Labour stokes union anger by failing to curb outsourcing
Public sector spending on outsourcing contracts has risen 7pc since Labour secured the election victory last year, despite the party promising to crack down on public procurement.
Data from Tussell showed the value of contracts awarded to outsourcing giants including Mitie and G4S has increased to £3.68bn since Labour gained power, compared to £3.45bn under the former Conservative government in the year before.
The increase comes after Rachel Reeves in 2021 pledged to slash spending on outsourcers by ushering in the 'biggest wave of insourcing of public services for a generation' with the aim of saving money and improving public services.
Trade unions have now hit out at Labour over its failure to cut spending following a series of clashes between outsourcing giants and some of Britain's biggest unions over contractors' treatment of workers.
Fran Heathcote, general secretary of PCS, said: 'Before the election, Labour promised the biggest wave of insourcing in a generation, yet these figures suggest the tide is going out on that pledge.
'PCS represents thousands of workers on outsourced contracts who often suffer lower pay and worse terms and conditions … than those employed in-house. Labour needs to accelerate its commitment to insourcing.'
A spokesman for Unison added: 'The Government has promised to bring privatised contracts back in-house. Unions will keep up the pressure to ensure this happens for the benefit of workers, the economy and communities across the UK.'
Mitie in the spotlight
Mitie has been the largest beneficiary of Labour's contracts so far, Tussell's figures show. Unions have repeatedly clashed with the London-listed outsourcing giant, accusing it of failing to pay staff adequately and mistreating workers.
The awards have seen Mitie given £1.59bn worth of contacts since Sir Keir took office, including a £320m contract from HM Revenue & Customs for facilities management and a £1.08bn contract from the Department for Work and Pensions for security services.
The contracts now risk further straining the Labour Party's relations with the unions that provide it with millions of pounds of funding each year.
The Government is already facing mounting criticism over its relationship with Mitie after Britain's largest union, Unison threatened to picket a Labour Party drinks reception earlier this month, that was set to be held at Mitie's headquarters in the Shard.
Trade unions had voiced concerns that the Mitie-sponsored event stood at odds with Labour's own plans to cut the Government's reliance on outsourcers.
A source close to the Labour Party said: 'Commercial partnerships at events are a long-standing practice and have no bearing on party or government policy.'
Mitie itself has repeatedly been subject to a series of strikes led by some of Britain's largest trade unions, including by Unison, which in February 2024 led a three-day walkout by 300 cleaners, porters and caterers from hospitals run by Dudley Group NHS Foundation Trust, in the West Midlands.
On Friday, 200 cleaners and security guards represented by GMB voted to lead a separate strike over pay at the Sellafield nuclear facility in Cumbria, starting on Aug 1.
A Mitie spokesman said: 'We are committed to helping our public sector partners build safer, stronger and more resilient communities, supporting people and places to thrive across the UK.
Further clashes
G4S, which has also clashed with unions, was the second largest beneficiary of Labour's spending on outsourcers, according to Tussell's figures, which show the security company has been awarded 16 contracts worth £1.05bn since Labour took power a year ago, including a £905m contract from the DWP.
PCS is currently engaged a long-running dispute with G4S over pay for security guards working on the outsourcer's contract with the DWP for security at job centres.
G4S was approached for comment.
Sodexo has been the third biggest winner of contracts awarded under Labour, with the company winning four contracts worth another £615m since last July, including a £310m award from HMRC.
A Sodexo spokesman said: 'Sodexo is proud to hold strategic supplier status as a preferred and trusted partner to Government.'
A government spokesman said: 'The data referenced includes spending by devolved governments.
'Public sector bodies must already ensure any outsourcing decisions deliver on these priorities, but we are going further and consulting on a requirement that they carry out a public interest test before outsourcing any service – which would move the dial in favour of insourcing contracts.'
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