EmailCharity leaders have drafted a letter to the government calling for it to scrap the rules on public service pensions and widen the debate around two-tiered workforces.
The letter, penned by the Association of Chief Executives of Voluntary Organisations (Acevo), and sent yesterday to John Hutton, head of the public sector pensions commission, calls for the government to scrap the "fair deal" guidance which guarantees an equivalent pension to staff working for outsourced public sector service providers.
Acevo says that the guidance acts as a barrier to more charities taking on the running of public services and risks derailing the Big Society. Under current rules, when a service is outsourced from the public sector, staff that transfer with that service are guaranteed a pension equivalent to that received under their public sector employer.
Acevo said it had penned the letter because the situation gave advantage to long standing providers of public services and excluded many charities from competing because they are unable to balance the books.
"This government has spoken of their real commitment to opening up the public service market and passion to build a 'Big Society' with charities playing a major role in public service delivery, but this guidance could act as a real barrier to them making their plans a reality," writes Acevo's chief executive, Stephen Bubb, who has also written to the chancellor George Osborne and Cabinet Office minister Francis Maude.
He adds: "Charity leaders also want a pensions system based on fairness. Staff delivering public services should have access to a decent pension, but not at the expense of public service users, many of whom are extremely vulnerable at a time of public spending cuts. Nor should it be at the expense of other staff working in the same organisations."
The letter adds another dimension to the debate surrounding the issue of benefits in two-tier workforces. While Maude said he was "minded" to abolish an informal agreement for benefits given to outsources private sector workers to reduce the cost of future outsourcing, this led to criticism from unions that individuals doing the same job could end up having different rates of pay and benefits and lead to more vulnerability for public sector workers.
But Acevo argues in its letter that the status quo has led to "staff transferred from the public sector receiving gold-plated pensions at the expense of others."
"We're not in this to lower people's pension or distort what people can get," says Peter Kyle, deputy chief executive at Acevo. "More charities will be competing for contracts and more people joining. Some people coming with exorbitant pensions which were negotiated decades earlier, which you wouldn't get if you were entering now. The cost of these teams are taken as a whole so the people with less are subsidising colleagues who have more. So if you're going to compete it makes it more difficult. What we're calling for is a rigorous debate because this isn't sustainable. It's a very complex landscape and every time the government tries to incentivise, they come up with short term fixes and this creates pile upon pile of difficulties.
"We want a wholesale look at the barriers. There's absolutely no doubt that the Big Society agenda would be affected by this."
From Bubb's Blog
From Flip Chart Fairy Tales
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