Labour to take on outsourcing companies if it wins election

23 June 2014

If it wins the election, Labour will reduce the role of big outsourcing companies in delivering the government’s back-to-work programme. The Party is also exploring forcing them to pay all workers more than the minimum wage in exchange for Whitehall contracts, as part of their plan to end “business as usual” in the corporate world.
The role of big providers such as Serco and G4S in delivering services for central and local government has grown under the coalition, despite declining public confidence in the sector. Whilst Margaret Hodge, chair of the public accounts committee, estimates that half of all public spending on goods and services goes to private providers.

Shadow work and pensions secretary, Rachel Reeves, revealed that Labour end the current system of big centrally commissioned contracts when the current tranche expired in 2015-16. Alternatively, services would be bought at a more local level, perhaps by local authorities or local enterprise partnerships. She said that they would understand the specific barriers to work that people in their areas face and would already have strong links with local businesses.

By splitting the programme into smaller contracts, Ms Reeves said that the structural problem of the Work Programme, whereby big companies that are able to provide the upfront investment necessary for a schem