Examination of Witnesses (Questions 260
THURSDAY 8 NOVEMBER 2001
260. Thank you. Mr Weeks, did you want to come
(Mr Weeks) Just to comment on that issue, not to labour
the point, but I would have to respond to the assertion there
is no connection between price and quality, because it seems at
odds with what Mr Rose said earlier, which I welcomed, which is
that you should not necessarily go for the lowest bid, and I would
welcome a clarification on that issue. And the question was asked
about labour inputs into the contract; obviously, numbers of staff
are not the only issue, but it is very difficult to assess what
has happened to the numbers of staff since contracting out, because
the contractors are not under any obligation to provide information
to the centre on how many staff they employ. Our anecdotal information,
information from our branches, is that, in general, the numbers
of staff have been cut quite significantly, and at a faster rate
than where the services have been held in-house. Now, obviously,
where technological change is brought in there may be good justification
for that and we would not want to object to that, but we are concerned
by the view, that is widely held, that where services are contracted
out staffing levels are consistently cut, and to levels that then
make it very difficult to provide the level of service demanded.
261. That is my experience as well. Mr McGuire,
you say, in your memorandum, that "recruitment and retention
of support service staff at current rates of pay and terms and
conditions, particularly within a buoyant employment market such
as Leeds, is a problem." Are you implying that the introduction
of what you describe as "more flexible and innovative working
practices" will lead to better terms and conditions for your
(Mr McGuire) I would certainly hope so, whether a
form of re-engineering was carried out through private sector
or internally within public sector. Personally, my aspiration
for the future is a smaller number of more productive and better
rewarded people, and break away from the term "ancillary",
which, by definition, is subservient; and we still have an ancillary
workforce, we have people paid £4.50 an hour, in a city such
as Leeds, is very, very difficult to recruit. I am currently carrying
200 vacancies in Leeds, I have a sickness level of around 10 per
cent. I employ 2,700 people, at any one point in time I have around
400 or 500 people off work. That is a real quality issue. Now
whether we address that issue through expertise within the private
sector or whether we address it within the public sector, I would
certainly hope, and this is a personal aspiration, that within
the current pay envelope we could create certainly more efficient
support services and a better rewarded workforce.
262. I was interested in Siobhain's first question,
which was about the private sector contractor reducing inputs,
and she mentioned specifically labour, to preserve profit margins,
and Mr Rose you kind of refuted that. Certainly, the picture that
we are getting at your end of the table is that jobs are being
lost, Mr McGuire is talking about the level of pay, and I would
accept Leeds is somewhat different from nine miles down the road
in Wakefield, as you are well aware, but it is a key issue, clearly,
the level of pay in an area like yours. Is not that a fair point,
Mr Rose, and has not the involvement of the private sector driven
down those wage levels and also reduced the number of jobs involved?
(Mr Rose) If we are brought in to perform services,
we agree with the client the staff we will use, we do not have
an arbitrary rule that says we get the job and then we rip staff
out, it is on an agreed programme with the client as to whether
we need 100 staff, or 50 staff, or 85 staff. Most times, the client
will believe that there are already too many staff, and that may
well be to do with the rigid pay structure and grading structure
within the NHS, and they will look for a more innovative way of
doing it, using multi-skilling and often doing things at different
times. If we reduce staff too much then we cut our own throats
and we lose the job and people are dissatisfied, and that is not
in our interests. Where we are looking to recruit staff locally,
we are frequently paying far more than the public sector Whitley
or local Trust rates because we cannot get people at that rate.
And in an economy like Leeds we are certainly paying well above
the bottom of the Whitley Council rates; if you come down into
London we are paying well over 50 per cent more than Whitley Council
rates, in order to get staff. We have tremendous problems, because
there is a skills shortage in the UK, at blue-collar as well as
white-collar level. We are not looking to bring in people who
simply can lift up a brush and sweep a floor, they are people
who have to be trained, because there is a competence in cleaning,
which means I could never be a cleaner, I may be able to be a
lawyer but I could never be a cleaner, because I would not know
how to operate and do things properly according to the standards
that are now set.
263. It is just a matter of training; the six
months training that you give to your workforce would help.
