Privatisation and shared services
Shared services are when one or more employers set up new organisations to make service delivery cheaper, for example by pooling resources to reduce overheads.
But solutions can turn into problems, promised benefits may not materialise, and often workers providing the services lose out.
It is essential that UNISON members and reps know how to act when shared services are introduced, so they can ask questions and ensure their rights are protected.
On this page
Efficiency and economies of scale
Many schools, academies, colleges and universities are creating shared services to save money through so-called ‘economies of scale’.
Government changes in VAT rules made it easier to create shared services. Often a new shared service will mean job losses, cuts in terms and conditions, and outsourcing. Shared services may also be the first step towards mergers or the creation of clusters of institutions.
UNISON is committed to maintaining high-quality publicly run services, as well as protecting staff who are outsourced. We will campaign vigorously against any proposal to privatise services.
Services that are affected
Procurement, ICT, human resources, finance, security, buildings maintenance, catering and cleaning are the most usual shared services, but any of the services provided by UNISON members could be affected.
In England, more schools are becoming academies and paying private companies to provide services rather than the local authority.
Some colleges are setting up new limited companies or partnerships with private companies.
UNISON is concerned that the government’s real agenda is effectively to privatise further and higher education.
Are shared services a good idea?
Efficient delivery of services is a good idea. But shared services are an opportunity for private companies to move in and make a profit from taxpayers’ money that is diverted away from education into shareholders’ pockets.
And the only way a profit can be made is by cutting costs. That may mean cutting jobs, quality or staff terms and conditions.
Dangers to the workforce
Shared services often involve outsourcing, or possibly a TUPE transfer, meaning that pension rights may be under threat, and employers may be able to give new staff lower terms and conditions than existing staff.
Did you know?
Shared service centres in the civil service cost £1.4bn to set up, £500m over budget. Only £159m savings were achieved
After UNISON campaigned in October 2012 London Met University abandoned plans to transfer 235 staff to a shared service as part of a £74m deal.
What to consider if shared services are introduced
Ask your UNISON rep to seek a meeting with your employer as soon as you hear anything about the introduction of shared services. They can raise questions about the issues that may affect staff, including:
- job losses and redundancies due to rationalisation and restructuring;
- changes to terms and conditions and TUPE protection;
- secondments – if your employer proposes seconding instead of transferring staff to a shared service company immediately seek advice from your region;
- possible relocation and travel costs;
- eligibility to the Local Government Pension Scheme – both existing and new staff must have guaranteed access to the LGPS;
- change in duties without review;
- new employers seeking local or regional arrangements;
- derecognition of unions;
- threat to facility time;
- blurring of different employers’ roles;
- temporary and transitional arrangements like travel time and childcare;
- equality impact assessments;
- training for any new responsibilities.
Legal disclaimer
The information contained within this article is not a complete or final statement of the law and is based on the laws of England, Wales, Scotland and Northern Ireland.
While UNISON has sought to ensure that the information is accurate and up to date, it is not responsible and will not be held liable for any inaccuracies and their consequences, including any loss arising from relying on this information. If you are a UNISON member with a legal problem, please contact your branch or region as soon as possible for advice, or for non-employment matters call UNISONdirect.