Tendering policy has cost £126m

Commission gives low marks all round to flagship scheme

BY BARRIE CLEMENT

Labour Editor

The state-funded Equal Opportunities Commission angered the Government yesterday when it argued that one of its flagship competition policies had cost the nation twice as much as it had saved.

A long-delayed report on the impact of Compulsory Competitive Tendering in local authorities found that it had hit the pay and conditions of women much harder than men, and, that in the four services covered by the study, it had cost the Exchequer £126m net.

To the further consternation of ministers and delight of Labour politicians, the document also reiterates the commission's support for the introduction of a statutory national minimum wage as a means of addressing the problem.

Neither the cost of the CCT process, nor the call for a minimum wage, was included in the official press release or the "bull points" selected by the commission, but formed a critical part of the report.

There was a delay in publication of the document and internal rows over its controversial content, but the Independent revealed its main conclusions last month and the EOC subsequently decided that the study should be published in full. A hard-hitting "executive summary", obtained by this newspaper, has been completely rewritten by commission officials.

Researchers working for the EOC found that savings from competitive tendering in building cleaning, education catering, refuse collection and leisure management stood at £124m. Yet the cost through loss of taxation and higher social security payments amounted to £250m. The figures in the 200-page report directly contradict the Government's assertion that CCT provides "value for money".

Kamlesh Bahl, chairwoman of the commission, who was concerned about the impact on relations with the Government, yesterday concentrated her attention on a summary of the "gender implications" of the study.

Ms Bahl said the process had resulted in many women losing their jobs, and having their hours and pay reduced. It had also resulted in an increase in temporary and casual work, and "a general worsening of their terms and conditions of employment."

One local authority manager, quoted in the research, declared that CCT had been a "tragedy" for women.

The Transport and General Workers' Union yesterday said it would urge the European Commission to launch legal proceedings under equality laws against the Government unless the competition system was abolished.

Basic rates for the lowest paid had decreased from about £3.80 to £2.80 an hour, according to the report's authors, Karen Escott and Dexter Whitfield of the Centre for Public Services.

The commission fought shy of recommending the abandonment of CCT, but advised that race discrimination laws should be extended to cover gender equality, and that the rules should be imposed on all bodies providing services to the public. Meanwhile, equal opportunities should be a key measure in the selection of successful bids. The Government should also eliminate inequalities in the national insurance system.