Compulsory Competitive Tendering

Graham Stringer coined the phrase Enforced Tendering (ET), and this was the term generally used in Manchester when referring to the process of Compulsory Competitive Tendering (CCT) that came about as a result of the 1988 Local Government Act. This emphasised the fact that it was being forced upon local government throughout the country. The Conservative government believed the private sector would deliver services more efficiently and cost effectively. The Left believed what would be lost would be quality and pay and conditions for workers, and public money would be going toward profits at the expense of the workers. This chapter details the sequence of services that were subject to competitive tender and the outcome that all but one of the contracts were won by the in-house bids, the process being spread from 1989 to 1995.
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The Government’s View is Private is Best
The Government’s Programme, following its election in 1987, included privatising all local government services, enshrined in the Local Government Acts of 1988 and 1992. The mechanism for doing this was called ‘Compulsory Competitive Tendering’ (CCT), which meant that the private sector had to be invited to bid for contracts to run the services currently delivered by council employees.

In addition to the programme of privatising the nationalised industries, such as Gas, Electricity and Water[1], the Minister for Local Government, Nicholas Ridley, was convinced that all public services could be run by the private sector and believed that councils would only need to meet once a year to award contracts for services to private companies. This was an attack on the very core of local government, but fortunately for us, councils that were Conservative controlled were also opposed to this idea and were allies in trying to prevent wholesale privatisation.

Tory ministers had this belief that the private sector was efficient and that all public services could be considered in terms of customers purchasing a service. In the view of Socialists (and many others) this was, and is, a fallacious view. But the most abhorrent concept of all was that a profit could be made from the delivery of public services

The consequences of CCT meant the prospect of thousands of council workers being made redundant, wages being driven down and uncertainty about the quality of services delivered, with the cheapest bids winning the tenders.

In order to emphasise our reluctance to co-operate with this government legislation on privatising public services, Graham Stringer coined the phrase ‘Enforced Tendering’ (ET) rather than CCT. Manchester was the only council using this term – we had to be different!

The Council adopted a policy of seeking to protect jobs, improve services and maintain democratic accountability as far as possible, even though the legislation was designed to remove it. The plan was that councillors, council officers and trade unions would all work together to find a way of keeping the services ‘in-house’, which meant the Council’s workforce had to win the tenders on a competitive basis. Everyone had to be willing to change the way things had been done previously and accept that there were some inefficiencies and some poor practices in service delivery.

Before the 1988 Local Government Act came into effect, a team of officers was put together as an ‘Enforced Tendering Unit’ (ETU). People who were known for their skills, commitment and flexibility were seconded to the unit and the four main trade unions (NALGO, NUPE, GMB, TGWU[2]) each seconded a representative to work as part of the team. Steve Machin was seconded in from the Economic Development department as the team leader, but was later replaced by Vicky Rosin who was seconded from the Equal Opportunities Unit.

The political steer for the ET work was by means of a Privatisation Working Party (PWP), chaired by Nick Harris. It was set up as a working party rather than an official council sub-committee, so that all the members could be Labour[3] and so that it could have officers as equal contributors to the discussions and decisions. When formal decisions needed to be made, these were put through the Policy and Resources Committee by means of reports from the head of the unit. Although the PWP was only a working party, it was very high-powered in that the chairs of all the major committees were on it.

This working party approach, with officers and elected members having equal status and working together, that had been pioneered in 1984 for Equal Opportunities and Neighbourhood Services, was an extremely fruitful way of working.

The Purchaser Provider Split
To prepare for Enforced Tendering, massive amounts of work had to be done to describe in detail every aspect of the services to be tendered. Within affected departments, there had to be a split between ‘contractor’ (provider of the service) and ‘client’ (purchaser of the service – ie the Council on behalf of council tax payers). Whoever won the contract to deliver the service, whether the Council’s so-called ‘in-house’ team or a private contractor, the quality of the service would still have to be monitored by the Council.

