The Trades Union Congress has warned ministers that unless they tighten up rules governing the awarding of taxpayer-funded contracts to private companies they risk a repeat of the Post Office scandal.
The union body said that last October’s Procurement Act was a “huge missed opportunity” to tighten up rules. In particular the unions, Labour and the Liberal Democrats all called for the Act to ensure that private companies delivering a public contract are subject to freedom of information requests. But this was not incorporated into the legislation.
The TUC also reminded ministers that in the Post Office scandal ruling of 2019 Judge Fraser found that proper union representation, independent from the Post Office, could have averted some of the worst outcomes for subpostmasters.
The TUC argued that such a provision would have helped uncover the scale of the problem with the Horizon software far earlier. Having a freedom of information duty would have made it far harder for Fujitsu and the Post Office to make false claims about the sub-postmasters accused of mishandling money.
Post Office scandal and outsourcing
The psychology of the Post Office Horizon scandal
Unions also called for the establishment of a new statutory body with a specific mandate to assess value for taxpayers’ money for publicly-awarded contracts.
This call was also not incorporated into law. The TUC said the lack of an independent oversight body with investigatory powers allowed the Post Office and Fujitsu to stonewall whistleblowers and hide from scrutiny.
In terms of the need for greater transparency and value for money, the TUC said the collapse of the outsourcing giant Carillion showed that public services needed to be run in the public interest, not for profit.
The union body said the widespread outsourcing of public contracts has led to a race to the bottom on workforce pay and conditions, and despite a “catalogue of outsourcing failure” the government had no programme to return outsourced services back in-house. The TUC said it wanted a “public interest” test to be applied when public services are outsourced.
In addition, unions proposed that the Procurement Act should enable workers to seek compensation and redress if they were mistreated during the delivery of a public contract. This was also rejected by the government.
According to the TUC, the Communication Workers Union (CWU) was blocked from effectively organising at the Post Office.
The Post Office set up and funded the rival National Federation of Sub-Postmasters (NFSB) – providing over £20 million in funding over the past 15 years. But, as established by the High Court’s Post Office 15 March ruling in 2019, the Post Office “effectively controls” the NFSB. Judge Fraser said: “The NFSP is not remotely independent of the Post Office, nor does it put its members’ interests above its own separate interests.”
TUC general secretary Paul Nowak said: “Things cannot go on like this. The government must take urgent action to beef up UK procurement laws. October’s Act was a huge missed opportunity.
“And ministers must call time on failed outsourcing. Public services should be run in the public interest, not for profit.”
The government has been contacted for comment.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Latest HR job opportunities on Personnel Today
Browse more human resources jobs