(Mr Rose) It is ongoing. My wife, of course, has no
problem, she is quite happy that I clean, even with no competence,
because it saves her doing it. But we have an ongoing training
programme, we put people through NVQ 2 and NVQ3, because that
is what we are concerned to do, and that is fact, because we do
not wish to employ people who simply do a job and have no satisfaction
and do not think we care for them. Therefore, we pay, and we will
pay above the market rates to make sure we get good staff. That
is all done in agreement with the client, it is not done on a
unilateral basis; and, therefore, it is the Trust and the private
sector who agree the way forward on that within the parameters
they have set.
(Mr Turner) Clearly, in Bradford, we do not have the
problems that Leeds have, because we do not have a recruitment
problem. But one of the issues for us in Bradford is that we do
have local pay negotiation, so we do not pay Whitley Council rates,
we actually pay more than Whitley Council rates. And one of the
issues that we have found, bringing the services back in-house,
is that we are starting to work with staff side representatives
around harmonising terms and conditions of service, because you
have got staff from contractors, if you take portering, for example,
working alongside Trust staff and Trust staff getting much more
favourable rates. And not only the rates, the policies and procedures
that we have got are our staff get sick pay; in our experience,
the staff that we have brought back did not get sick pay, so if
they are off they do not get that. So we are obviously harmonising
the terms and conditions, and we built that into our bid when
we brought the service in-house. So our experience is very clear,
that, contracted staff, their terms and conditions are less favourable
than NHS staff in Bradford, where we are looking, as I say, at
264. I wanted to come in on the staffing rates
of pay, because one of the things we discovered last week was
that there may be a better hourly rate than Whitley but what was
a problem was the overtime rates and the Sunday rates, and this
was leading to the situation where there was almost discrimination,
I would say, against Whitley staff, because if you needed somebody
to work overtime they were a lot more expensive, so this two-tier
system was very, very much in evidence. I just wondered if you
could comment on whether the whole package is paid at a higher
rate or whether that discrepancy still arises?
(Mr Rose) That would depend on the circumstances of
the contract and the location of where it is; it is impossible
to generalise across the country on that, because each contract
is separately negotiated. Certainly, in the private sector, we
do not have, in general, built in the public sector overtime rates
and structure, because we have a different way of doing things,
and we motivate staff in a different way and they are willing
to work with us to perform services out of the normal hours they
provide on the terms we agree with them.
265. Is it a common arrangement that people
do not get sick pay?
(Mr Rose) No, it is not.
266. It is fairly unusual?
(Mr Rose) It is unusual. There are companies who do
this, there are companies who do not give sick pay for an amount
of time, particularly for part-time operators, cleaning or catering
staff; but we do pay sick pay because it is in our interests to
Sandra Gidley: I would like to hear from the
Trusts on this, because I actually think it is quite a critical
issue, because there are a lot of claims that staff are paid better,
but, when you look at the overall package, I am still trying to
get to the bottom of whether it is really the case.
267. I think Mr Turner answered that, to some
extent. Mr McGuire, have you any comments on that point?
(Mr McGuire) In terms of private sector, TUPE would
normally apply, so a member of staff transferring to a contractor
would take the terms and
268. With respect, that was not the point. TUPE
does apply, so conditions and theoretical rates of pay do continue,
but, because the new staff, at the new rates, are actually cheaper
to employ for overtime purposes, there is an inherent discrimination.
If somebody is looking at balancing their books, they get the
cheaper staff in on a Sunday, and if they have to pay them time
and a half instead of double time, I have worked in other areas
and seen this happen, in, say, supermarkets, where they now have
to work Sunday, and I can see the same thing is now happening
in the Health Service, where we have PFI contracts and differently
(Mr McGuire) I have no experience of that, but I am
consciously trying to reduce all the time within the Trust. I
would much rather improve basic rates of pay than
269. But you cannot avoid it, if you have however
many hundred people it is you have off all the time, you have
(Mr McGuire) Absolutely, it is a vicious circle, one
that needs to be addressed, it is a very complex series of issues
for any staff manager within the ancillary group.
270. Are there any figures that you could give
us that might help us come to a clearer picture?
(Mr McGuire) In terms of the costs?
271. Of costs, and how things have changed since
the introduction of the PFI?
(Mr McGuire) We have not introduced PFI.
272. Contracting out, sorry?
(Mr McGuire) I cannot comment on figures for contracting
out, but the current overtime bill for my function is £25,000-£26,000
a week. That results from the absence levels that we carry.
273. Just a minor point, I am sorry to interrupt
you. I have tried to jot the numbers down as you gave them to
us. You have got a 2,700 head count?
