24 February 2006
Whitehall's largest department was this week accused of meeting its crucial job cuts target and efficiency savings by transferring staff to private sector partners who immediately make them redundant.
The Public and Commercial Services union said the Department for Work and Pensions had reneged on a commitment to avoid, if possible, compulsory redundancies in order to fulfil its 30,000 job-cuts target by 2008.
In a letter sent to Work and Pensions Secretary John Hutton, and obtained by Public Finance, the union's DWP group president, Jane Aitchison, accuses the department of knowingly transferring staff 'directly into a compulsory redundancy situation' as part of the privatisation of its record storage service.
Under the DWP's seven-year contract with services company Capita, signed in 2004, the department plans to transfer a further 140 staff to the private firm by March 2006. The contract is intended to cut the number of storage sites from 44 to three.
More than 700 of the 850 DWP staff affected have already been transferred under the deal, or offered alternative work within Capita and the DWP. But the PCS claims Capita now has no work left for those who have yet to transfer.
'In the past few weeks, 23 staff have transferred, under a Tupe transfer, from DWP to Capita. Capita immediately declared a redundancy situation and, after a brief period of consultation, made all the staff compulsorily redundant. The same is expected to happen to the remaining 120 staff due to transfer to Capita,' Aitchison's letter states.
'We are extremely concerned that DWP appears to be using privatisation as a means of reducing its staffing head count in this way,' she adds.
Charles Law, a PCS representative, told PF: 'Another big question for us is “who is funding the redundancy packages”? We have asked both parties to explain, as it would not represent an effective use of taxpayers' money if the DWP had assumed redundancy costs.'
Aitchison has asked Hutton to clarify this issue in his response, which the DWP confirmed was due to be sent this week.
Correspondence from former work and pensions secretary David Blunkett to the PCS last summer claims that the terms of any severance packages for transferred staff 'would be the same as would be available for any other member of staff' at the DWP.
But Aitchison's letter claims that 'Capita are paying severance terms different to that available to DWP staff'.
In a joint statement to PF, the department and Capita said: 'Tupe protects the terms and conditions of staff, although in some instances private sector suppliers cannot replicate DWP terms, so instead provide comparable ones.'
Capita claimed that some staff opted for redundancy rather than accept alternative posts within the company.
The joint statement reads: 'It was recognised at the outset that not all staff would want to transfer to the new supplier… [and] given the reducing head count in the DWP, no guarantees could be given that posts would be found for all staff who did not wish to transfer.'
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