Information sheets and newsletters were produced for the whole Council workforce to keep them all informed about progress and what needed to be done. The first information sheet gave the timetable for tendering, basic information about the process, a photo of the team and a strong message from Graham Stringer as Council Leader.

“The Local Government Act 1988 is not just about ‘value for money’ in public services, but is aimed at undermining local democratic control of services, weakening the role of trade unions and reducing the living standards of workers.

“Local councils are not in business to make a profit; we are here to serve the public. But for private contractors the profit motive is uppermost and has not always led to increased efficiency, but a desire to cut corners. In doing this, standards have been cut too, as experience in the Health Service over the past five years has shown.

“We are doing everything we can to maintain employment and services and expanding wherever possible. But to achieve this, now that this Act is in operation, involves changes in working practices, increased flexibility of operation and a willingness to change and adapt to new working conditions and arrangements. This is the way to survival.

“Many of you may have experienced some of these changes already in those services which must go out to tender first. In the end these changes will affect the whole of the council.

“But these changes can only be brought about by continuing the close and constructive relationship between elected members, workers and their trade unions, and council officers, which we have established so far. This council is fully committed to continuing that relationship as the only means to win.”

The team member seconded from the Personnel Department to facilitate all the staffing changes was Bernard Sutton, and he became a key person in the whole process of specifications and tender preparation. His brilliant mind and ability to deal with strategy, as well as detail, made him absolutely invaluable to the team. He and Vicky Rosin both had the ability to remain calm in a volatile situation and to think ‘outside the box’ in order to find solutions to new problems.

The services that were to be in the first batch of tendering were civic catering, school meals, vehicle maintenance, refuse collection, street cleaning, building cleaning, grounds maintenance and leisure management. But, in order to prevent the market being flooded with available contracts (and thereby disadvantaging the private sector), the programme was staggered by the government so that councils tendered services at different times and in a different order.

The whole culture of the Council had to be changed, but the end result was, in Bernard’s words “the creation of two monsters – the ‘client’ and the ‘contractor’”. There was a copy of a cartoon up on the wall of the team’s office for a long time which showed two men in a canoe, sitting back to back and paddling in different directions; splitting the canoe in half, and shouting to each other “If we work together we’ll survive”.

Getting this message of co-operation across to Council staff didn’t always work out, as some people took the client/contractor split to extremes. For example, in the catering department, there was a client officer who wouldn’t give the contracting officer any information about secondary school meals uptake, because it was part of a cash cafeteria system and therefore a client function. The contracting officer’s plaintive – “but you sit next to me and we need the information in order to plan the purchasing” – fell on deaf ears.

On the other hand, some of the council workers had great difficulty in understanding the new way of working and the necessary split between the client and the contractor role.

In the vehicle maintenance body shop, accident damage repairs were done as well as routine maintenance body work. The accident damage work was done under a contract with the Mutual Insurance Company – outside work so would not be part of the Council’s routine work that had to be tendered. Whereas, the body work that was part of the maintenance of the Council’s fleet, was part of the work that was going to have to be tendered. Bernard Sutton was having difficulty in getting the mechanic in charge of the workshop to understand the difference between the two kinds of work. He resorted to an analogy by saying “Imagine wearing a blue hat when doing the accident damage work and filling out one set of forms, then wearing a red hat when doing the Council contract work and filling out a different set of forms”. He thought he’d finally got it through to the man, but later the manager said to him “What have you done to J***? He’s just been in and said that Sutton wanted him to wear a hat and he’d never done so all his working life and wasn’t going to start now!”

For some of the Council services, the client contractor split was not so problematic. For example within the Recreation Department there was already a separate DSO (Direct Service Organisation) section dealing with grounds maintenance and the City Engineer’s Department was almost wholly a DSO. The grounds maintenance service didn’t have to go out to tender all at once and so was split into five parts, with the first 20% being tendered in July 1989. The Recreation DSO won the contract (in October 1989). I don’t know which committee evaluated the tenders and awarded the contract – possibly it was the Finance Committee (see later).

