10 November 2006
A leading Whitehall contractor was this week accused of breaking employment rules when it announced more compulsory redundancies involving civil service jobs that are being taken offshore.
US-based IT giant Electronic Data Systems was accused by Whitehall's largest trade union of showing 'contempt for UK and European legislation and… acting like a Texas cowboy' in firing members with little consultation.
The Public and Commercial Services union questioned EDS's actions in issuing dismissal notices last week to around 90 staff working on contracts at organisations such as the Department for Work and Pensions and the Child Support Agency.
The union claims that EDS did not follow consultation rules and is in breach of section 188 of the Trade Union and Labour Relations Act 1992.
The PCS has lodged a claim against the company through an employment tribunal, and is consulting over a ballot for strike action.
EDS has denied any wrongdoing. However, the firm confirmed to Public Finance that it is due to issue further redundancy notices to fewer than 100 extra staff next month. Of the total posts affected, much of the work will be moved offshore, EDS sources confirmed. The firm operates administration support services from India.
An EDS spokesman told PF that it was 'regrettable' that the redundancies had been made. 'From a current UK workforce of over 16,000, EDS expects to make a total of less than 250 compulsory redundancies during 2006,' he said.
'Throughout the process, EDS has complied with UK employment law and has sought to work with all employees and their union representatives to mitigate the impact.'
More than half of those 250 redundancies have now been made, sources confirmed, but that figure does not include around 60 staff anticipating dismissals next month.
Civil service organisations have long feared that Whitehall contracts will be moved to cheaper offshore centres.
PCS general secretary Mark Serwotka said: 'We asked EDS for an agreement on the offshoring of jobs last May, which would have given protection to our members, but the company still has not responded, despite sacking members up and down the country.'
EDS sources countered that contractors' capacity to take jobs offshore was restricted by UK data protection laws and that changes to arrangements would be minimal.
DWP loses £3bn and has its accounts qualified
The Department for Work and Pensions this week had its accounts qualified for the seventeenth year in succession, after losses of almost £3bn.
National Audit Office head Sir John Bourn qualified his opinion because of the scale of the losses through fraud, error and overpayments.
At around £2.7bn, they represent 2.2% of the DWP's total expenditure of £124.4bn in 2005/06.
Public Accounts Committee chair Edward Leigh lambasted the department for losing an 'almost unimaginable' sum. 'If this seems like an annual event, that is because it is exactly that,' Leigh said. 'Every year since 1989, the DWP… has had its accounts qualified for losing and wasting too much money.'
But there was more cheering news for the department with the NAO's assertion that 'real progress' was being made in tackling its problems.
According to DWP estimates, there was a £200m reduction in losses through fraudulent income support, Jobseekers Allowance and housing benefit claims. With regard to error, auditors noted that the DWP was strengthening controls on overpayments.
The establishment of the Official Error Taskforce was singled out for particular praise. It was set up to make the benefits system less complicated – a contributory factor to errors. Initiatives spearheaded by the taskforce include an improved management checking regime.
Bourn said: 'The DWP has shown a clear determination to resolve these long-standing problems and early signs suggest some real reductions in the volume of fraud and error can be expected.'
Commenting on the report, benefits minister James Plaskitt said: 'We are greatly encouraged that the NAO has recognised the progress we've already made. We are now concentrating our efforts in reducing error, particularly official error, and will publish our error reduction strategy in the near future.'
Technology fund board to be made independent
Whitehall civil servants will be stripped of powers to allocate research funding, under plans to make the Technology Strategy Board independent.
The TSB will also move from London to Swindon as part of the restructuring, announced by Trade and Industry Secretary Alistair Darling and aimed, he said, at creating a 'relentlessly business-focused' organisation. It will distribute public funds to firms developing productivity-boosting technologies.
Darling's DTI team will create the independent TSB from 2007/08, and the body will assume control of the £178m Technology Programme from next year.
The restructuring was first floated in the 'Science and innovation investment framework', which was published alongside the Budget in March.
The Technology Programme supports 500 projects, worth £750m. Until now, a team of civil servants has decided government funding for research and development for supporting technology projects.
But Darling said: 'The best way to build on the success of the TSB… is to create an executive arm's-length body.'
PFnov2006
