Privatisation doesn't balance the books

Labour needs to get serious about its insourcing promises, but as recent threats to jobs at the British Library show, public-sector workers still face threats to jobs and conditions, argues FRAN HEATHCOTE

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OUTSOURCING of public-sector work began in earnest with the Thatcher government and has been the default ever since. It was a fundamental part of neoliberalism — to privatise, liberalise and deregulate — allowing the market to dominate more and more of public life.

Andy Burnham became Prime Minister earlier this year promising to “end 40 years of neoliberalism.” At Labour Party conference, Louise Haigh — appointed First Secretary of State — announced the creation of an insourcing unit, “tasked with co-ordinating departmental insourcing activity, unblocking barriers to delivery, and identifying cross-government opportunities to maximise value.”

In recent days, about 200 of our members have been faced with the prospect of their jobs being outsourced.

In the heart of London, 66 security guards at the British Library have been told they will transfer from direct employment to a private security firm, STM Security, on December 1. This is unacceptable and our members are serving notice that they will ballot for industrial action against this transfer.

Alongside the outsourcing of our security guard members, the British Library is also proposing to privatise reading rooms used by undergraduates, postgraduates, researchers, academics, writers and journalists for use as paid co-working space — which is also a betrayal of the library’s vital role as a public service and resource.

A banner outside the British Library invites people to “work in our spaces” and promises “inspiring spaces for whatever you’re studying or working on.” These opportunities for students and others will be taken away under these proposals.

A petition against the privatisation of security staff and the reading rooms has already been signed by 14,000 people.

To add insult to injury, our reps have also been told by STM Security that their application to be admitted to the Civil Service Pension Scheme has been approved by the Cabinet Office.

The same Cabinet Office that was boasting about the introduction of its new insourcing unit at Labour Party conference. Perhaps the left hand needs to be introduced to the right hand.

Separately, at the Student Loans Company in Glasgow, over 100 workers face their work being outsourced to CapGemini — which says it may also outsource some of the work to India.  

When Andy Burnham said he wanted “growth in every postcode,” we hadn’t realised that extended to Mumbai.

PCS is proud to be part of the Insource Now! campaign, working with Unison and the RMT — and we will together hold this Labour government to its commitments for the “biggest wave of insourcing in a generation.”

As the Common Wealth research commissioned by the campaign showed, the public sector spends an estimated £129 billion on outsourcing of public services, 11 per cent of all public spending — with the total operating profits private companies made from public service contracts standing at £6bn.

The cost of this profiteering is felt in lower pay, worse terms and conditions, and most often in worse services to the public — just look at the shambles of the Capita contract to (mis)manage Civil Service pensions, which has left people without payments for over a year in some cases.

Prolonged industrial action has secured thousands of jobs being brought back in-house in facilities management (security guards, cleaners, caterers) across Whitehall, and thousands of members previously outsourced from the DWP have recently been brought back into the DWP.

PCS will continue to fight for its members against the two-tier workforce that outsourcing creates, and hold this government to its commitments on insourcing.

Ending neoliberalism is an ambitious task, and we’re keen to help Andy Burnham in that endeavour — even if some of his own ministers still haven’t got the memo.”

Fran Heathcote is general secretary of Civil Service union PCS

Economy / 25 September 2026 Outsourcing companies rake in £6bn profits from public services last year, study shows 25 September 2026 G4S, Serco, Mitie, Sodexo and others made vast profits ‘at the expense of workers’ rights, accountability and service quality,’ Common Wealth warns

Editorial / 25 September 2026 Ending outsourcing is key to rebuilding the social state 25 September 2026 TUC Congress 2026 / 15 September 2026 Let’s move from outsourcing by default to public service by design 15 September 2026 The Labour government must deliver on its commitment to bring back privatised services into the public sector. This not only saves money but also creates accountability and generates wider social benefits, argues ANDY MCDONALD MP

TUC Congress 2026 / 15 September 2026 Capita’s pension shambles shows why outsourcing must end 15 September 2026 PCS is demanding the long-overdue return of essential services to public ownership, explains FRAN HEATHCOTE