My Lords, I support Amendments 98A, 98B and 98C. Among other things, the Bill is designed to facilitate the outsourcing to private contractors of NHS services currently carried out in-house. That is the Government’s policy for the NHS, although it is firmly opposed by most of the citizens of this island.
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These are topical amendments, since it has been announced today that 1,800 Serco workers will be brought in-house at Barts Hospital and put on NHS terms and conditions. The amendments would protect NHS workers from the consequences of the policy of outsourcing. Usually when public services are outsourced, the contractor makes a profit by reducing the number of staff performing the work formerly done in-house and by cutting staff wages, terms and conditions. The Transfer of Undertakings (Protection of Employment)—TUPE—Regulations mitigate that process but usually only by delaying it. TUPE also fails to protect when contractors subcontract parts of the operation or hire new staff on new terms and conditions.
Amendment 98A would prevent cuts to the wages, terms and conditions of NHS staff who are outsourced and prevent contractors hiring staff on worse terms, thereby undercutting in-house staff. It does so by requiring that the pricing rules for paying contractors must preserve, then and for the future, the going NHS staff rates, terms and conditions, as negotiated from time to time between the NHS unions and NHS Employers. Payment of those prices would be dependent on honouring those terms.
In Committee, the Minister rejected the need to protect NHS staff in this way, saying that the NHS remained committed to Agenda for Change, which is the name given to the current collective agreement, but he further stated:
“Independent providers will remain free to develop and adopt the terms and conditions of employment, including pay, that best help them attract and keep the staff they need”;
in other words, nationally negotiated terms and conditions for NHS staff which have applied since the founding of the NHS are to be abandoned. Those who work in the outsourced parts of the NHS are to be thrown to the wolves.
It is not just national terms and conditions that are to be jettisoned for those NHS staff but their ability to be collectively represented at all. Let us not be in doubt that their terms and conditions will be fixed unilaterally by the new provider on a take it or leave it basis. Their collective voice will be silenced. The Minister acknowledged that when he went on to say:
“However, we expect that good employers would set wage rates that reflected the skills of their staff”;—[Official Report, 26/1/22; col. 402.]
in other words, each employer will set the rates unilaterally in accordance with market forces at the lowest possible level that the staff will tolerate. There will be no trade union representation. Of course, the undercut rates for the outsourced staff will be used to resist higher wages for those lucky enough to be retained in-house. This is a lose-lose situation for the staff, although no doubt the privateers will make their profit. Our NHS, already sustained on cheap labour and the good will of its heroic staff, will become an even greater exploiter of labour. This will be a disaster for patients too.
The fact is that NHS staff are grossly underpaid, and the real value of their wages is falling. After years of pay freeze, last year’s miserable 3% increase is being destroyed by an inflation rate of 6% this year. The inadequacy of their terms and conditions is the prime reason for the extraordinarily high level of vacancies—93,000 at the end of last year—which increases as more work is done by fewer hands. A catastrophe looms.
Briefly, Amendments 98B and 98C are intended to ensure that the unions are among the consultees on the likely impact of payment schemes. I am grateful to the noble Baroness, Lady Brinton, for her support for that proposal. The Minister sees no place for unions in setting the terms and conditions of external providers, so it is even more vital that trade union consultation is made an explicit requirement of the pricing process. This is particularly so given that the providers themselves are to be consulted on the prices they are to be offered—in stark contrast to the workers, under the current draft. I hope the Minister will agree to modify these provisions accordingly.