11 January 2002
The review, launched in October and including representatives of the unions, the private sector, the Audit Commission and local authorities, was due to conclude before the end of last year.
But insiders said negotiations had failed to get past even the first stumbling block of employment issues, despite the wide-ranging 'terms of reference' published in November.
The issue of the two-tier workforce, where workers who join after services have been contracted out are given poorer pay and conditions, is believed to be the major bone of contention. Sources close to the review, chaired by local government minister Nick Raynsford, told Public Finance that all sides had now acknowledged the problem, but the private sector was unwilling to agree to legislation to outlaw the two-tier workforce, stating that it would impinge on 'flexible market practices'.
Private sector representatives, including the Confederation of British Industry, are pushing for a voluntary code but unions are adamant that there should be legislation and a fair wages resolution. Local authorities remain cautious and are wary of any additional costs.
But ministers are understood to be largely sympathetic to the unions, with Local Government Secretary Stephen Byers already announcing that he would act on the problem should evidence be found.
The pressure for agreement is growing. Byers is already under attack over transport problems and has made it clear he wants to announce the results of the review at the Labour Party's spring conference on February 1 to meet his implementation deadline of April.
Sources said the deadline was tight, with little ground made over employment issues in December. 'We are hoping for the best but planning for the worst,' the source said. 'The key now could be the Local Government Association.'
LGA chief executive Brian Briscoe said he was due to meet with Raynsford at the end of this month to see 'how he was minded'.
'We are in the middle of the argument. We want economy and efficiency but also improvement in performance,' he told Public Finance. 'We need flexibility from both sides and help to find a compromise from both sides.'
PFjan2002