Manchester’s first major service to go out to tender was civic catering – in August 1989. A new department had been set up with responsibility for all the civic and welfare catering within the Council – called Manchester Fayre and a new Chief Officer appointed (Ruth McNeil) who was very dynamic and effective and managed, together with the ET team and officers from the Education Department, to bring together all the diverse operations (including school cooks) into one unified organisation that could compete successfully with private companies, whilst still maintaining better terms and conditions for the staff than those private companies provided. Although, it has to be said, not as good as they had been before. Manchester Fayre won the contract for civic catering.

The next service to be tendered was school meals (and what subsequent national disaster that turned out to be – see below). This contract was also won ‘in-house’.

With civic catering and vehicle maintenance, applying a ‘commercial’ model of operation had implications for the Council’s workforce, but no wider social implications in the way that the commercialisation of school meals would prove to have.

In all the more recent publicity arising from Jamie Oliver’s campaign for improving school meals[4], no-one pointed out that the root of the problem was the Tory Government’s legislation to privatise public services and ensure that councils accepted the cheapest tenders. Prior to the ET regime almost all of Manchester’s schools had their own kitchens[5] and cooked all the meals using 100% fresh ingredients[6] (exactly what is now recommended), but all this had to go in the drive to reduce costs and win the tender.

Manchester’s ET team tried to persuade the Education Department’s nutritionist to say that fresh food was best, but she wouldn’t, because frozen food was in some cases more nutritious than ‘fresh’ (which could be several days old). The team needed this definition so that they could get ‘fresh’ into the specification and avoid cheaper, less nutritious, processed foods being used. With hindsight, Bernard Sutton now feels they should have distinguished between pre-prepared food and frozen as part of the specification. Frozen pre-cooked chips were actually just as nutritious as freshly peeled and chipped potatoes, and in fact better in terms of reduced fat, and safer from the cooking point of view. But, the speed with which the tendering process had to be completed and the complex structural changes that had to be made gave very little ‘thinking time’.

The whole ET process de-skilled the cooks and reduced their working hours (and thus their pay). Private contractors were more organised, with a lot of work done by machine, so their labour costs were cheaper than the Council’s.

With school meals catering, everybody changed over to ‘popular’ foods – giving children what they wanted (ie chips) because of the pressure to keep the volume of take-up in order to survive financially, without thinking through the nutritional consequences. There is overwhelming evidence now that with primary aged children, they shouldn’t be given too much choice, just good wholesome food. In Bernard Sutton’s view, airline plates were the beginning of the end:

“Plastic plates, plastic knives and forks, followed by plastic food. Everyone drifted into the MacDonalds approach to eating, exacerbated by teachers wanting shorter lunch-times. Feeding time reduced; more hurry, hurry, bustle, bustle”.

The ET team ran lots of seminars to inform council staff about the changes that would be needed. Some managers saw it as an opportunity to exercise influence over a system that they hadn’t had previously and made some significant improvements to services. Other managers of DSOs planned to leave the Council and become private contractors and wanted to screw as much out of the system as possible.

A really problematic issue to be resolved in relation to the Vehicle Maintenance contract was that of Council assets, such as depots and vehicles, and what would happen to them if a private contractor took over the service. To account for this, a ‘market rent’ had to be calculated for these assets and this charge would have to be borne by the in-house contractor as well as any private contractor (to ensure ‘fair’ competition), even though the ‘rents’ were being paid to the same organisation (ie the Council).

The work done by the ET team paid off and the Council’s Engineering DSO won the contract for vehicle maintenance (for six years starting in Jan 1991).

The next service to go out to tender was the refuse collection and street cleaning and it was anticipated that this would be a very difficult test for the Labour Party and the trade unions given the previous difficulties with wheelie bins and the ‘task and finish’ regime referred to in chapter 12.

