Examination of Witnesses (Questions 220
WEDNESDAY 23 JANUARY 2002
220. What is holding up the 15 that are ready
(Mr Douglas) I do not think there is anything holding
up those 15 that are ready to go. I have not got the details of
the 15. Some of those will already be under construction; this
is just that there are 15 that are between the point of the contract
being signed and the hospital being up and operational, so they
will be in various stages.
221. Industry tells me that you are not awarding
any PFI contracts at the moment until these discussions with the
trade union are over, so tell me when you last let a contract.
(Mr Douglas) I have not got the date with me of when
we last let a contract. We have not agreed any of the major contracts
since we have been piloting this scheme and that was deliberate.
Until we have decided how this is going to work, then we would
not want to sign contracts again.
222. So, if my information is correct, it has
been held for some months and industry tells me it is likely that
it is going to be held for some months more. That must have an
effect on the hospital building programme, must it not? That is
what industry again is telling me.
(Mr Douglas) We are still aiming to meet the targets
that we set ourselves for delivering the hospital building programme.
223. Well, industry tells me that, unless you
let contracts fairly quickly, no new hospitalno contracts
that are awardedwill open in the lifetime of this Parliament.
Are they right?
(Mr Douglas) I am not totally sure that is the case
224. That is pretty worrying.
(Mr Douglas)But it is probably likely. I am
trying to think of the build period for a hospital. For a major
hospital you are talking quite a long build period.
225. I know that. That is exactly what industry
is saying to me: if you do not get your finger out, you will not
see new hospitals getting off the ground.
226. Perhaps we could have a note on where you
have got to with this?
(Mr Douglas) Yes.
227. I have some concern about this because
a major hospital redevelopment, one of the very biggest, is in
my constituency. It was in the first tranche of announcements
after 1997 and not a brick has been laid, although some precursor
schemes have, in fact, been carried out using conventional finance.
Now, you have just told my colleague, Mr Mudie, that while you
are piloting the secondment of staff rather than the transfer
of staff, you are not letting any
(Mr Douglas) The new ones are not being signed. This
will be resolved very soon.
228. How long has this been going on?
(Mr Douglas) I believe we started negotiations in
229. And how long could you expect it to go
(Mr Douglas) Again, personally, I do not think I have
the information to be able to tell you.
230. Has this been reported to Parliament?
(Mr Douglas) It was discussed, I understand, extensively
at the Health Select Committee with the Secretary of State.
231. Just very recently?
(Mr Douglas) The Health Select Committee did an inquiry
into the use of the private sector in the NHS so I assume this
was picked up on within that.
Mr Cousins: I would appreciate more detail
on all of this.
Chairman: We would like to hear from
you perhaps in a note where we have got to on the procurement
side, but let us now turn to the Gateway review programme.
232. As a result of those questions, is the
problem negotiating with the trade unions or negotiating with
the contractors on these terms?
(Mr Douglas) First of all, I would not necessarily
like to talk about a "problem" here. What we are trying
to do is create a structure that works which partly involves discussions
with the unions, partly with the private sector, and partly involves
bringing those two together and getting a management of the contract
structure that actually works.
233. I understand that is the aim but is it
the position that the contractors are saying that they are not
willing to sign on the dotted line if those are the conditions?
(Mr Douglas) No, it is not. Industry has generally
been very supportive in trying to help us design this scheme.
234. So that is not the case?
(Mr Douglas) Yes. They have been very helpful in trying
to help us design it. They are not being difficult with us.
Chairman: We must move on to the Gateway
235. You say in your submission that NHS Estates
are using the Gateway review process and will apply lessons learnt
from this experience. How many reviews have been undertaken?
(Mr Douglas) They have done, I think, 20 Gateway reviews
and have helped the OGC in working on those reviews.
236. Alongside DHSS?
(Mr Douglas) Yes.
237. What sort of lessons have emerged?
(Mr Douglas) There are two elements: one is the clarity
of accountability at a senior level within the organisationthe
point Duncan made earlier onmaking sure that procurement
and major investments are focused on at board level and you have
someone responsible at board level. The other area where we have
not probably done as well in the past as we should have done is
in post-project evaluation, making sure that after the event we
have a proper, full and formal evaluation.
238. You mean passing the message on from performance?
(Mr Douglas) Learning the lesson. Saying, after the
event, "Look at what we did right. Did we achieve all the
objectives?". It is always written in formally, but we have
probably not been as rigorous in that as we should have been.
239. That does not say much on the likelihood
that the lessons are passing from your department to others, does
(Mr Douglas) I think what we are doing in all of this
is learning how to do things better all the time. We are not saying
that nobody ever did anything on this or we never learnt any lessons;
we are saying that the formal standing back and the formal look
at it was not done as well as we thought.
4 See Ev 63-68. Back
See Ev 63-68. Back