(Mr McGuire) Yes, a 2,700 head count.
274. You have 200 vacancies.
(Mr McGuire) Around 200.
275. And you have got 400 or 500 off at any
(Mr McGuire) Yes.
276. So with a 2,700 head count, on any operational
day you have only got 2,000 people available?
(Mr McGuire) Just over 2,000 people; but, historically,
the NHS has always overestablished to cater for absence and vacancies.
277. So it should not really cause you any problems
(Mr McGuire) It should not; the true picture is around
200 people, probably, it is between two and four, but it is a
problem, it is a quality problem.
(Mr Weeks) Obviously, we have spent quite a bit of
time on this, so I do not want to go over old ground. We would
dispute some of the assertions that have been made. But I think
maybe the best way of carrying it forward is if we were to share
with the Committee the evidence that we have accumulated on pay
rates, provided by private contractors, where we commissioned
the University of East London to carry out a survey in London.
Now you would expect, if what is being asserted is happening,
that private contractors are paying more than the NHS, that if
it was going to happen anywhere, with no disrespect to other areas
of the country, it would happen in London; and the evidence was
not, overall, there were some individual examples, here and there,
but overall the evidence did not support the view that the private
sector were paying more. The point has already been made about
unsocial hours and sick pay, and, I have to point out, a reference
was made to not allowing part-time staff to have sick pay; the
majority of staff in these groups, particularly in cleaning, are
part-time staff, so you are excluding the majority. Individual
companies do differ, some are slightly better than others, but
in our most recent assessment of the major companies that have
corporate policies, all of them were inferior to the NHS sick
pay scheme, to a greater or lesser degree, and I can share information
on that. And nobody has mentioned so far, so I will, the issue
of pensions. None of them, and despite some recent improvements,
which we welcome, offer a pension scheme for their new staff that
is remotely comparable to the NHS, and a number of them, unfortunately
including some members of the BSA, who in other respects are good
employers, do not offer anything. So the whole employment package
needs to be looked at, not just looking at basic rates of pay.
278. Can I just come in on pensions, because
I was going to raise those. Because I understand that the TUPE
regulations specifically exclude pensions, that the new employer
has to provide a pension scheme which is broadly comparable. But
then we come across GAD, the Government Actuary's Department,
which I understand is recommending pensions considerably lower,
20 to 25 per cent below those calculated by independent actuaries;
so much so that one of my constituents has written and said he
has got 30 years of NHS employment, and in fact is only going
to get 24 years' pension from his new private employers?
(Mr Weeks) I think I would want to make clear that
the NHS has a policy of requiring contractors to offer broadly
comparable schemes for transferred staff; that policy is enforced
by GAD. And, broadly speaking, UNISON would say GAD has done a
good job, and we very much welcome what the NHS has done, in respect
of that policy, as far as transferred staff is concerned. I am
aware of the issue that you have been written to about because
we have been written to about it. There is some dispute occasionally
about the way GAD carries out their assessments, but I would not
want the Committee to get the impression that it is about the
transferred staff and the way GAD deals with the issue that our
main issue is, there is an issue, and we are talking to GAD about
that particular assessment they make. Our real, fundamental issue
is about the new staff, who are not covered by the current provisions.
So there is an issue about GAD, but I would say the real focus
is the new staff. And, obviously, with the high levels of turnover
that you have within these services, very quickly the new staff
can become a majority of the workforce within three to five years.
279. May I move on, Mr Chairman. If we can go
back really to quality issues. What I am interested in with cleanliness
is how it is actually assessed. If you look at the recent NHS
Trust performance ratings, these tables showed that just over
20 out of the 170 Trusts were underachieving, none significantly
underachieving, and cleanliness in this case had been scored by
what were called "a patient environment team inspection".
Now nobody tells us exactly the constitution of that team, were
patients involved, was the inspection carried out before or after
a clean, and I would just like to know how you assess quality
of cleaning within Trusts?
(Mr Turner) The key for us in Bradford is agreeing
quality standards with the users, and that will be different in
every area that we provide the service. There will be some core
quality standards across all clinical areas, but our belief is,
because we are providing that service to the users, we have a
user group, and they sit down with us and they work out quality
standards, and then my management team on the cleaning side evaluate
that quality standard, and the sister on the ward, or the head
of department, signs off to say we have met those standards that
they have been party to agreeing.