The Great Contract Robbery 

  

or 

  

The Saga of the Thirty-nine Steps 

  

An outline chronology of events, past, present and future 

 

1.	May 1991---The Government produce a White Paper entitled "Education and Training for the Twenty-first Century".
2.	Main thrust---This document sets out major changes to the organisation and financing of Further Education. Its aim is to increase student numbers and reduce unit costs. The Further Education sector was to be removed from the control of local authorities and funding of the sector 'centralised'.
3.	Distribution of funds---Further Education Funding Councils are to be established to agree funding levels with the F.E. Colleges. There are approximately 463 of these colleges in total.
4.	The FEFC is established by the Government as a quango; the key figures are appointed by the Secretary of State.
5.	The Further and Higher Education Act 1992 is the mechanism by which these new institutions are formed.
6.	The Act also places colleges on a corporation footing. Each college becomes a separate legal personality with powers of decision-making vested in the governing body.
7.	On the 1st April 1993, colleges become independent statutory corporations. For the staff involved this change of ownership represents a 'transfer of undertakings' as understood in European Law (Directive 77/187) and its domestic law equivalent, the Transfer of Undertakings Protection of Employment Legislation.
8.	It is quickly realised that the colleges are not as independent as they think they are. This point is reinforced by the Chief Executive of the College Employers Forum, one Roger Ward, in his CEF bulletins to principals, but in coded form.
9.	Ward rose to fame as the Chief Executive of the Polytechnics and Colleges Employers Forum (PCEF). Like the later version, the CEF, its role is to manage the "industrial relations climate" in the "new sector".
10.	Wards' background is as a trades union official and, it transpires, is, or becomes a confidante of government officials and ministers. He is destined to be made a CBE and realises the 'honour' in the 1995 list.
11.	In the absence of any industrial relations expertise, governing bodies of the majority of colleges elect to join the CEF, at a cost of several thousand pounds per year. Wards' success in attracting colleges to his organisation enables him to enjoy many benefits. A chauffeur-driven Jaguar is one symbol of his success.
12.	The CEF under his control enlists the help of Norton-Rose, a very large firm of solicitors to draw up 'new contracts' for existing staff. These contracts represent a 'major' deterioration in the terms and conditions of staff in colleges. He places considerable emphasis upon the legal expertise he has enlisted. Principals are impressed.
13.	The contracts increase the workload of academic staff by 40% through the addition of 7 hours a week, and extending the college year by removing holiday entitlements. There are many other 'hidden extras' in the 'new contracts' and as Ward himself says in one of the CEFs bulletins....."what is left out is more important than what is put in".
14.	The object is to pressurise existing staff to change to these new contracts. In one instance, at Bath College, sixty staff were sacked for their refusal to sign the new contracts, even though their rights to enjoy the conditions that they had before the transfer are protected in law. Bath is forced to reinstate the employees.
15.	The 'offer to change to the new contracts and accept the vastly increased workload is accompanied by a lump sum inducement of approximately £500 (taxable) and 2.9% increase in salary. There is a massive imbalance in the remuneration package. The reduction in 'unit costs' is at the root of it. The aims of the White Paper, to reduce unit costs while increasing student numbers, can only be achieved by deteriorating terms and conditions of staff, because 80% of a typical colleges' budget is spent on staff salaries.
16.	All new starters and promotees on the 1st April 1994 are put on these contracts and a great deal of pressure is placed on existing 'Silver Book' staff to change contracts. Among the pressures is the withholding of the 2.9% award from those who remain on the original local authority contracts. These suggestions are contained in the CEF document entitled the 'Enabling Contracts Review' and border on an incitement to breach contracts.
17.	The CEFs position re: contracts is backed by the Secretary of State for Education and Mr.Tim Boswell, the Parliamentary under Secretary of State for FE, has a particularly close relationship with the CEF as his many letters to them indicate. All his communications are concerned with encouraging and 'assisting' the CEF to pressurise staff into the changes.
18.	This is effected by holding back 2% of the grant to colleges.....ie: their budget, unless, and until the government will is met. The (then Tory) government 'professes' an interest in how public funds are spent but has a "very significant influence" in this matter. In fact, 'interference' is probably a more accurate term.