The Cleansing Department had been re-vamped into an ‘Operational Services’ (OPS) department and a new Chief Officer appointed (Robin Cordock). Splitting its different roles into ‘client’ and ‘contractor’ had been difficult, but successfully steered through with the co-operation of the trade unions. The department’s DSO went on to win the contract for refuse collection and street cleaning – the fifth contract to be won in-house.

Although there was great concern in the Labour Party about the way in which council workers pay and conditions were being worsened, Party members were solidly behind the work going on to win the tenders in-house as they knew this at least meant security of employment and better working conditions than in the private sector.

Splitting the Committees
In addition to splitting the Council’s workforce into ‘client’ and ‘contractor’ teams, the Council committees had to be changed so that ‘client’ and ‘contractor’ decisions were not made by the same councillors. But in addition to this, a third committee had to have responsibility for agreeing the specifications and awarding the contracts on behalf of the ‘client’ committee.

The ‘client’ role was performed by the relevant service committees[7], which meant that the councillors on those committees had to be more focussed on the quality of services being delivered to residents and not concern themselves too much with the issues around staff pay and conditions (a ‘contractor’ function), which was contrary to the instincts of those on the left. The development of ‘service plans’ (see chapter 19) was a major step forward in helping councillors (and officers) to focus on this, but for some of the services that had to go out to tender, it wasn’t clear cut as to which committee should be the ‘client’. For example, where should civic catering go? It was eventually decided that the General Purposes Sub-committee of the Policy and Resources Committee should be the ‘client’ for that. For others it was more straightforward – eg school meals (Education Committee) and meals-on-wheels for elderly people (Social Services Committee).

Developing a committee structure to deal with the ‘contractor’ function was more problematic. An interim arrangement had been made in May 1989, by changing the Markets Committee into a Traded Services Committee and extending its terms of reference so that the City Catering Organisation had a ‘contractor’ committee to report to. But this was not regarded as very satisfactory by the officers or Members involved. A proposal from the Chief Executive that ‘Member Management Boards’ be set up was rejected (on the grounds that this would be too much like a private sector operation) and a report on other possible models was requested.

It was eventually agreed, in May 1990, that, a new sub committee of the Policy and Resources Committee would be set up (including opposition party councillors) – to be called the Service Review Sub-committee, chaired by Nick Harris – which would be the formal committee for evaluating and awarding contracts for tendered services, but also consider service improvement issues across the whole Council (see chapter 19).

It was recognised, however, that there would still be a need for a forum with only Labour councillors (and officers) as members – where frankness and honesty about service failures could be aired without the threat of leaks to the press from opposition councillors. The Privatisation WP had been a very effective mechanism for this, particularly because it had all the service committee chairs as members, and, in October 1989, it had taken on a wider remit and metamorphosed into the Corporate Review WP. This new working party had become the vehicle for doing the behind-the-scenes work for the Service Review Sub-committee and so continued to fulfil this role for the services subject to Enforced Tendering. It was chaired by Nick Harris and had at least one councillor from each service committee on it, together with the Chair and Deputy of the Finance Committee.

Direct Works
At the Policy and Resources Committee in September 1990, an ‘in principle’ decision was made that the Direct Works Committee would be abolished and one DSO committee would be created for building repairs and maintenance, city catering, grounds maintenance, vehicle maintenance and building cleaning, with others coming in incrementally over 6 – 12 months (refuse collection, street cleaning and leisure management).

The proposed abolition of the Direct Works Committee was extremely controversial and strongly opposed by a large section of the Labour Group, who also opposed the separation of ‘client’ and ‘contractor’ roles within the Direct Works DLO (Direct Labour Organisation). However, councillors closely involved with the large service committees, such as Education and Housing, were desperately keen to see changes to the operation of the department (see below).

