BUSINESSIS AFTERYOURJOB

NATIONAL UNION OF PUBLIC EMPLOYEES

Privatisation is a Tory strategy for more wage cuts, more redundancies,more permanent job loss, and a further decline in the quality of publicservices.ALL services are threatened. It's not just a few councils hiving off

refuse and cleansing (see panel). Local government is already riddledwith contractors in a wide range of services eg housing, catering.It is BIG business. The total value of the contract cleaning market

alone is estimated to be £2500 million each year. Local authorities,government departments and nationalised industries spend £ billionseach year running public services. And it is the BIG firms, the multi·nationals, who are trying to grab more and more of this work.The Tories are seeking to completely restructure the social services

and our national health service. For example not only are theyencouraging the growth of private medicine but are also consideringswitching the present state funding of the NHS to an insurance basedscheme, and increasing the role of private firms - contracting out ofhealth services increased 30% in 1980 alone.

Don't be fooled into believing thatprivatisation is about increased ef·ficiency, more value for money. orcutting out waste. Privatisation is acentral part of the Tories econom ic andpolitical strategy because it means -• cuts in wages, benefits and workingconditions - or it is used as a threat toget public employees to re·negotiate thehard won gains of the last 30 years.• reducing the strength of the tradeunion movement - few firms in theservice sector have unionised workers.• lowering standards and expectationsof public services - the worse they getthe more people are disenchanted and

are forced to turn to private services.Further privatisation can then takeplace as there will be fewer willing todefend public services. Ultimately publicbodies could be left running only thoseparts of services which private fi rmsdon't find profitable and providing thebasic services and subsidies which firmsneed to operate.

.creating new markets for privateindustry - more firms will increaseprofits - Thatcher can claim the econ-omy is recovering - but it will be on thebacks of public sector workers - that'swhat they mean hy "roll in9 back thefrontiers of the publ ic sector".

What isPRIVATISATIONFull privatisation is the sale, lock,stock and barrel, of publicly ownedand run services to private com-panies. Planned sales include NationalFreight, British Rail's Sealink Ferriesand hotels, 13 Royal OrdnanceFactories, Amersham Internati onal,75% of its radioactive isotope prod-ucts are used in health care.

But the Tories are also privatisinggovernment departments, nationalisedindustries, the NHS, and localauthority services by -Hiring private contractors.to fun services, sacking publicemployees and taking over directlabour, central administration and/or management functions. Theseinclude refuse and cleansing, buildingrepairs, school meals, architecturalservices, transport and vehicle repair,sports facilities, highway mainten-ance, crematoria, legal and financialservices, school cleansing, laundries,ambulance services, parks and gardens.Sale of assets• council homes, gas showrooms,motorway service stations, heavygoods vehicle testing stations, over£300m of land and property in theNew Towns.Sale of shares• large stakes in British Aerospaceand Cable and Wireless alreadysold to speculators on the StockExchange. British National Oil Cor-poration, British Telecom, NationalBus and British Airways next in line.Allowing firms to exploit publicservices• the state provides the expensivebits while firms exploit the profitableparts eg private phones sold foruse on British Telecom's network,Iicences to coach operators tocompete with National Bus on theprofitable inter city routes, firms touse British Gas pipelines to supplybig industrial users, even postagestamps will soon be sold fromprivate vending machines - a 46ppack of stamps will cost 70p!

BUSINESSBig business is after your job. Someof the companies now competing fortenders are small independent companiesbut the main ones are subsidiaries ofmajor multinationals eg Biffa whichrecently won the North Norfolk refusecontract is part of the giant BET Group(nearly £1000m annual turnover). BETalso owns Advance Services and has alarge stake in Initial Services bothleading industrial cleaners, as well asRediffusion and a host of companiesaround the world.

Brengreen which includes ExclusiveCleaners is small (annual turnover£25m) compared to Grand Metropolitan,now clearing refuse in Chelsea, whosepre-tax profits last year totalled £187m.

