Frances O’Grady: 'Britain has been very good at creating bad jobs'

“If you treat your staff like enemies, what does that say about you as an employer?”

Frances O’Grady is very worried about the future of the public sector. Not only has austerity hollowed it out almost to breaking point, not only is doubt overshadowing the continuation of NHS and local government services – but the general secretary of the British Trades Union Congress (TUC) also believes this government has lost sight of what lies behind the sector.

“At the heart of our public services are people,” she says. “In many cases the service is a human being, who’s looking after or teaching or saving or rescuing other people. If you treat public servants well, that leads to an improvement in the service.

“When you speak to public service workers, morale is really low. Yes, they’re having a tough time in terms of their own household budgets – but they’re also really, really worried about the services they’re delivering and their future.”

The Institute for Fiscal Studies has warned that cuts in the next parliament would be “on a colossal scale” under this government’s plans. Chancellor George Osborne has proposed spending cuts of more than £30bn, including a further £12bn slash to the welfare budget, but has refused to give a breakdown of where these cuts will fall.

The NHS, despite coping well with budget cuts from 2010 to 2013, is now heading for a £2bn deficit, according to an assessment published last week by thinktank the King’s Fund. Central government funding for councils will have been slashed by 40% by May 2015, research by the Local Government Association estimates.

Meanwhile, public sector unions are reporting deepening resentment, plummeting morale, mounting workloads and higher levels of stress and illness among staff who are complaining of increasing inspection and bureaucracy.

This is the backdrop for the 2015 general election.

“I think at a fundamental level, it’s a fight for the future of the public service ethos and the role of public services in society and in the economy,” says O’Grady.

For the TUC boss, it’s a case of equality and fairness. Despite prime minister David Cameron’s appeal to business leaders to offer their employees a pay rise, O’Grady remains sceptical of a government that has presided over “the longest squeeze on real earnings since the 1850s”, as she wrote in the Guardian recently. While FTSE 100 chief executives received a 26% pay rise between 2010 and 2014, she points out that salaries for paramedics dropped by 12.3%, for primary and nursery school teachers by 13.4% and for bus drivers by 11.3% over the same period.

Unpaid overtime is more common in the public sector, with 27.4% of employees working beyond their contracted hours, compared with 18.5% of private sector staff. The public sector benefits from £11.6bn worth of free hours a year, according to TUC analysis.

O’Grady says: “Did they ever consider what would happen if people withdrew that goodwill?” Traditionally, the public sector has acted as an anchor on pay – a benchmark by which decent employment was measured, she adds. “You kick that stick away, and that’s one of the reasons why employers in the private sector don’t feel under any pressure to share pretty healthy figures on profit.”

Meanwhile, the Conservatives’ plan to raise the threshold for public sector strike action, which O’Grady takes as “a desire to stifle any dissent in the workplace against pay unfairness”.

Since coming to power in 2010 the coalition government has doubled the amount it spends on outsourcing to £88bn. What does this mean for the public sector? At a human level O’Grady believes it has led to an increase in low-paid, insecure or part-time jobs, zero-hours contracts and a worsening of terms and conditions. “Britain has been very good at creating bad jobs,” she says. “How many people will see this as a career choice for the future?”

But outsourcing is also a matter of principle. Many people believe there are limits to the free market – hence huge public concern over the future of the NHS or support for taking the railways back into public ownership.

“I think public service ethos is about recognising that there are places where the market shouldn’t go. Most of us feel it’s wrong to make a profit from people’s ill health or disability or imprisonment,” says O’Grady.

She is also quick to point out the business case for equality and fairness. “Although some politicians don’t like to acknowledge it, decent businesses can’t run without a good transport system, without healthy workers, without skilled and trained workers, without social cohesion,” she says. “So actually, if we fatally damage our public services and the public service ethos, it’s bad for everybody and it fundamentally changes the nature of the society we live and work in.”

And that’s not to mention the pressure growing inequality places on public services, in terms of health, housing and welfare, for example.

This year, income inequality was replaced by the threat of global conflict as the biggest threat to world stability, according to experts polled by World Economic Forum (WEF). O’Grady, who attended WEF’s 2015 annual meeting in Davos, says inequality was notably missing from many of the conversations she witnessed there.

“This year it felt a bit like nobody really wanted to talk about it – possibly because, despite all the good words in the first year I went, no progress had been made in tackling it,” she says. “People were keen to talk about Greece, keen to talk about productivity and all sorts of things, but not actually about that obscene gap between the rich and the rest.”

Back in the UK, O’Grady is fighting hard to get the TUC’s message heard. She is pleased that Labour has committed to improving pay and the quality of UK jobs, but has made little headway in convincing the Conservative party that austerity is a failed project.

There is a lot at stake in May 2015 for O’Grady: “We are campaigning very hard to make the case for proper funding for public services, and decent jobs and respect for the people who deliver them.”

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