Unions are predicting a huge return to in-house contracts in
social care following an agreement to eliminate the “two tier”
workforce created by privatised council services,
writes Craig Kenny.
But local authorities have warned of the cost implications
associated with the government pledge that new staff in
contracted-out services have pay and conditions that are “no less
favourable” than those of transferred staff.
Unison’s social services officer Owen Davies said
thousands of social care staff in contracted-out services would
benefit from the deal.
“There’s been a huge contracting out of social care
services which has driven wages down. Well over half of domiciliary
care services are contracted out because of the enormous cost
pressures on local government to find cheaper alternatives.
“Residential care is the worst. Except in the south and south
east, where it’s hard to recruit, the minimum wage is the
norm,” Davies added. He predicted that a lot of contracts would
start to come back in-house “because the private sector will no
longer see public services as a rich place to pick up profits”.
Existing staff have their terms and conditions protected when
services were contracted out under European TUPE (Transfer of
Undertakings, Protection of Employment) regulations. Previously,
private employers were only required to give new staff “broadly
comparable” terms. Under the new agreement, they will be obliged to
offer new staff terms that are “no less favourable” than those
offered to transferred staff.
The agreement has angered the Confederation of British Industry,
which has accused the Government of “capitulating” to union
City law firm Trowers &Hamlins warned that the “radical”
change would be a “real concern” to Private Finance Initiative
(PFI) employers. “Arguably it restricts the private sector’s
ability to deliver services in the most efficient manner,” they
The Employers’ Organisation, which represents local
government, said the new guidance “could have important
implications for the costs and nature of contracts”.
But they added that “no less favourable” did not mean “the
same”: “Contractors will be able to offer different packages of
terms and conditions so long as overall they are not less