2012 Annual TUC Congress briefing - the wrong agenda for public servicesSeptember 2012
The Agenda for 2012 Annual TUC Congress makes two arguments:
· Private sector companies should not provide any public services.
· Public services should not be subject to any cuts in funding and headcount. By implication, they should be protected from change.
Private sector delivery
The evidence shows that all political parties are right to explore the use of the private sector to deliver public services. The majority of the cost of public services lies in the workforce, and the private sector workforce has a much more productive employment record and culture. The public sector workforce is characterised by:
· Higher pay. In 2011, public sector workers were paid an average 8.2 per cent more per hour than private sector counterparts.
· Pay determined by length of service. Only 21 per cent of private sector service organisations pay according to length of service, compared to 71 per cent of public sector organisations.
· Pay according to a pay spine. Only 10 per cent of private sector service organisations operate a pay spine, compared to 77 per cent of public service organisations.
· Pay negotiation by collective bargaining. Only 12 per cent of private sector service organisations base their pay on collective bargaining, compared to 59 per cent of public sector organisations.
· Fewer hours worked. In 2011, public sector employees worked three hours less a week on average than private sector counterparts.
· More generous annual leave. 80 per cent of public sector staff received 25 or more days annual leave a year, compared to 55 per cent of private sector staff.
· Less frequent turnover. In 2012, 10 per cent of public sector workers changed jobs, compared to 16 per cent of private sector workers.
· Poor management skills. 64 per cent of public sector organisations report that their managers lack skills for managing change, compared to 34 per cent in the private sector.
· Higher sickness absence. Public sector workers lose 9 days per year in sickness absence, compared to 7 days for private sector workers.
Contrary to the TUC Congress agenda, there are excellent examples of private sector delivery of public services.
· In the Spanish region of Valencia, for-profit companies provide all healthcare for 20 per cent of inhabitants. One provider provides outpatient and elective surgery between 8am and 9pm on weekdays and on weekends. The normal opening hours in Spain are 9am to 3om on weekdays. The overall cost of healthcare is 25 per cent lower than the public sector equivalent, at the same level of quality.
· The private company Cambridge Education @ Islington has transformed the provision of education services in Islington since 1999, when it took over the contract from the local education authority. Taking the whole period from 2000 to 2010, Islington’s GCSE results have nearly caught up with the national average, having once being amongst the worst.
· The highest patient satisfaction in the NHS eastern region has been achieved at Hinchingbrooke Hospital which is now managed by the for-profit company Circle Healthcare.
Need for change in the public sector workforce
There are excellent examples of reform in the public sector workforce too. Typically, public sector leaders have reformed public services by changing the workforce, including by reducing headcount.
· Fire and Rescue Services such as Merseyside and Manchester have seen dramatic falls in fires and fire deaths at the same time as reducing numbers of front line firefighters. Between 1997 and 2007, Merseyside FRS reduced the number of full-time firefighters by 38 per cent, from 1,500 to 880. The number of accidental fires in the home fell from over 2000 to 1,300 in the same period. The change was achieved by a shift in the focus of the Service towards fire safety.
· Denbigh High School in Luton transformed its performance by introducing a new continuous professional development programme for staff. In 2010 100 per cent of 16-year-old pupils achieved five GCSEs at grades A*-C, compared to 27 per cent in 1997 when the new training programmes were introduced.
· The highest staff satisfaction in the NHS in the last two years has been seen at Salford Royal NHS Foundation Trust. Salford Royal has pioneered the reform of its workforce through performance-related pay and by publishing data on the standards of care ward by ward.
· The Government and public service leaders should reject the agenda of the Annual TUC Congress.
· They should explore further opportunities to open public services to competition, including the for-profit sector.
· The Government should support public service leaders who wish to change their workforces, including the varying of headcount and terms and conditions. It should recognise that major improvements to public services typically involve radical reform of the workforce. The Winsor Review of the police workforce has successfully brought forward new thinking for a more flexible police force. The health and education workforces would benefit from similar reviews.