The Essence of Privatisation

“The only way contractors make a profit is by cutting jobs and wages – that is the essence of privatisation.” Those were the words of Jeremy Corbyn, local MP for Islington North in London, commenting on the announcement of London Metropolitan University’s plans to privatise the bulk of its non-academic services in August 2012. The contract is valued at £74 million over five years, with more universities ‘invited to join’ the emerging trend of university privatisations as they deal with the Coalition-government’s restructuring of Higher Education. Malcolm Gillies, vice-chancellor of LMU, said of the privatisation; “There may be some staff losses and some staff gains, but if you run it into shared services, you grow a business.”
Jeremy Corbyn MP did not only denounce the privatisation of LMU’s support services; in May 2012 he co-sponsored an Early Day Motion to Parliament with Caroline Lucas MP, concerning the results of privatisation within Higher Education. The motion focused on the privatisation of St George’s (University of London) cleaning services and the negative impacts it had on wage-levels and workloads for the cleaners involved, including an explicit refusal by the private company to pay the London Living Wage of £8.30 an hour, as recommended by the Greater London Authority. The Principal of the school at the time of the privatisation (2006) was Michael Farthing; Director of Administration was held by John Duffy.
These names may ring a bell.  Michael Farthing is now the Vice-Chancellor of Sussex University, and John Duffy is the Academic Registrar. Two weeks before the Early Day Motion in Parliament, the VC and the Registrar announced that Sussex University was to privatise most of its support services, including catering services and facilities management. This privatisation entails selling these services as two separate contracts (Catering Operations and Total Facilities Management) to private providers, with 235 staff-members being re-located to the private sector.
Set to come in to force in August 2013, the privatisation process has been underpinned by the desire from university management to create more ‘efficient services’ in order to ‘support the core mission of academic excellence’ as set forth by John Duffy. The university management have explicitly denied cost-cutting being a motivating factor behind this. Whilst a 4% profit is accumulated by the university in the coming year, it is not a profit-making enterprise. The university is legally in the charitable sector, meaning that any excess money goes back in to future spending of the university. The privatisation of the support services on campus entails that, in laymen’s terms, most services which are not directly related to studies (i.e. non-teaching and research-based) will be sold to private companies which explicitly make profits. These companies will not run the services solely in the interests of students, contrary to what is currently done, but will rather work to make money for themselves and their shareholders. Cost-cutting and worsened quality of service are real possibilities, as these companies seek to take over services such as all food-outlets except the bars, Health and Safety, Portering Services, Security, Building Maintenance Services and many more.
Since the formation of the Coalition government in 2010, public funding to universities has been consistently downsized. HEFCE and TDA-funding grants to Sussex are forecasted to be halved by 2014-15, putting universities in a precarious situation of uncertainty. Events such as LMU and Sussex privatising their non-academic services has been welcomed by senior Tory ministers, including the former Universities’ Cabinet Minister David Willets, as changes which conform with the Conservative vision of Higher Education.

“Sussex has long enjoyed a reputation for being left-field. And I suspect this goes some way to attracting students that apply. The University has tried to identify what makes Sussex unique; this is certainly part of it. Does a left-field university really want to be seen in the vanguard of right-wing government policy?” Those were the words of Sussex UCU Vice-President in an interview with The Badger.. The three trade-unions representing the 235 concerned staff-members (UCU, UNITE & UNISON) have been in continuous consultation with the university since May, and have all been vocal in their rejection of privatisation. Arguing rather that only an in-house solution would safeguard staff against pension cuts, as well as against changes to working conditions which could in theory mean lowered wages and redundancies. However, the university maintains that no redundancies will occur, and that this privatisation will benefit the 235 staff as they work in world-leading corporations, many issues have arisen concerning adequate consultation and dialogue.

”I couldn’t believe it, I was incredibly shocked…The feeling was that they didn’t care about staff. It’s very tragic to work in an environment with such a lack of trust and ignoring the importance of collegiality.” Maureen Winder said of the privatisation announcement in an interview with The Badger.. Maureen is branch secretary of UNISON on campus, and having worked as a trade-unionist for many years now, she has experienced first-hand what could only be described as a seemingly deliberate prevarication by the university when consulting on large-scale re-structuring’s such as this. UNITE, UCU and UNISONhave raised the issue the lack of consultation from deliberations with the university. Whilst the university formally invited the representatives of the 235 affected staff to hear of the proposal to privatise, the plan was already in motion with months of preparation involved beforehand. As Rob French put it; “because all the while that they have been clouding the issue and holding the consultation process in statis, they have been proceeding with their proposals as planned based on decisions made before consultation started.” Whilst the university maintains that it holds the interests of staff at heart, both Michael Farthing and John Duffy declined to comment on the consultation.
With Sussex University at the vanguard of government policy on Higher Education together with London Metropolitan University, the issue of whether privatisation is a wise policy remains unknown. Few examples of privatisation on a scale like this have been seen in a UK university; Queen Mary University of London famously privatised its cleaning services in 2001 and then brought them back in-house after continuous failures and complaints from service-users. Within academic research, few studies have been carried out regarding privatisation in universities, with Steve Jeffry’s seminal piece of May 2012 as a notable exception. A Professor of European Employment Relations at LMU, he found ideas of efficiency-enhancement to be based more on theory and ideology than any empirical evidence, as privatisation within HE has reportedly failed more than it has succeeded.
As the university battles for the hearts and minds of the 235 affected staff-members and the student population, no solution appears visible in the immediate future with the university intent on pushing this through in order to ‘enhance efficiency’ and provide services capable of handling ever-increasing student numbers. In opposition to the privatisation, arguing instead for an in-house solution capable of handling increasing student numbers with maintained excellence, is a coalition of staff and students headed by the three trade-unions and the Student’s Union. Recently joining their ranks has been Caroline Lucas, MP for Brighton and previous critic of privatisation at St George’s, who has urged the university to reconsider its proposals and choose to maintain the tight-knit community visible today. Lucas wrote to the Vice-Chancellor in July, but has yet to receive a reponse. An industrial dispute seems imminent as privatisation remains on the agenda. “We’re extremely worried” said Greg Paterson, Park Village porter and one of the 235 staff-members. “The privatisation is what gets talked about every day in the tearooms.”

By; Adriano Mérola Marotta