There has been goings on at Wellington City Council of late to do with privatisation or “outsourcing” of services with a wobbly performance by the centre-left majority on the Council.
In December last year the councillors voted to sack the chief executive of 15 years in a move seen as a bid to rein in the senior management’s pursuit of cutbacks and privatization. Then, typically of the wavering the centre-left group, they voted to replace the top manager with an import from Britain with a reputation as a privatizer.
In March an article by Gordon Campbell revealed the failure of the centre-left to have taken control of Council affairs since the election in 2010 of Green Party Mayor Celia Wade-Brown. Campbell interviewed Labour councillor Paul Eagle:
From the outset, Eagle explains, management has held the initiative. “There’s been a culture ever since I’ve been here,” he begins, “that anything to do with Council operations has really sat with management.” Councillors were thwarted ‘constantly’ by the distinction between governance vs operational matters. “But in plain English, when things get contracted out, when services get cut, councillors get given very little time, or information about the impacts…I really think what has been missing is the fundamental discussion around what is a public service, and what is commercial.”
Eagle admitted that the centre-left had not take action to end the ‘business as usual’ management approach of the last 10-15 years. Campbell continued, “As Paul Eagle has indicated, there seems to be a clash of philosophies between those on Council opposed on principle to outsourcing (and opposed to the Council exiting the direct delivery of services) and those within Council management who seem to see this route as the path of economic virtue.”
At last, and when council elections approach again this year, as a cynic might observe, the centre-left majority finally made a bid to get a grip on decisions over outsourcing services. They requisitioned an extraordinary meeting of the council for 4 April to debate two items.
The first was urgent; whether to proceed with contracting out suburban street cleaning and other street works, a service that has always been done by in-house. The closing date for tenders was 8 April for a contract to run from 1 July. At stake were the jobs of 27 Maori and Pacific council workers, half of whom attended the council meeting.
The second item was to demand a full review of the outsourcing of operational services since 2001 for the May council meeting, and to stop any further outsourcing until that review has happened.
It was time for a bold stand against outsourcing. Bold because the debate revealed that the cards are stacked against councils doing street maintenance services in-house. Central government, through the New Zealand Transport Agency, uses state funds to sluice these lucrative contracts to the private sector. If the work is put out to competitive tender, there is a transport agency (ie government) subsidy to councils worth 44% of the contract price. The Council can put in an in-house tender and qualify for the subsidy if it wins, providing it complies with strict transport agency rules designed to favour the private sector. In this way councils are bribed to contract out. In the debate on the street works contracting out management claimed that the council was risking $1.6m in subsidy and other costs if it stopped the process.
The vote on contracting out the street works was tied 7 – 7, but Celia Wade-Brown used her casting vote as Mayor to proceed with it. The second item, the review, was voted for unanimously.
The wavering nature of the centre-left, specifically in this instance by the Green Party mayor and the Labour Party businessman Justin Lester, was demonstrated again. When all is said and done Green Party politics are not based on any loyalty to the working class. Consequently, Green politicians are unreliable, as this episode so clearly shows.
For the record the voting went like this:
For outsourcing: Celia Wade-Brown, Justin Lester, Ian McKinnon, Andy Foster, Ngaire Best, Simon Marsh, and Jo Coughlan.
Hats off to Iona Pannett, Bryan Pepperell, Stephanie Cook, Helene Ritchie, Leonie Gill, John Morrison and Paul Eagle for opposing.
The Samoa Observer covered the story sympathetically to the workers involved.
Service and Food Workers Union delegate, Tuifa’asisina Meaole Keil, who was at the meeting, told the Samoa Observer, “For CitiOps [a council dept – Ed] and workers that’s been servicing Wellington for decades, this vote is basically stating the Council is abandoning you guys. The money argument used by those councillors became more important than the human relationship between the council and its duty of care to its staff and the people of Wellington. For Councillors to say that the opposition to contracting out is based on ideology and philosophy just does not wash. Because when you ask the guy at the end of a shovel or a cleaner at the end of a mop, to them, this is not an ideological or philosophical debate. The cold hard fact is that when there is contracting out, these people will be asked to work harder for less.”
He added, “And here’s the other thing, the Council will now distance itself from this fight by outsourcing it out. Yet these people have been loyal, who raised their family based on the pride of working for Council. So where’s the Trust? In essence the Wellington City Council has abandoned these Wellingtonians. This is a gutless decision.”
The report quoted Paul Eagle:
“I’m very disappointed that we walked away from that meeting and 27 guys lost their jobs for starters. They haven’t got any confirmed appointment with any new contractor so essentially they are out of work. The impacts on their family, their children, putting food on the table really concerns me that we didn’t do enough for them.”
He admitted to being surprised that the vote to outsource won especially when a Labour and a Green party member were there. “It really surprised me that Mayor Celia Wade-Brown, a Green Party member, and Justine Lester, a Labour member voted for outsourcing it out. I really think their party memberships should call them out. I mean if you are going to vote by the principles from your platform at the elections, then by voting against those principles, you really need to question your party membership.”
He also agreed that Councillors who voted for outsourcing do not really understand what they’ve done.
“I don’t think Councillors really comprehended what they voted for today. What will happen now is that even though there’s a resolution that we can stop outsourcing in the future, the reality is that when you’ve got a Council management team that is so pro-outsourcing then they will not even give this the light of day.”
According to Mr Eagle, false economies can be readily assumed. With central and local government contracts, he said, private sector bidders will bid low in order to win the tender – and then once the in-house capacity is destroyed, they are then free to jack up the prices.
“What will happen here is they will hold the intelligence, then they will start to say to Council that if you want this service its going to cost this amount of money. The expertise then lies in the private sector, and losing that historical and institutional knowledge where the CitiOps for example knows where everything is, once that’s lost, it’s gone.
“It took hundreds of years to get there and by the stroke of a pen, a whole system that works has been dismantled just to balance a bank sheet. This is the gutless way out, Instead of finding another way, to look further or harder on how to preserve our people that were in that room. The easiest thing to do was to cover it all up in flowery, philosophical languages but the reality is: These workers were abandoned.”