113. Intrinsic to PFI schemes is the maintenance
of the fabric of the hospital by the private sector partner and
also the operation of hotel services. This involves private contractors
taking over the non-clinical responsibilities, and the transfer
of non-clinical staff to the contractor. Where staff are transferred,
following a PFI project, the consortia must ensure that Transfer
of Undertakings (Protection of Employment) (TUPE) applies and
pension schemes have to be broadly comparable to the existing
114. While trades unions welcomed TUPE protection
for transferred staff, most of those submitting evidence remained
opposed to staff transfers. UNISON's view of private sector involvement
was unequivocal: "The experience of private sector provision
of support services in the NHS has been one of failure. Private
sector provision has not improved the quality of services, it
has broken up the NHS team and created a two-tier workforce and
it creates obstacles to the provision of integrated services".
To support its argument, it pointed to the Government's own audit
of cleaning standards of April 2001 in which 20 of the 23 hospitals
that failed the audit were from the private sector.
Mr Stephen Weeks, National Officer for UNISON, was also concerned
that new staff taken on by the private sector would not be offered
similar conditions of service, resulting in the creation of a
'two tier workforce'. He further argued that pay and conditions
would deteriorate with private sector contractors unable to offer
enhanced terms and conditions for fear of being undercut by competitors.
A rather different position was taken by Amicus-AEEU, whose member
survey of those transferred to private contractors suggested high
levels of satisfaction and a strong sense of protection in their
115. Although Registered Nurses are not transferred
under PFI schemes, the RCN raised concerns about the increase
in the proportion of non-registered nurses at PFI hospitals. In
its recent survey, only one of the six largest schemes had reported
growth in the number of registered nursing staff employed by the
trust, and in one trust the number of non-registered exceeded
that of registered nurses.
However, we have not received any evidence to compare this with
other new schemes or existing trusts.
116. The trusts also voiced some doubts over the
practicalities of staff transfer. When we took evidence in Durham,
Councillor Earley argued that staff transfer created "a lot
of uncertainty on a very individual, person by person basis"
and that his preference would be for all staff to remain in the
Mr Phillip Turner, Director of Operations for Non-Clinical Support
Services, Bradford Hospitals NHS Trust, explained the potential
"I think you do lose control of the services,
in a number of ways ... The debates that I am having with nursing
at the moment, is that they want the soft FM [Facilities Management]
people to be part of the ward team, they are not bothered about
having the budgets, but they actually want them to be part of
the team ... they said that in their experiences they have not
felt that when they have had contractors on the ward they have
actually felt they belong to the Trust, they work for somebody
else, and they have found that difficult."
117. When we visited Durham, the ward sisters explained
that they now worked within a structure called 'Patient Focus
Care'. This brought together both NHS staff and contract staff
on the wards under the management and leadership of the ward matron.
The matron had the authority to organise all the contract staff
as if they were NHS staff.
This had had positive effects and re-established a team approach.
This was not the experience in Carlisle where the private sector
partner retained the day-to-day management of its staff.
118. The Government is clear that it considers staffing
matters to be important. The 2001 Labour manifesto contained the
commitment that: "PFI should not be delivered at the expense
of the pay and conditions of the staff employed in these schemes.
We will seek ways in which, within the framework of PFI management,
support staff could remain part of the NHS team".
As part of this commitment, the Department is now operating three
pilot schemes at Stoke Mandeville, Roehampton and Havering in
which 'soft' facility staff retain all their NHS employment terms,
but are managed by the private sector (the "Retention of
119. Notwithstanding their opposition to staff transfer,
the unions were willing to work with the Retention of Employment
Model (REM). However, both the GMB and the NHS Confederation were
concerned that progress on the pilots schemes had stalled.
They argued that this was because of a reluctance by the private
sector to give up direct control of staff terms and conditions.
Certainly our witnesses from the private sector gave the REM a
cool reception. The Business Services Association (BSA) believed
that the model presented numerous potential difficulties. Amongst
many employment issues, the BSA argued that the Retention of Employment
model would itself create a "them and us" culture between
the trust's employees and those employed by the private contractor,
which would become more pronounced as secondees were offered posts
on promotion for which they had to become employees of the private
terms of risk, the BSA was concerned that the private contractor
would not be comfortable managing the risk of penalties for non-availability
of services when the contractor did not employ staff directly.
