I am confident that it will be a way for us to get a change of mind on the part of the executive on how best to deliver public services

Bill Speirs STUC general secretary

STUC general secretary Bill Speirs said the agreement would be judged a success if it led to a reduction in the use of private finance deals.

The memorandum represents the first time ministers and the trade union movement have signed a joint document formalising their working relationship.

It sets out various commitments for both parties including:

• Promises to "extend opportunities" for the STUC to influence executive policy

• A guarantee of twice yearly meetings between the first minister and the STUC General Council.

Mr Speirs told BBC Scotland the agreement formed part of the STUC's vision for a "social partnership".

"The part of the memorandum of understanding that we have just signed is that it will be reviewed after a year.

"I hope that at the end of that year we will be able to demonstrate that the standards for workers have improved, whether that be in the public or private sector.

"And that we as trade unionists have been able to feed into a process that will create jobs and create better jobs whether that be in the hospitality industry, in hospitals or manufacturing."

"It is a memorandum of understanding on how we will work with the civil service as well as the politicians and it is essentially about how we work more effectively together and unions can be engaged in the formulation and delivery of policy.

Bill Speirs: "Historic move"

Mr Speirs said he hoped the agreement would act to improve Scotland's manufacturing and service sectors.

The STUC, he said, believed the UK Government and the Scottish Executive were making a serious mistake "going down the Private Funding Initiative (PFI) route".

Mr Speirs said: "This memorandum of understanding might not be something that people would immediately grasp hold of but it's an historic change in the relationship between organised labour in Scotland and government in Scotland.

"We now have a written agreement of how we deal with one another and in a way that is mutually beneficial."

Union confidence

Mr Speirs insisted he was "confident" of achieving the aim of reducing the use of PFI and public private partnership (PPP) deals.

He said the STUC would examine the record of PFI and PPP deals to see "what is working well and what is not working well" and bring this information to the discussions with the executive.

He added: "That's why I am confident that it will be a way for us to get a change of mind on the part of the executive on how best to deliver public services.

Jack McConnell: "Making a difference"

During his speech, Mr McConnell insisted: "The best partnerships between the public and the private sectors have delivered outstanding new services to the public.

"But if the only innovation the private sector can offer is on the basis of reduced employment standards, that is not good enough for me.

"However for those who can rise to the challenge and use their experience to the benefit of the public sector we should work with them.

"This marks an important development in our relationship and demonstrates the importance both sides place on our joint working.

"But it is only a starting point - a springboard fro partnership, working on our shared interests to secure the parity of esteem that we both seek."