Billions a year lost to private profit: STUC report into Scotland’s outsourcing crisis
Almost £3 billion of public money is “lining the pockets” of private profiteers within Scotland’s public services according to a shock new report from Scotland’s largest trade union body.
The Scottish Trades Union Congress (STUC) has issued a stark warning following the publication of new research by the Association for Public Service Excellence (APSE), estimating that outsourcing is draining £2 to 3 billion EVERY YEAR from Scotland’s public services through private profit and financial extraction.
The report shows that Scotland’s public money is being siphoned away from vital public services, including health, social care, education and local government and into the pockets of investors, global corporations and private equity funds.
Published by the APSE on behalf of the STUC, the report highlights the private-dominated care sector, where 79% of care home places are now in private hands and more than 20% of income leaks out of the system to corporate owners and investors.
Scotland spends more than £16 billion a year buying services, goods and works from external suppliers. The services that are most commonly outsourced, such as social care and soft facilities management, are overwhelmingly staffed by women. The report highlights that sacrificing the pay and pensions of thousands of low paid women is discriminatory, unfair and counterproductive.
STUC Leader Roz Foyer condemned the findings and called into question the aims of the Scottish Government’s own Public Service Reform Strategy, which stresses prevention, whole-system planning, fair work and community wealth building.
Roz Foyer, STUC General Secretary, said: “This report exposes the true cost of Scotland’s rip-off outsourcing crisis – a systematic extraction of public wealth on an industrial scale.
“Billions of pounds that should be paying for health, care staff, cleaners, refuse workers and local services are instead lining the pockets of shareholders and private equity interests with not a penny reinvested into our public services.
“We are urging the Scottish Government to act now. The bear minimum they need to do is ensure the same level of scrutiny is applied to the extent and quality of privately delivered public services as the Government applies to direct provision.
“However, you cannot build a Fair Work economy on the backs of the private profiteering of our public services. Insourcing, directly awarding services and embracing trade unions as partners in that endeavour is not only fairer but also economically smarter. Every pound kept in public hands supports local jobs, local economies and better services.
“As we approach the election, Scotland cannot afford political silence from prospective MSPs who ignore the silent privatisation of Scotland’s public services. Our public services are too important to be auctioned off to the lowest bidder and should not be handed to profiteers.”