By Hilary Wainwright and Mat Little.
As much as £3.5 billion of public money could be saved in back offices alone and services dramatically improved if the Government followed the example of Newcastle City Council which put its faith in council workers and their trade union.
The report argues that making public service management more democratic, rather than contracting out and privatising services, can create jobs and protect local economies from the recession. It charts how council workers, trade unions and managers at the Council joined forces to defeat a bid to privatise the authority’s IT department and went on to transform the department, simultaneously producing £28.5 million in savings and making dramatic improvements to services.
As well as achieving significant savings the Newcastle team has increased public satisfaction ratings for its services to 95 per cent, realised efficiencies far ahead those of similar council services elsewhere and made major efficiency savings after almost halving the cost of payroll operations per employee. There has also been an improved accuracy rate in processing benefits and benefit processing costs are now £10 less per claim than other major cities.
The report shows how the ground-breaking team led a successful programme to radically improve services and make significant savings without a single compulsory redundancy. This was achieved by treating council workers as assets, not problems, and creating a genuine culture of collaborative problem solving, by putting a public service ethos at the heart of the transformation and by recognising the critical role of trade unions in providing a strong voice for staff and the necessary democratic infrastructure’.
The report claims that the team’s success shatters once and for all the myth that the public sector is incapable of reforming itself and shows that positive trade union involvement can lead democracy-driven change to inspire the foundations of a new political and economic alternative.
If this was achieved across those local authorities who have not outsourced their back office departments to the private sector it could bring savings of over £3.5bn.
The report is published by Compass.