The large multinationals can afford 'lossleaders' in tendering for contracts.Pritchards' Wandsworth street cleaningcontract was 16% lower than Brengreen's.Multinationals will also take on relatively

small contracts in order to gain entranceto a largely untapped field of business.A Biffa spokesperson stated "Thecontract (North Norfolk) is worth onlyaround £650,000 but it is importantbecause it opens the door to localauthority privatisation a little wider".

Some companies like Pritchards ServicesGroup (subsidiaries include Crothalls,Cleaners Ltd, London Store, UnitedLinen) provide a wide raQge of thoseservices threatened with privatisationeg health care services, cleaning, buildingmaintenance, security. Pritchard's turn-over has trebled in four years - mainlyby diversifying and takeovers here andoverseas. They now have the LondonUnderground cleaning contract as wellas stakes in companies with £395mcontracts to clean Jeddah and Riyadh inSaudi Arabia. They operate in SouthAfrica with security companies called'Night Hawk Patrols' and 'Cape NightWatch Services' and 15 other countries.

JOBS, SERVICES&USERS

• compulsory redundanciesand permanent loss of jobs

• less pay for longer hours• reduced sickness benefits

and pensions• shorter holidays• less job security - hiring

and firing• less training• inferior health and safety

conditions• little or no trade union org·

anisation

40,000 local government jobs are nowlost annually because of spending cuts-privatisation will accelerate this job loss.In Southend 66 jobs were permanentlylost, another 35 in Wandsworth. Con-trary to all the ballyhoo in the media,workers are worse off employed bycontractors. Pritchards, who took overstreet cleansing in Wandsworth, have nopension scheme, 3 weeks holiday insteadof 5, sick pay is a pale image of thecouncil's - 4 weeks instead of 6 monthsat full pay.

Contractors basic wage rates sometimeslook better than the publ ic sector butthe basic wage is the wage - there isoften no opportunity for bonus, over-time or extra payment for unsocialhours.

• fewer job opportunities fordisabled

• higher personal charges forservices

• higher rents• poorer quality service• less responsive to chang·

ing social needs• longer waiting lists for old

peoples homes, repairs,hospitals etc

• services you cannot rely on• less opportunity to control

services

Contractor's claims that they can makesubstantial savings, thus benefiting rate-payers, are a myth. Exclusive Cleanershave claimed 'savings' of £492,920 inSouthend but a detailed analysis com-paring like with like has shown that thetrue figure is only £707 per annum.When the £472,000 redundancy pay-ments to the council workers, £50,000annual council supervision costs, and thecut price vehicle repai r service providedby the council are taken into accountthe 'savings' turn into suhstantial losses.Bracknell, Barnet, Bath, West Lindseyand other councils have found con-tractors to be more expensive.

Privatisation also means hiving offassets like vehicles, depots, plant and

But with the Crothall's subsidiary, halfits turnove.r is from Australasia, andthe recently acquired National MedicalConsultants in the USA, Pritchards areaiming for a slice of the £300,000million world health care market. Theyalready have service contracts with 350hospitals in America, Britain, Kuwait,Australia etc.

They face big competitIOn from theAmerican health care multinationalslike Humana Corporation, AmericanMedical International and the HospitalCorporation of America (HCA) whoalready have a foothold in Britain. HCA(turnover £1000 million) already ownsor manages 350 hospitals worldwide andis currently trying to develop privatehospitals in London and Southampton.A US financial analyst states "Weenvision that during the next decadethey will expand into multinationalgiants".

equipment. Once contractors are inthey have the council over a barrel andwill then put in maximum claims forcontingency sums and increases forinflation. Just look at how privatebuilding contractors exploit publicbodies with massive claims for over-spending, shoddy work, walking offthe job and bankruptcy if the job getstoo difficult and profits are squeezed,leaving direct works departments topick up the pieces. Is this what we wantfor the rest of the public services?

