Labour will seek to end outsourcing of council contracts to private firms

Labour will seek to largely end the outsourcing of council contracts to private firms if it enters government, John McDonnell has said.

Rubbish collection, cleaning and school dinners could be taken back in-house under the plans set to be unveiled by the shadow chancellor later on Saturday.

Explaining the proposed radical shake-up of local government, Mr McDonnell told BBC Radio 4’s Today programme: “Looking at the contracts that we have at the moment, most of them are below five years.

“They’re coming to an end and then the council will bring it back in house, manage the service effectively, save money, money won’t then be going into the pockets of shareholders in particular, but also they will be more stable.

“Remember we’ve had the experience of Carillion, for example, collapses and you have something like 200 schools who have been affected, large numbers of councils, things not being built, services not being delivered and people being laid off.”

He insisted councils were “demanding” the change.

He said: “If you look at example after example when the council says ‘look, we’ve had enough of being ripped off by private contractors, we’ve had enough of poor service’, they’ve brought things in house already and they’ve saved money and had a more efficient service.”

Mr McDonnell and shadow communities secretary Andrew Gwynne will announce the policies at an event in central London on Saturday morning.

The shadow chancellor is expected to say: “After year upon year of failures, the public has rightly lost confidence in the privatisation of our public services and the carve up of the public realm for private profit.

“The Government’s ideological pursuit of privatisation and outsourcing has seen the public pay the price as fat cat bosses count their profits.

“It’s time to end the outsourcing scandal which has seen private companies rip off the taxpayer, degrade our public services and put people at risk whilst remaining wholly unaccountable to the people who rely on and fund these services.”

Mr Gwynne will say: “Labour will end this racket and ensure that our vital public services are delivered in the interests of the people our local authorities are here to serve, not in the interest of outsourcing firms’ profit margins and wealthy shareholders.

“People are more important than profit, and our public services belong to local people.

“Labour will set out in law that in-house delivery of public services delivered by the public sector will be the default option for councils.

“In government, Labour will boost local economies by spending taxpayers’ money on local suppliers and local workers, and we will support councils as they deliver radical change and give power back to our communities.

“Our plan is a plan for public services run for the many, not the private interests of the few.”