Labour Can Take Back Control of Our Local Public Services – By Ending Outsourcing

Private companies have exploited legal loopholes and shunted costs onto the rest of the community, Andrew Gwynne MP writes.
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When I was 21 years old, I became a Tameside councillor in Greater Manchester.

I put my hand up to be a councillor because I believe councils are essential engine-rooms for the public services we all rely upon.

Councils oversee the collection of our bins, they keep our streets clean, and they manage a range of other services, so that we can enjoy parks, leisure centres, and our youth services.

At least that’s how it should be.

The reality is that over the last 40 years our councils have been hacked apart and hollowed out.

A key part of Margaret Thatcher’s agenda of deregulation and privatisation was driven through at the local government level.

Thatcher forced councils to put services out for tender, taking services out of the hands of local staff and into the coffers of large private companies.

The Conservatives in the 1980s and 1990s deskilled our councils, and drained away knowledge that had been built up for generations.

We were promised better services.

Outsourcing hasn’t delivered it.

“This legislation will begin to unwind Thatcher’s legacy at the level of local government.”

Instead it’s delivered dividends for companies like Carillion, which collapsed last year, hurting 30 councils and 220 schools.

It’s delivered lower wages and worse terms and conditions for workers.

Private companies always pitched that they could provide services for less money.

But all they’ve done is make the most of legal loopholes – which mean they aren’t subject to freedom of information and human rights law – and shunted costs onto the rest of the community.

The Labour Party will put an end to this racket.

Our Shadow Chancellor, John McDonnell, and I have published a report setting out a practical plan to enable councils to deliver public services across the country.

The report’s called Democratising Local Public Services, and it is about democracy in our communities.

It’s about allowing councils to control local services once again, building on our earlier commitment to bring PFI contracts back inhouse.

Evidence shows that in most cases financial savings have come from bringing services back ‘in house’.

Direct council delivery of services keeps knowledge within councils, allows services to be strategically combined, and secures economies of scale. As John McDonnell has said, it makes economic sense.

And council delivery of services is better for workers and for the community.

That’s why almost three-quarters of councils are already moving towards delivering services inhouse.

Our Local Public Services Bill will make insourcing the default option as contracts expire or are lawfully terminated.

Where councils want to keep contracting out, they’ll have to prove to themselves that they can answer a series of questions, including that a service will not affect at-risk groups.

If contracting-out does continue, contracts will use a new model contract.

That will lift standards on workers’ rights, human rights and freedom of information, and local supply chains. It will limit contracts to the period of a council’s democratic term.

Having a new model contract will make things easier for councils. Councils can also put an end to complex tendering processes and contract management if they bring things inhouse.

We’re also introducing a package of other supports – access to the Government Legal Department, knowledge sharing, and a rolling calendar review – alongside our existing commitment to provide proper funding for local government.

Social care and the NHS are covered by separate legislation, and so won’t be covered by this policy.

We also acknowledge that some community providers are offering a high quality service, and that some councils face significant capacity barriers. That is acknowledged in the draft legislation.

But I think the Local Public Services Act will be legislation we can all be proud of.

t’s about keeping wealth and value within local communities, which is why we’re releasing the report with our Labour Party Community Wealth Building Unit.

This legislation will begin to unwind Thatcher’s legacy at the level of local government.

It will give councils, those engine-rooms of local public services, the firepower they need to transform the local public services we all rely upon.

It’s legislation that I wish we had when I was a 21-year old councillor in Tameside.

It’s legislation that I look forward to introducing, with John McDonnell, when we have a Labour government.

Andrew Gwynne is the Labour Party’s Shadow Secretary of State for Communities and Local Government


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