The Council’s ‘client’ role within the Direct Works Department was carried out by the ‘Technical and Consultancy’ (T&C) division and, within service departments such as Education and Housing, there had been concerns for years about the way this service operated. The budgets for the repair and maintenance of buildings managed by the service departments were actually controlled by the T&C division of Direct Works, rather than by the service departments themselves. It often seemed as though the organisation and timings of the repairs and maintenance work was planned to suit the working arrangements of the DW department, rather than the service departments. For schools this meant that building work was often carried out at the most inconvenient times (and rarely in the school holidays) and they had no control over the quality of the work. For council house tenants work was rarely done when and how it was supposed to be (see chapter 16). Also, the repairs and maintenance costs frequently exceeded the original estimates and although they had no control over this expenditure, chief officers were held accountable for any overspend as part of their departmental budgets.

Because of this, one set of councillors wanted the T&C officers to be part of a client function located within the service departments, and for the repairs and maintenance budgets to be controlled by them. Another set of councillors strongly opposed this on the grounds that it threatened the viability of the DLO, which was an important department and a significant role model for the building industry. These differences of view were mirrored in the City Party and a number of explosive debates took place in the autumn of 1990.

A well argued paper was presented to the City Party by the Chair of the Direct Works Committee, Ken Barnes – written by the Director, Paul Lowenburg – making the case for refusing to follow every government ‘diktat’, on the grounds that would make it easier for a future private sector take-over. The paper reminded delegates that:

“Direct Works is the largest public sector building organisation in the country with over 4,000 directly employed workers; providing one of the largest training schemes available in the construction industry… Successful in winning contracts in an increasingly competitive market… Returning almost £3 million in surpluses to the Council… 95% of all maintenance work contracts won in house [no other Local Authority with this record]. Low commissioning costs [acknowledged favourably by District Auditor in 1988]”.

The paper argued against the Council having just one DSO Committee on the grounds that its diverse nature would make it difficult for Members to gain the necessary expertise; that it would have responsibility for more than 12,000 employees; that the client and contractor split would become institutionalised making a corporate approach more difficult in the future; that there was nothing in common between all the DSO activities other than because the Tory government legislation had grouped them together.

Lobbying letters from trade union convenors were received by the City Party and at the September 1990 meeting, a resolution was passed opposing the abolition of the Direct Works Committee. The Labour Group were bound by this policy decision, but had also recognised that one single DSO Committee would be unwieldy and unsatisfactory, so the Policy and Resources Committee (in December 1990) overturned its previous decision and resolved that the Direct Works Committee would continue and would take on the additional responsibility for the contractor role of City Catering[8].

The other DSOs were to be considered in May 1991. It was, however, agreed that control of ‘building work’ budgets should be transferred from the contractor to the client departments. Despite this, there were still problems with client departments not actually achieving control over their repairs and maintenance budgets for many years.

Awarding the Contracts
In his report to the City Party in October 1990, Graham Stringer had reported that the Operational Services DSO had won the contract for refuse collection and ‘other cleaning’ services[9], despite the serious competition by the private sector, and that because private contractors had won a number of contracts in Greater Manchester, comparisons in pay and conditions were then possible. It was clear that the private contractor workers had inferior holiday entitlements, £50 a week less pay and very little security. This re-enforced what Party members already knew, and although they felt some pride in the fact that the Council had so far won all the tendered services in-house, there was still concern about the erosion of pay and conditions.

In January 1991, the Service Review Sub-committee considered the imminent tendering of the management of Leisure Services. A great deal of work had to be done to protect them from the threat from commercial operators who were felt to be likely to increase the charges to the public and significantly reduce the pay and working conditions of the employees. The legislation dictated that the contracts had to be broken up into manageable chunks, called ‘tranches’, to make it easier for the private sector to win the contracts, but the government allowed the exclusion from the contract facilities with significant Educational use[10], which helped the Council.

It was decided to include within the first tranche contract a ‘package’ of indoor facilities and a ‘package’ of outdoor facilities to minimise the number of private sector companies likely to bid[11]. The second tranche would include the games facilities at Wythenshawe and Heaton Parks.