The BSA suggested this might entail additional risk costs in the
contract. Similarly, any penalty regimes would be hampered by
the need to establish whose staff were responsible for any problems
caused. The CBI
believed that the REM was "deeply problematic" and that
"workers would lose out on promotion and blame each other
where problems did arise".
KPMG was of a similar view stating that there has been "considerable
private sector concern about the pilot projects where the workforce
remain in the public sector".
120. There is no dispute that staff transfer has
proved a highly contentious issue, and there are genuine concerns
about the creation of multi-tier workforces working with different
pay and conditions. If staff transfers are an inevitable part
of the PFI process then greater thought needs to be given to ensuring
that NHS and private sector staff have a clear understanding of
their roles and duties. We were impressed with the Patient Focus
Care model in Durham and believe that the Retention of Employment
Model offers the greatest potential for a well integrated workforce.
We recommend that the Department redoubles its efforts on the
Retention of Employment Model and look forward to seeing the results
of the pilot schemes.
121. One of the benefits sometimes attributed to
PFI is that of innovation in design. Mr Stone of KPMG told us
that the PFI released "an army of skills" in the private
sector, when contractors were given a brief which demanded a particular
end-product, rather than one which demanded control over every
last detail. However,
the evidence here is mixed. UNISON was unimpressed with the standard
of design in the PFI projects it had studied, complaining of faults
which it attributed to cost cutting and sheer bad design.
The Commission for Architecture and the Built Environment (CABE)
also questioned the delivery of better design. Its design review
committee and enabling panel has advised its clients working on
PFI projects and therefore has close experience of them. It concluded
that to date "many PFI hospitals have failed to deliver the
step-change in the quality of the built environment-in terms of
functionality, overall appearance and comfort-that is clearly
desired by the Government".
CABE also referred to evidence from the King's Fund, the IPPR
and the Office of Health Economics which supported their view.
122. This may be due, in part, to the speed with
which PFI projects are concluded. Several witnesses argued that
there was not sufficient time allowed for design. Furthermore,
we have seen examples of where the design team and the trust have
not been sufficiently close. This also can create problems. In
Carlisle we were told that, during the design process, clinical
staff were shown small scale models which looked impressive, but
disguised the fact that spaces between beds were smaller than
anticipated. They suggested that the use of full scale mock-ups
of wards would have prevented these problems.
123. Closer input into the design process by trust
staff would be beneficial. We recommend that staff should have
a greater input in the design phase, even to the extent of requiring
that there should be a full mock up of a ward in advance of building
work taking place. We also recommend clinical expertise is actively
involved in the PFI team in order that functional and clinically
operational relationships are understood and incorporated in the
design of the project.
124. Given that PFI is relatively new, that the
money tests are often marginal and that those tests have created
much uncertainty, we recommend that more capital monies are made
available for major conventionally procured schemes so that PFI
schemes could then be properly monitored against a significant
number of conventionally procured schemes and the lessons from
both learnt for the future.
153 Ev 47. Back
Ev 359. Back
Ev 117. Back
The IPPR assert that if PFI had been abolished at the time of
the Comprehensive Spending Review and the same capital spending
had been undertaken through normal public spending channels, the
sustainable investment rule would easily have been satisfied ,
and by definition so would the golden rule (the golden rule states
that over an economic cycle a government must only borrow to invest).
[Building Better Partnerships p.82.] We recognise that
any public spend ultimately will have an impact on economic indicators. Back
Ev 359. Back
Ev 361. Back
Ev 7. Back
Ev 302. Back
However, proposed changes to the European Commission's rules
for public procurement (COM (2000)275 final) may mean that public
sector managers will no longer be able to select a preferred bidder
to negotiate contract details on an exclusive basis. Industry
is concerned that this will significantly raise the cost of tenders
and deter contractors from working on public sector deals. Back
PFI in the NHS: A Dossier, GMB, 2001. Back
Ev 335. Back
Ev 333; Oxfordshire PFI Alert Group comprises local branches
of the BMA, the RCN, the NHS Consultants' Association, the CHC,
health trades unions and the Oxfordshire Pensioners' Action Group. Back
Ev 333. Back
Ev 294. Back
Ev 48. Back
Q204; Ev 75. Back
Ev 319. Back
See para 54. Back
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Ev 86-87. Back
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Ev 244; Ev 352. Back
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