Privatisation means higher charges forusers. Trade, schools and garden refusecharges doubled overnight in Southend.This has encouraged 'cowboy' refusecollectors trying to undercut Exclusive.

PUBLIC SERVICEIS so IMPORTANTPublic services are -

• aimed at meeting social needs asopposed to the demands of themarketplace and private profits. Thepublic sector has grown mainlybecause of the failure of privateenterprise to provide essential ser-vices eg housing, health at reasonablecost and to invest and plan for futureneeds. The coal industry, railways etcbecame publ icly owned becauseprivate industry had failed - ownersand shareholders creamed-off profitsand the state took over investment-starved and outworn industries.

• able to achieve higher standardsof service and employment thanprivate firms and can be moreresponsive and flexible. Money andprofits are what determines thequality of service for private firms-they are much more likely to cutcorners, do patch up repairs. Working

With public bodies at the mercy ofcontractors it can only mean higherrates and rents.

A recent survey by the Association ofHealth Service Treasurers found that theuse of contractors led to -

• constant disagreements on standardsof service.

• a rigid service is provided becausefirms stick to the letter of the contract.

• difficulties in controlling contractor'swork.

• contractors don't fit into the team-work essential to health and socialservices.

for the public services can giveworkers a greater sense of satisfactionand achievement - many do so as a'sense of duty' although this is oftenexploited with low pay.• are cheaper for the same rangeand quality of services and the samepay, benefits and working conditions.Private firms can usually only under-cut the cost of public services byoffering fewer workers less pay,inferior benefits for longer hours,increasing charges for users, andusing public facilities eg depots,repair services at subsidised rates .• less wasteful than the privatemarket and more efficient useof resources et bulk buying andavoidance of wasteful advertising -who will pay for Exclusive's £%m ad-vertising campaign and the £150,000payout to an ex-di rector?

• are accountable directly to thepublic through council committeesand elections. There is the potentialfor public service workers and usersjointly gaining more control over therunning of services. Private firms areaccountable only to their share-holders - increasingly City Financiersacting on behalf of banks, insurancecompanies, pensi?n funds.We say less expensive and less waste-ful because there are many aspectsof public services which need to beradically improved by implementingthe justified demands of workers andusers. The answer lies in improvingservices within the public sectorand increasing investment in publiceducation, health, housing, transportand social services.

S k . Photo: James Lauritzome ey pomts -

• Privatisation is a politicalattack on public service and can·not be fought by traditional tradeunion action alone.

• It directly affects workers,the services and users and istherefore an increasingly impor·tant issue for all sections of thelabour movement.

• It cannot be fought bysimply defending existing ser·vices or adopting defensivetactics - these must be part of astrategy to improve and expandpublic services and part of acounter offensive against privatecontractor's existing work withinthe public services.

• We can't and shouldn't try tooutbid the contractors - thatmeans getting into a job loss-wage cutting downward spiral.Instead we have to campaign andnegotiate for good quality, widerange services to meet socialneeds; decent pay, benefits andworking conditions; and moreworker and user control in runningservices. Contractors cannotcompete on these terms.

• Don't wait till privatisation isthreatened or contractors arecourting councillors and officers- by then it may well be too late.Remember that all services arethreatened and that includes notjust direct labour but centralservices and administration aswell as management. If its themtoday - tomorrow it could be you.

• Privatisation can onlyeffectively be fought by jointaction both within and outside theworkplace. It cannot be separatedfrom the fight against the cuts northe struggle to obtain a decentliving wage.

• Constant education andpropaganda is needed to exposethe contractors, to counterattacks on the public services inthe media, and to build public sup·port for public service.