The following month, building cleaning had to be put out to tender (but the government allowed Social Services buildings to be excluded), and a contract for the 3rd 20% tranche of grounds maintenance work also had to be ‘let’.

Over the spring and summer, the designated officers and the sub-committee had to shortlist bidders and evaluate the tenders, for decisions in October 1991. The best bid for building cleaning was from the Council’s Operational Services Department, so the contract was awarded for four years from January 1992, and the Council’s Recreational Services Department put in the best bids for the first tranche of Leisure Management (6 year contract awarded from January 1992) and the third tranche of grounds maintenance.

The second tranche of Leisure Management had to be advertised in March 1992 and the process completed by January 1993. This was going to have to include most of the rest of the facilities and it was a major worry that the contract might be lost. It was allowable to claim exemptions for some facilities and so in relation to the Platt Lane football complex, negotiations were carried out with Manchester City Football Club for them to take over more of the management role. It was also allowable to exempt facilities (and parks) management if the management was only an incidental part of a person’s job. However, this had implications for the re-structuring of the Recreation Department. Nevertheless the necessary work was done (see below).

In April 1992, the grounds maintenance function was transferred from the Recreation Department to the City Engineer’s Department – partly to protect the jobs threatened by ET, but also to ensure an acceptable standard of work as a ‘traded’ service.

Following the re-election of the Tories in June 1992 for a fourth term of office, there were increased threats of privatisation. On 12th August 1992, a joint statement from the Council leadership and the trade unions was issued (together with a press release) – recognising the new reality:

“Senior Labour councillors and representatives of the Trade Union Forum met yesterday to consider the unprecedented threat to council services, jobs and finances posed by the latest round of government enforced tendering and contracting out proposals.

“The council and Trade Union Forum confirmed their intention to work together over the coming months to continue to provide high quality services to meet the needs of Manchester people and to retain the maximum number of jobs possible in the direct provision of services…”

In the press release, Richard Leese stressed the importance of the trade union co-operation and said:

“A democratic and accountable workforce on fair and reasonable wages and conditions is essential to the provision of quality services. These services face ever-increasing threats of privatisation, and increased co-operation between councillors, workers and service users is the best weapon for protecting services and jobs.”

In the autumn of 1992, the second Leisure Management contract was to put out to tender, but the Service Review sub-committee was optimistic that no further Leisure Management contracts would need to be let, given that there was very little interest from the private sector to bidding for the contracts. This second contract was won in-house, as was the fourth 20% tranche of Grounds Maintenance work (awarded to the City Engineer’s DSO for four years from January 1993).

In June 1994, the City Treasurer reported on a full review of the DLOs and DSOs that had taken place in order to assess their ability to withstand future competition from the private sector and to produce the requisite ‘rates of return’ (the budget surpluses decreed by government). City Works (the re-named Direct Works DLO) and the City Engineer’s DLO were considered to be less vulnerable to competition in the short term, since they tendered for a large number of contracts and on a continuous basis. The City Treasurer was confident that for 1994/95 year these two DLO’s would be able to operate within their budgets and achieve their target surpluses to meet their statutory ‘rates of return’.

However, the City Catering contracts were due to be renewed during 1994/95 and were judged to be vulnerable to real competition from the private sector. Because of this, the department was unlikely to repeat the income surplus achieved last year and was seeking to reduce staffing by means of VER (Voluntary Early Retirement). The grounds maintenance and highways contracts were in a similar situation and their income targets were thought to be over-optimistic. Pay awards were anticipated to be a problem because of the carrying forward of overspends from 1993/94.

In summary, all the Council’s DSO/DLOs were seeking to slim down their numbers of staff and increase productivity. They needed to offer attractive financial compensation packages for VER but this would reduce their surpluses. The dilemma for grounds maintenance and highways was that their income targets were over optimistic, but were needed in order to pay for the VERs. The councillors were between a rock and a hard place again!

On the positive side, the City Treasurer reported that where the ‘client’ side had been separated from the ‘contractor’ side in departments, they appeared to be able to exercise control over expenditure.

