A Gathering Storm Procurement, Re-tendering and the Voluntary Sector Social Care Workforce A Study for the Voluntar

1. A Gathering Storm? Procurement, Re-tendering and the Voluntary Sector Social Care Workforce A Study for the Voluntary Sector Social Services Workforce Unit Dr Ian Cunningham & Professor Dennis Nickson Department of HRM University of Strathclyde

2. Research Aim The research assesses the impact of re-tendering social care services on voluntary sector workforce morale, commitment and compliance.

3. A Challenging Financial Landscape for Scotland�s Voluntary Sector Signing of the �Concordat� Continued pressure on voluntary sector funding Deleterious impact of the �contract culture� �Removal of �ring fencing� � Supporting People and Mental Health Single Outcome Agreements Credit crunch � everyone suffers, but the voluntary sector more than others EU Procurement Directive � potentially the most significant challenge to the sector?

4. The Impact of TUPE A wider definition of the transfers covered by TUPE � in particular the inclusion of a new definition of �service provision changes� Refinement of the effect of TUPE on changes to terms and conditions of employment and dismissals for reasons connected to the transfer Increased opportunities for employers to dilute the protection of TUPE in the event of insolvency The introduction of a new obligation on the part of the old employer to �provide employee liability information� to the new employer

5. The Impact of TUPE To what extent can employers vary terms and conditions in connection with a transfer? Which employees are transferred? Which employer is liable for a failure to inform or consult? To what extent does liability under collective agreements transfer? Do employees have the right to object to transferring? �

6. The Impact of TUPE Commentators suggest that the extent of uncertainty with regard to TUPE has been exacerbated by the ever-increasing drive towards privatisation, contracting-out and contracting-in. Although TUPE continues to provide important legal safeguards for workers the provisions also allow employers to take advantage of increased opportunities to cut terms and conditions

7. Why Do People Work in the Voluntary Sector? Worker orientations in the sector shaped by: Traditional transactional and relational elements, but also strong Voluntary Sector Ethos (VSE). High level of commitment and willingness to work beyond contract. Commitment and willingness to work beyond contract undermined by downward pressure on terms and conditions of employment. VSE does not sustain commitment and willingness to work beyond contract when transactional elements are undermined.

8. Research Objectives To assess organizational impacts of re-tendering -turnover/churn, absence increased, decreased or remained stable during and following re-tendering exercises. To assess whether employee commitment to the employing organisation and people they support increased, decreased or remained stable during and following re-tendering exercises. The reasons behind any changes.

9. The Research Three case study organisations: A provider that had lost several re-tendering exercises (Sapphire) A provider that had won several re-tendering exercises (Emerald) A provider that had won and also lost services through re-tendering exercises (Diamond) Interviews with key respondents, including HR Directors, Operational/Business Development Managers, in organisations who were responsible for developing and sustaining current business Interviews with employees, both managers and support workers in the case study organisations

12. A Challenging Market Environment for the Voluntary Sector Intensified competition from within and outside the voluntary sector: �You can�t be Penelope Pitstop to win, you have to be more like Dick Dastardly� (negotiator) Different interpretations of EU Directive on re-tendering. Decisions on re-tendering made largely on basis of cost. Weakness of government measures to protect the sector. Erosion of co-operation and partnership.

13. Organizational Impact of Re-tendering

14. A �Winner� �It�s a worry for the future if you�re going to end up with all kinds of staff on different terms and conditions, and how you manage that and whether you can get away with harmonising it, which, in some ways you would like to do.� (HR Manager, Emerald)

15. Gaining Staff �They don�t trust us. I think they were still worried about their terms and conditions when they transferred over. I there was anxiety and it took us months to try and reassure people what we were all about, what our values were, what was going to happen to them and what was not going to happen to them.� (HR Respondent, Emerald)

16. Losing Staff �We build, instil the values with the training we give them, the way we want them, and then we say �well sorry, you�re going elsewhere�. I mean it�s absolutely tragic � Ethos, that�s what it is and that in my view, in HR terms, is the most difficult to instil, to get people on board with that, and therefore its one of the greatest losses, when we lose our people. There�s the tangible investment in terms of training that adds stuff, but there�s also that unquantifiable aspect.� (HR Manager, Sapphire)

17. Employee Voices � Working in the Sector Employees joined the sector for a variety of reasons Underpinned by a strong Voluntary Sector Ethos Evidence of extensive organizational citizenship behaviour. �It began with an altruistic wish to help and make things better for folk � and that was the kind of area I wanted to go into � it�s a kind of underpinning motive over the years.� (Area Manager, Sapphire) �To help people to make a difference in their lives, because why shouldn�t they have the same opportunities as you and I and I think that�s really, really important that we are all equal.� (Support Worker, Emerald).

18. Overwhelmingly Negative Reactions to News of Re-tendering Apathy or confidence in successful outcome Shock and surprise at re-tendering Reflecting badly on employees as service providers Team spirit undermined Lack of control, disempowerment Poor information Feelings of insecurity Some quitting and job searching Fears for service users

19. Employee Reactions �I remember what I did was that I burst into tears in the meeting, we were in a managers� meeting and we were told and I can�t think of any words to describe how awful I felt at that point.� (Employee, Emerald). �Well I thought it was a kick in the teeth to us. It was more or less them telling you you�re doing your job, but you�re not. There must be something not right when you were re-tendering.� (Support Worker, Sapphire).

20. Losing a Re-tender: The Employee Perspective Shock and perceptions of �disempowerment� Uncertainty regarding job security, employment conditions Organization of work, hours, pace etc left untouched for front line staff Line manager�s work could be significantly intensified/redundant. Dissatisfaction with some managers retaining employment Opportunities for union growth Continuing commitment to service users and undertaking OCB.

21. Winning a Re-tender: The Employee Perspective Significant relief but mixed perceptions regarding future employment security Some changes to working hours and intensification of work for line managers �Survivors syndrome� and concerns re private sector Concerns over health and safety as a consequence of stress over retendering Anger at sacrifices made to terms and conditions

22. Why Did Workers Retain Their Commitment?

23. Retendering: A Gathering Storm for the Voluntary Sector? �I know that as part of the re-tendering process Emerald cut the hourly rate. I can understand why they felt they needed to do that in terms of obviously it�s really competitive and that they were concerned that quite a big part of the re-tendering process was judged on costs. So I can understand that but when you�re reading in your news bulletin about how Emerald as an organization can�t probably meet the requests of the union and the workforce in terms of raising their hourly rate for direct support staff � for Emerald to go and voluntarily cut their hourly rate there�s a kind of conflict there and I can understand why they did it � but at the end of the day we�re supposed to be about valuing people and that should about valuing the workforce as well � the hourly rate that our direct support staff get is you know doesn�t reflect how much really we should value them.� (Support Worker, Emerald)

24. Impact on Service Users and their Families Limited consultation, regardless of level of satisfaction from service users and families Awareness of re-tendering limited among some service users and families Anxiety receded once decisions were made and services were seen to remain the same

25. Conclusions Re-tendering potentially reshaping the character of voluntary sector organizations. Continuity in employment conditions and service quality key to sustaining commitment. Impact of TUPE and union management interventions crucial. When will employers turn to ETO provisions of TUPE? Continued anxiety of long-term impact of re-tendering and repercussions for psychological contract.

26. Recommendations Gather intelligence on private sector providers Consistency of advice on TUPE Support for Line managers Joint working with employers and unions to highlight worst consequences of re-tendering More information disseminated to service users and families Greater voice for service users and families on re-tendering decisions Greater transparency on re-tendering decisions Continue to campaign for �full-cost recovery�.