Labour Market Realities: Public Sector Workers
Figures out today show that unemployment has dropped to 4.7%, the lowest rate since 1975. But in our new series we scratch below these headline and often misleading statistics.
This month we’ve interviewed Chris Morrison, an outsourced civil servant in the IT sector, who has been hit by the double whammy of a pay freeze and growing privatisation. Chris tells us the story of how outsourcing in the public sector has led to a decline in working conditions and created an environment where people are afraid to challenge the bad behaviours of management. Civil servants aren't the only ones under pressure, we recently inteviewed an NHS nurse, who spoke about their unsustainable working conditions, driven by unmanageable workloads and cuts to pay and bursaries.
A quick update of the numbers: firstly, public sector workers have seen a real terms pay cut. Analysis from the Resolution Foundation predicts that the average pay of public sector workers will be £1,700 lower in 2020 than in 2010.
The public sector has also shrunk dramatically. Public sector employment dropped 16% from 6.44m in September 2009 to 5.4m in today’s release. Put differently, it has dropped from 21.1% of the UK employment to 17.1%. Civil service employment has dropped 26.5%, from 566,000 in June 2005, to 416,000 today.
From public to private sector jobs.
A drop in public sector employment doesn’t simply mean the jobs disappear. Sometimes the jobs move into the private sector, with their quality degraded. When workers get transferred from the public to the private sector, they keep their terms and conditions. However, there is no guarantee for new staff. As staff join, workplaces end up with a multiple tiered workforce, with employees doing the same job putting in the same effort, but receiving different pay and conditions.
Analysis by the TUC and the New Economic Foundation found that with comparable public and private sector jobs, the private sector workers were more likely to work long hours, have unpaid overtime, have a shorter term job contract, and earn less. The bottom line is that outsourcing means good quality jobs being replaced by poorer quality ones.
As such, replacing a public sector job with an outsourced private sector job is likely to increase inequalities. For instance, the gender pay gap is also smaller in the public sector then the private sector. The top decile of the private sector is paid 9.4% more than the top decile of the public sector, and the bottom decile of the private sector is paid only 86.1% of the wage at the bottom decile of the public sector.
Outsourcing: what next?
Outsourcing did not start with austerity, but the amount spent doubled from £64bn to £120bn from 2010 to 2015. In that time the number of outsourced contracts rose by 125%: from 526 to 1,185. One forecast estimates that £1 in every £3 spent by government and local authorities on delivering public services goes to private companies.
It’s not just job quality that’s impacted by outsourcing – services can suffer too. In 2010 the French company Atos won a £0.5bn contract to carry out assessment tests determining whether people were fit for work. Their widely condemned service saw as many as 158,300 people wrongly branded fit for work. This was costly, both to the government, but also to the vulnerable people forced into destitution, who saw their health deteriorate, and were stripped of basic human dignity. Department of Work and Pensions statistics show that between December 2011 and February 2014, 2,380 people died after an assessment found they were fit for work.
The government’s outsourcing bonanza negatively impacts job quality. Meanwhile, outsourced services are run by large, profit driven companies who appear unconcerned by service quality. Workers are being hit twice by the same policy: there is a negative drag on job quality, and they have lower quality public services. The government’s idea of an efficient public sector isn’t very efficient for workers and service users. And, as Chris Morrison points out, with jobs under threat very few public sector workers feel able to speak out against bad behaviours they witness because they’re worried about the consequences. This fear alongside on-going public spending cuts means the situation for workers delivering our public services is likely to get worse.