service became and it was more often than not not as good as the original locally provided service.

I think the trouble is that most of us have only either worked in the private or public sector so only have expereince on one side of the fence.

I don't see anything wrong with making a profit, that's what makes the world go round. Thinks like proper training and standards should be in the contracts and should be monitored to ensure they are being maintained. If the public sector can do a good job at the same price they should do it. On the other hand if the private sector can do a good job at a lower price then they should do it. Why not? Surely the important thing is that the job is done properly and at the best price whoever does it. When awarding the contract the cost of monitoring should be factored in.

I don't believe there is a 'wrong' and a 'right' way just a 'best' way.

I've worked in both and in charities and it is the ethos of the public sector I find more acceptable. The recent reorganisations and 'reforms' in health, education, local authorities and so on seem often to have resulted in adopting the worst, most macho managerial aspects of the private sector rather than the best. The select committee hearing yesterday highlighted problems which can arise with a commercial organisation running public services but the one I find most distasteful is the treatment of workers on the frontline. When local authorities had to outsource services it resulted in the workforce losing their jobs or being re-employed on much less favourable conditions and (often) lower pay. This does not encourage commitment or efficiency.

I agree with you Lily but we do not live in an ideal world where everyone is paid enough and all get job satisfaction. I'm afraid that most people do work in the private sector under the conditions you describe. It is the unfairness of the different working conditions which makes some people resent those working in the public sector.

I don't understand how anyone ever thought that giving the whole contract for the Olympic security to one company was ever going to work. Some blame must lie with those who awarded the contract and failed to monitor what was happening. I rather imagine that people were trained months ago and for whatever reason are no longer available. Surely this could have been forseen? It is interesting that all those who volunteered to work for nothing seem to have turned up and be doing a good job!

Absolutely it could have been foreseen alison - recruiting 10,000 people off the dole queue (or from university), getting them trained and then putting the whole lot into a waiting bay to be brought on stream all within a week!
What is going to happen? Some of them will find other things to do while waiting. It is not, after all, a proper job. Normally temps for roles like this are recruited at short notice. You will have to recruit a hefty management team to keep in touch with them, make sure they know where they are supposed to be and when. Check they have not left the country or got other jobs... I could go on. Not a bit surprised that they are not all turning up.
But there is no way any part of the public sector could have taken this on either. The contract needed to be broken down. There are lots of competent recruitment agencies that could have taken on a venue each.

Totally agree with you Jess this is just what I have been saying so why was it not foreseen by the people who earn a lot more than I every did?

I'm just glad I wasn't working on it because it must have been a nightmare. The biggest recruitment project I ever did was about 60 of them, and they had to start in particular cities on particular dates. ANd they had to be suitable to go into the houses of vulnerable adults - so similar profile to security staff. Interviewed in some interesting locations like Sheffield job centre.
I remember the man who told me he had beaten up his wife's lover. Twice. And then could not understand why i had not offered him job. And the man who called me "Love" throughout the interview, bless him.

True,Alison, we don't live in an ideal world but that shouldn't stop us from trying to achieve the best we can. What we need is not the worst of the private sector and the worst of the public sector, but the best of both. Failing to invest in staff and making them feel threatened and undervalued is a recipe for disaster. Every disaffected worker who is off-hand with a customer/client/patient/whatever and every member of staff who texts or gossips or keeps taking breaks or sick leave damages the organisation they work for. Might explain our international uncompetitiveness? Treat people well and most will do their best.
PS agree entirely with Jess about the size of the contract.

Do people resent those working in the public sector? I can't say I came across this either as a teacher or a tax inspector.

The Government constantly repeats its spite at public sector employees so that people are beginning to believe in phrases like 'gold-plated pensions' which are intended to create the maximum amount of envy. HMRC's inefficiency isn't endearing its employees to tax payers either.

Alison my objection to making profit out of 'public' services is that they are funded by public money ie taxes. I object to my taxes being paid to a company who is a profit making organisation. I am happier to pay taxes if it is all going to provide services for the good of society.

If I invest my money privately then that is a choice I make and if someone else benefits financially that is the process I bought into.

Ok - do you want to pay your council to employ gardeners on full benefits all year round? Or would you prefer they spent less money by contracting out this seasonal work. Because councils etc don't outsource because it is more expensive do they?

Greatnan the media is full of people who resent the public sector getting higher salaries and better pensions than the private sector. I'm surprised you've missed that.

Nanaej I take your point but have a different approach to my taxes, I want them to be used to the best effect possible and if that means those in the public sector are most efficient and cost effective with my money then I am happy. On the other hand if my money goes further and is more effective in the private sector then I prefer it to be spent that way.

My approach to my taxes is pretty much the same as to my own money. I want the best value possible for it.

I also think it is a bit misleading to talk about "the private sector" and how hard done by people are. My OH was in the private sector (IT) and believe me the people in his company were on far better salaries, expenses, pensions and share options than anyone I worked with (at a senior level in local government.) I suspect that overall lower-paid staff do (or should that be did) have better pay and conditions in the public sector, but as I have said before, do we really want a race to the bottom?
It seems blindingly obvious to me that if profit, large salaries and bonuses for directors and earnings per share are part of the equation, then less money will go to the workforce.

Some months ago I read that comparable jobs were 30% better paid in the public sector than in the private when all perks were considered. Of course we all know about statistics..............

Of course we don't want a 'race to the bottom' but it would be unreasonable to assume we can afford for everyone could 'race to the top'

There is only so much of our money to pay for things so it should be spent in the most efficient manner.

The problem with outsourcing in the public sector is that it isn't always cheaper and it doesn't guarantee a better service. A prime example is the recent scandal about looked after children placed in private children's homes miles from their local area where they were open to abuse. The fees for these 'homes' are extortionate and many of us in the public sector have been questioning this policy for years. Another example in my own authority has been the breaking up of the fostering service with assessments being carried out by private agencies. The result has been poor quality assessments, no accountability, and carers leaving the authority in droves. I think the idea that services for the most vulnerable can involve a profit motive is wrong on every level.

Well all I can find is 8% better overall from the ONS
www.guardian.co.uk/money/2012/mar/27/public-private-sector-wage-gap-rises
On another statistical site it says that graduates are better paid in the private sector by about 6%.
You also have to be careful of the data about contracted hours. I think my contract said 37 and a half hours per week, but I never worked less than 45 and frequently 60+ (obviously there was no overtime payment).
Salaries at the top of public service are high, but still far less than in the private sector.
I certainly can't see the efficiency in paying people millions of pounds in salaries and bonuses, who then seem to be unable to manage their way out of a paper bag.

Hear! Hear!

It isn't all about the size of the pay cheque. Job satisfaction and feeling valued and useful are as important as pay to a lot of people.