A hell of a lot of waste goes on in public services

How do we stop the carpet-baggers running off with the silver?

It is fashionable, these days, to refer to the state as a commissioner of services rather than a provider. From health to education, maritime rescue to employment services, the state - in the form of local as well as central government - is commissioning the services it once provided.

Inevitably, the people once responsible for managing a service are stepping back from the frontline and learning how to navigate the tendering and procurement processes that are part and parcel of spending taxpayers' money.

But, according to the OECD, “the volume of transaction and the close interaction between public and private sectors create multiple opportunities for private gain and waste at the expense of taxpayers”. Minimising the risk of fraud, corruption and mismanagement of public funds requires “transparency throughout the entire public procurement cycle”: taxpayers and service users are better protected when the public can help public servants hold private providers to account.

So how does the hands-off approach that seems to be commonplace in the UK help make sure public money is delivering public gain?

A survey by the OECD shows the UK is the only country out of 34 major economies that does not allow the public to see information about the selection and evaluation criteria. This means it is difficult to know if the recipient of public money is spending it as agreed. Nor does the UK reveal tender documents and only sometimes will it justify its decisions. And, if contracts are modified after being awarded, there is no policy to reveal this to the public.

At a local level this has the effect of taking power away from the local commissioners who, when they can see money has been spent on failed promises and missed targets, should be demanding delivery or remedy.

Just look, for example, at the myriad organisations that have sprung up to provide employment related services to local authorities. The range of services and the variety of programmes is befuddling and with no possibility of public scrutiny, local authorities are on their own when it comes to trying to hold their private-sector providers to account.

This is not a case of big companies muscling-in. Small, so-called “social enterprises” are involved too. With colourful stories and fresh-faced bravado they sell their services with, it would seem, no hope of delivery.

For the Newhams, Tower Hamlets and Southwarks, for example, this must be deeply frustrating: knowing they have paid out, have received nothing in return and face months of arguing and unaffordable legal bills if they try to recover their money. This is nothing compared to the impact on taxpayers, let alone the people that should have received the support and help that was offered, paid for and never delivered.

Perhaps public services need public scrutiny to help our remaining public servants stop the carpet-baggers from grabbing the silver. At the moment they seem pretty ineffectual but I would argue that it’s not all their fault.

Photograph: Getty Images

Spencer Neal is a reformed publisher who now advises on media and stakeholder relations at Keeble Brown. He writes about the ironies and hypocrisies that crop up in other peoples' businesses. He is also an optimist.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.