Lyn Fraser, Impact of Contracting Out of Female NESB Workers: Case Study of the NSW Government Cleaning Service, Ethnic Communities Council of NSW Inc., 1997.

Abstract

Lyn Fraser, Impact of Contracting Out of Female NESB Workers: Case Study of the NSW Government Cleaning Service, Ethnic Communities Council of NSW Inc., 1997. The debate over the use of market-based systems, such as commercialization and contracting-out, for the delivery of public services has raged over the past 10-15 years. Noticeably absent in this debate, though, has been actual empirical research on the impact of these reforms. An early study on the contracting-out of garbage collection in the UK which arrived at a figure of 20 per cent cost savings has led to the almost axiomatic belief that such savings will occur whenever and wherever such market-based systems are introduced. The Report by Lyn Fraser goes a long way to filling this void in the literature. In what should be a central document to any future discussions on 'public sector reform' Fraser meticulously traces the impact of the contracting out of government cleaning services on female NESB workers. In so doing she raises broader issues about this whole 'reform' process which no one working in this area can ignore. In 1989 the then NSW Government Cleaning Service (GCS), which was responsible for cleaning in government schools, was placed under pressure to eliminate the financial losses it was then running. The State Government formed an agreement with the unions to raise productivity and reduce costs. These objectives were to be met through the commercialization of the service, and changes to supervision, administration, staffing, the spread of working hours, technological change, and training methods. In return, the service would remain in public hands. Under this agreement, employment levels in the GCS were reduced from around 12,500 to 7,500 through voluntary redundancies. The remaining workforce was approximately 77 per cent female, over the age of 40 years, and nearly half of non-English speaking backgrounds (NESB). The new cooperative arrangements between the unions and management achieved cost savings in excess of the targets, estimated to be $70 million a year. As a result the GCS turned a healthy profit of $ 13 million in 1991-92, and again in 1992-93. Despite these achievements, in 1992 the Government decided to proceed with contracting-out of cleaning services to the private sector; a decision roundly criticized at the time. Tenders were called for the contracts which were awarded to three companies: Tempo Services Pty Ltd, Berkely Challenge Pty Ltd, and Menzies International (Aust) Pty Ltd. Of significance is the fact that the GCS was prohibited from tendering for the contracts. The story of the process by which the contracting-out of the cleaning services, which Fraser details, is of more than just historical interest. It highlights the essentially ideologically driven nature of the 'reform' process, which explains why so little empirical research has been undertaken. A Government that has settled on the objective of privatization will pursue this goal relentlessly. At first the pressure to improve the service, on the basis that it was running at a loss, was undertaken through commercialization, keeping the service in public hands. Yet when a profit was made, privatization was pursued, on the argument that profitable ventures should be in private hands, even though this meant reneging on earlier agreement. The long-term fiscal implications of this were ignored--for a momentary gain in cost reductions, the public service lost a valuable and steady income stream. Moreover, the equity objectives of the GCS in employing disadvantaged workers could no longer be guaranteed. Needless to say, the workers interviewed by Fraser felt betrayed and cheated by the Government's reneging on earlier promises to keep the service in public hands. Fraser undertook an extensive study, the focus of which 'was to examine the experiences of immigrant women of NESB' (p. 20). The study comprised face-to-face interviews with 45 cleaners who had been previously employed by the GCS and then subsequently employed by one of the three private firms receiving a contract. …