As part of the Civic Catering re-tendering process in July 1994, a number of harsh measures had to be agreed in order to keep the bid competitive, including the following:

  • Education Department would have to reduce its charges for providing the payroll service (or the City Catering Officer would have to explore more cost-effective alternatives);
  • New employees would have to be offered new terms and conditions (less favourable than for existing employees);
  • Existing employees would have to be encouraged to leave (but this would only happen if enhanced VER/VR deals could be offered);
  • Reductions in transport costs would have to be sought (which would have a knock-on effect on the vehicle maintenance contracts).

The Civic Catering tender was let in October 1994 – as one package – for four years and five months (to the end of December 1999) with the option of extending it to six years.

The last service to go out to tender (in 1995) was the last 20% tranche of the Grounds Maintenance work (Didsbury area) and it was lost to the private sector – the only one to be lost. It resulted in the transfer of ten staff to the private sector company that won the contract. I don’t have any information on how this subsequently turned out for the service or the staff concerned.

In the Greater Manchester area, most of the contracts were won in-house by the ten district Councils that collectively made up the Association of Greater Manchester Authorities (AGMA). They worked together on CCT and Bernard Sutton used a penguin analogy for this – referring to the way penguins in the Antarctic in the winter all huddle together for warmth and take it in turns to be on the outside. AGMA authorities knew each other’s timetables and, after the tenders were won, they swapped information on rates. They were also in contact with Merseyside, West Midlands and Yorkshire Authorities, as well as ‘the big five’ councils (Leeds, Liverpool, Birmingham, Sheffield, Newcastle) to try and co-ordinate what was being done. The philosophy was that if everybody went out to tender together, it would be difficult for predators to pick them off one by one. Although, there were some parts of services that some councils were happy to have picked off (where they were not confident about running them well) and they hoped that this would be enough to keep the private sector happy.

The main success story in relation to the CCT regime, in addition to the number of council worker jobs that were saved, was the co-operative working with the trade unions that was established. The Council survived it all without any serious rows and this left a valuable legacy – not always appreciated – of having trade unions supporting elected Members and elected Members supporting organised labour. In Bernard Sutton’s view the subsequent ‘Best Value’ regime would never have been survived without that legacy. A study in 1995 for the Joseph Rowntree Foundation[12] concluded that:

“Adapting to the new CCT regime has proved difficult for some authorities… job losses have been accentuated and conditions worsened in the less competitive authorities… Where authorities have achieved productivity gains, depressed pay and trimmed back on benefits, they have competed with more success… There are indications that private contractors are establishing themselves more firmly and that future competition will be fiercer, particularly as white collar work enters the market…”

However, their study showed that many of those interviewed felt that there had been some gains from the process – such as making customer requirements more explicit, prioritising customer satisfaction and making management more cost-conscious. The majority also felt that without the element of compulsion, these changes would not have happened.

In Manchester too, there were some good things that happened as a result of CCT – eg the mechanisation of road sweeping, and changes to some of the catering practices that were not very sound.

CCT forced council services to become more efficient and forced councillors to face up to the necessity of ending restrictive work practices and making budget savings. Whether the service being delivered was dustbin emptying, street sweeping or catering, the majority of the costs were for labour and the rates of pay for council workers were as much as £1 an hour more than for those in the private sector.

On the downside, the consequences of increased mechanisation and competition with the private sector meant that there was a general lowering of wages for some of the lowest paid workers in the city (and country). For the workers and their trade unions, the alternative to reduced rates of pay was the Council losing the tender and redundancies, so there was no alternative but acceptance.

With the election of the Labour Government in 1997 there was great optimism that things would change, and a report produced by the DETR in 1998 summed up the view in Manchester.

