02 November 2001
As Local Government Secretary Stephen Byers announced the 'terms of reference' for the review, concerns were mounting over its long-term implications.
As expected, it will examine allegations of a 'two-tier' workforce – where new staff are paid less than those transferred from local authorities. It suggests potential legislation to 'ameliorate the effect' but will stop short of the fair wages resolution favoured by the unions.
Byers also announced a potential new model of service delivery – public-public partnerships – that will allow high-performing councils to deliver services for failing authorities.
But it is the changes to counter the two-tier workforce that are likely to cause most concern. This is already seen as a measure to placate the unions, and the Local Government Association has privately expressed fears that councils would end up funding measures to force private firms to pay higher wages.
The Society of IT Management's Best Value group is warning that services in areas such as social care, school cleaning and waste collection, which are traditionally outsourced due to poor funding, will become even more expensive as private firms seek to recoup the cost of higher pay.
'This has not been thought through,' said John Serle, chair of Socitm's Best Value group. 'This will constrain local authorities. Money that would have gone on services will go on pay. Private firms will argue that they pay the market rate for the job.'
But Serle added that any changes could also be anti-competitive. 'There are major concerns that this is drifting towards anti-competition and is not addressing what Best Value is about – maximising performance.'
Public sector trade union Unison conceded that any pay changes would drive up the cost of services.
Heather Wakefield, senior national officer for local government, said: 'We believe that Best Value and quality services depend on the workforce being treated properly. It is the engine of Best Value and has to be properly oiled.'
She added that the review also acknowledges that under-funding has forced councils down the route of using the private sector.
PFnov2001