I

A strategy must include these 7 keyparts:• developing alternative ideas and

demands to improve services• education and propaganda• building stronger workplace organis·

ations and links with workers in otherboroughs• developing joint action and user

committees with PTA's, tenants groups.• tactical use of industrial action and

negotiating machinery• direct action by workers and users• counter offensive against existing

contractors in public services

Action and organising tactics could'1 include:• start examining ways of improvingservices, rooting out deficiencies, ex-posing the effects of the cuts, howservices could be expanded to eliminateexisting contracting out.• preparing and distributing infor-mation and propaganda to users ofservices about why public service is

'1' important, why and how it could beimproved; within the workplace about

. what contractors will mean for jobs,wages, benefits, conditions, standardsand control of service; general publicitymaterial countering contractors claimsabout how they can improve efficiencyand more economical use of publicmoney. Each workplace should prepareits own material - it is important to getworkers involved as well as users. Con-tractors are already flooding councillorsand officers with thei r propaganda.• improve links with and send speakersto other labour movement organisationslike trades councils, tenants groups,Labou r Party, women's groups, PTA's,unemployed action groups. Try to set

MONITORING1. Beware of proposals to ' restruc-ture' departments - often by usingoutside consultants or work studyofficers.2. Examine the scale of existingcontracting out within your work-place - ask yourself is it necessary,has it increased recently, what kindof work is done by contractors, arethere complaints about standards,which firms are involved, how dothei r wages, benefits and conditionscompare to yours, how does theauthority supervise the work etc.3. Oppose and publicise if there is ageneral rundown - repairs not beingdone, equipment not replaced - is

up joint worker/user committees eg athealth centres, with DLO buildingworkers and tenants.• set up a joi ng shop stewards com-mittee (JSSC) covering all departmentsand sections if this doesn't already exist.Make I ,ks with JSSC's in other boroughsanrl cities..find out the attitudes of individualcouncillors - the Tories are often spliton the issue of privatisation and youcould try to widen this.

CONTROLLINQTHE CONTRACTORS• Try to negotiate a guarantee that alldepartments first try to place all workwithin the authority or other publicservice before going out to tender.Demand that any contractor can onlybe used by agreement with the union.• Work out ways in which the authOritycould get the resources, equipment andexpertise to do the work itself.• Make sure that comparisons betweenpublic sector and private firms comparelike with like - this should cover thestandard of work, costs of supervision,quality of materials, wages and benefits,cost of loans still being repaid etc.• Insist that council contracts withprivate firms specify that they covertrade union recognition and negotiatingrights, a set percentage of apprenticesand training scheme, health and safetycodes of practice, pol icies against sexualand racial discrim ination, pay and

conditions, penalty clauses against thejob not being completed or to the setstandard, and are fully charged for theuse of council premises, phone andother facilities. It is equally crucial toensure that the authority has theresources and political commitment tocarry out constant supervision of thesecontract clauses.• Argue, in the Treasury's own words,that "value for money should not bejudged solely on the basis of the lowestinitial cost. Design, reliability and main-tainability for example will affect thetotal cost over the Iife of a product."

• If contractors are introduced thenyou could take industrial action untilthey are removed, adopt a pol icy of non-cooperation by refusing any assistanceor advice, refusing to allow them theuse of the authorities' equipment or tomake good any inferior work.

this the effects of cuts or a plan toreduce the effectiveness of publ icworkers and preparing the ground forbids by contractors.

4. Fight press campaigns to discreditthe workforce eg claims of massivewages like the £14,000 a year care-takers, or hours not worked etc.

5. Oppose divide and rule tactics bymanagement - privatisation is oftenpreceeded by management promisingindividual workers bigger wages fromcontractors, promises of promotion,spreading fear about the loss ofpensions or reduced redundancy pay-ments if workers oppose contractors.

• at the first hint of contracting out oruse of consultants - don't wait! - startby calling a mass picket and lobby ofcouncil meetings and follow this upimmediately with other action.

It is these types of activities which areessential to build a more unified work·force and stronger links with users andthe rest of the labour movement - and iessential to build the necessary supportto take other action eg industrial action,occupations, picketing, boycotts andnon-cooperation with contractors etc.

Published by NUPE: London Division13/15 Stockwell Road, London SW9Tel 01-737 2011Research and design: SCAT Publications27 Clerkenwell Close, London EC1

February 1982

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