“Under Compulsory Competitive Tendering, service quality has often been neglected and efficiency gains have been uneven and uncertain, and it has proved inflexible in practice. There have been significant costs for employees, often leading to high staff turnover and the demoralisation of those expected to provide quality services. Compulsion has also bred antagonism, so that neither local authorities nor private sector suppliers have been able to realise the benefits that flow from a healthy partnership. All too often the process of competition has become an end in itself, distracting attention from the services that are actually provided to local people. CCT will therefore be abolished.” [13]

A final word from Bernard Sutton:

“By the end of the tendering process we had become pretty efficient. Not perfect, but pretty good compared with some of the pretty poor performances in the private sector”.

I don’t know if Manchester was unique in winning all but one of the tenders in-house, but it must be near the top of the list.

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Editor’s Comments

The sub-headings were not in the original. There have been minor typographical and layout changes. As far as I know, Kath wasn’t involved directly in the service areas that are covered by this chapter, other than the school meals perhaps. I feel she hasn’t covered this topic as thoroughly as some of the other chapters. I found some of the detail in this chapter too hard to follow.


[1] Government privatisation of Water came into Law 6th July 1989. Council resolution: “[we] call on opposition parties in Parliament to make clear that a future Parliament will take back into ownership of the nation the assets of privatised water companies with no recompense for shareholders.”

[2] National and Local Government Officers Association (NALGO), National Union of Public Employees (NUPE), General, Municipal, Boilermakers and Allied Trade Union (GMB) and Transport and General Workers Union TGWU)

[3] The membership of all council committees and sub-committees had to reflect the political balance on the Council. Working parties were outside of the official structure and so could be composed of just one political party. The Privatisation Working Party (PWP) was set up on 12th June 1989 with Nick Harris as Chair, Val Dunn and Gordon Conquest as deputies, and 11 other members – Chair (or nominee) from each of the following committees: Policy and Resources, Finance, Personnel, Direct Works, Housing, Education, Environmental Services, Leisure, Social Services, plus Bill Risby and Shirley McCardell.

[4] A campaign ‘Feed Me Better’ started by TV chef, Jamie Oliver, after a 4 part documentary series ‘Jamie’s School Dinners’ that he made, which was aired on Channel 4 in 2005.

[5] There were also a few production kitchens – eg at Abraham Moss High school – that transported food out to schools that didn’t have their own kitchens.

[6] Editor’s note: This is not likely to be truly 100% fresh ingredients. This is a typical off the cuff thing that Kath would say without facts to back it up. Read it as ‘a high proportion of’ maybe.

[7] Housing, Social Services, Education, Leisure Services

[8] This proved to be just as unsatisfactory as reporting to the Traded Services Committee and was a great source of angst for the City Catering Chief Officer, Ruth McNeil, for many years. Sho felt that the councillors didn’t give sufficient importance to catering issues.

[9] A six year contract to start in Jan 1991. The Engineering DSO had also won the contract for vehicle maintenance.

[10] Facilities with significant educational use that were exempted from competition were – School swimming pools; Abraham Moss & Moss Side Leisure centres; Debdale sailing centre; Belle Vue athletics facility; Ardwick module; Ten Acres astro-turf; Arcadia and the Forum Theatre and leisure complex.

[11] The indoor package included Gorton Tub, Chorlton Leisure centre, and the swimming baths at Broadway, Harpurhey, Varley St, Levenshulme, Victoria and Withington. The outdoor package included Belle Vue Athletics centre, Platt Lane football complex, Ten Acres Lane astro-turf, Boggart Hole Clough Athletics track and Wythenshawe Athletics track.

[12] ‘Competition, Contracts and Change: Local Authority Experience of CCT (Future & Local Government)’, Nirmala Rao and Ken Young, Joseph Rowntree Foundation, Aug 1995. Summary PDF available from viewed February 2016

[13] Quoted on page 8 of ‘The Local Government Bill: Best Value and Council Tax Capping’ (Bill 5 of 1998/99). House of Commons Library Research Paper 99/1. Available from ResearchBriefing/Summary/RP99-1 Viewed February 2016.
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