END OUTSOURCING

RMT helpline 0800 376 3706 :: november/december 2023 :: RMTnews 12 RMT sees the commitment in Labour’s New Deal for Working People to ‘the biggest wave of insourcing in a generation’ as a critical promise because outsourcing has become a scourge for workers. Firstly, outsourcing embeds low pay. Most outsourced workers on rail, for example, are employed at or near the National Minimum Wage, or at best the Real Living Wage. The construction and manpower companies that populate Network Rail’s supply chain also use a variety of precarious contracts including zero hours contracts, agency work, bogus self- employment and the use of umbrella contracts. Workers who perform vital and safety-critical work on London Underground’s track are engaged through two ‘employment agencies’, Morson and Cleshar, who put them on bogus self-employed contracts that deny them sick pay, holiday, pensions and travel facilities. Workers' report having to monitor their phones constantly in case they are offered shifts and 75 per cent of the workers surveyed reported struggling to make ends meet on what they earn. Outsourcing denies workers access to pensions with outsourced workers typically enrolled in inferior schemes often with minimum employer contributions. Outsourcing also reinforces inequality by the unbundling and de-skilling of roles and the lack of training which can result in racially or gender- based occupational segregation. How does outsourcing erode workers’ pay and conditions? The answer lies in the business model itself. Public services are ‘labour intensive’ meaning that workers’ wages and conditions constitute much of the cost base, typically around 80 pe cent. A private company looking to bring ‘commercial efficiency’ to a contract to make a profit depends on reducing labour costs.  This fixation on cost-cutting is, of course, why outsourcing has been so popular with private rail companies and public authorities like Transport for London and Network Rail, which recently renewed its cleaning contract with outsourcing giant Mitie. It is also why Network Rail persists in outsourcing its vast renewals budget to construction giants. Outsourcing is seen to be cheaper with the added benefit that contracting authorities can simply wash their hands of workforce issues, claiming that they are not the employer. For example, neither company holds information on the number of workers employed on the rail infrastructure in renewals. Questions tabled in Parliament relating to the numbers of indirectly employed infrastructure workers who are outsourced, on zero hours contracts or self-employed were all answered with the statement that neither held this information. The Department appears not to even know how many infrastructure workers hold Personal Track Safety Certificates. The cost effectiveness of outsourcing has also been significantly overstated as profit margins of around 5-6 per cent mean that hundreds of millions of pounds are simply leaking out of the rail industry every year into shareholders pockets. RMT estimated that last year outsourcing of Network Rail’s renewals alone resulted in more than £180 million leaking out of the sector, with TOCs’ outsourcing adding another £100 million. Then there is the fact that END OUTSOURCING RMT is campaigning for the insourcing of transport workers Track safety protests