19.	The first indication of the intention to use a holdback mechanism to 'ensure' the introduction of new 'flexible' contracts is in PCEF Bulletin No.1 dated 1991.
20.	In that bulletin, Roger Ward outlines the way in which 'holdback' will be used to effect the changes in terms and conditions. He speaks of CEF/DES policy in this area as though they were one and the same. Remember. in 1991 it was still the DES.
21.	As predicted in the 1991 bulletin from the PCEF, Boswell communicates by letter with the various 'Chairs' of the CEF board. These letters continue throughout 1993 and 1994. Some predate incorporation itself. The message is very much the same. Change the terms and conditions of your staff or risk losing grant. The link between unit costs and flexible contracts is forged in Boswells letter to the CEF on the 2nd August 1994.
22.	In a letter to the CEF dated 1st December 1994, Boswell makes it patently clear that any contracts entered into after the 1st April 1994, must be no less flexible than those the corporations have already agreed.
23.	Effectively, the government has now intervened directly in the bargaining process. What is there left to bargain about?. The letter makes it clear that the penalty for failing to observe and carry through the government desires will be a financial holdback of 2% of their budget. This, no college can afford.
24.	The realisation that colleges are not as 'independent' as their governing bodies and chief executives believed they were, starts to sink in.
25.	The spectre of 'performance related pay' had been on the cards for some time. The matter of PRP now comes out into the open. Boswell explicitly states the governments desire to introduce it.
26.	PRP is meant to pander to the interests of the self-interested. It is conveyed as the best idea to come out of 'human resource management' since sliced bread was conceived in the bakery trade. The latter was convenient for the housewife but whose convenience is served by the introduction of PRP?
27.	The answer of course is The Governments. It conveniently enables them to take control of pay in a most direct way. PRP is also a useful mechanism for dispensing with peoples services when they fail to reach the targets set. Since they have no role in the target-setting process, PRP will inevitably become a treadmill for those who are a party to it.
28.	Staff are not meant to notice that PRP and 'personal contracts' are inextricably linked. More importantly they are meant to miss the point that PRP will end the concept of 'the collective agreement'.
29.	The consequence of introducing PRP is therefore to remove a 'principle purpose' of trade unions: to collectively negotiate terms and conditions.
30.	When this stage is reached we will have exchanged the strength of 'collectivism' for the weakness of individualism. We will also have handed our destiny entirely to the Employers/CEF/Government. The individual has no bargaining strength on his own. The staff in FE are first divided then ruled.
31.	It is hoped that since the central role of trade unions will have been removed, trade unions will wither and die. This is an objective that sits well with known government intention and the school of economic thought they adhere to. Free market economics relies on the absence of regulation. Unions have a nasty habit of regulating labour costs via collective agreements.
32.	Total deregulation of the sector then is the objective. It is a strategy that extends right across the public sector, not just in FE.
33.	The plan is not yet fully unfolded. The FE sector must be further rationalised. Draconian changes to your terms and conditions are not enough.
34.	While cost efficiencies related to contract flexibility may help redress the public sector debt and make room for tax concessions at some later date, the sector needs to be reduced. The number of colleges must be cut.
35.	What better way to achieve this than to drive the less financially buoyant ones on to the rocks. No one will notice that the DfEE have rigged the charts. After all, each institution has its own captain to accept the responsibility for the navigation failure.
36.	By manipulating the funding methodology on a regular basis, financial stresses can be introduced. Artificial 'market forces' will be difficult to identify. There are ready made scapegoats leading the institutions to a glorious demise.
37.	Reference has already made to the need for a 20% reduction in the number of colleges. This is close to 100 institutions. Is yours one of them?
38.	If you have been really wide awake, you may have learned a trick or two in understanding/interpreting any government statement.  Whatever is said, assume that its' exact opposite is what is intended!     Be sure that it will be someone else who will 'pick up the tab'. A well-placed scapegoat will be present when the excrement hits the fan! You will not see the government's backside for dust. These fundamental characteristics underpin all government strategies. Indeed they are strategies in themselves.
39.	Don't allow it to happen. Fight back through the COLLEGES' LEGAL FUND. It makes sense.

 

DAVID EVANS January 1995 

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