Memorandum by GMB (PS 11)
The GMBBritain's General Unionwelcomes
the opportunity to submit evidence to this Health Select Committee
inquiry. We would also welcome the opportunity to present oral
evidence. The GMB represents 25,000 employees in the health care
sector, the majority of whom are ancillary workers with direct
experience of private sector involvement in the NHS.
1. The GMB believes that the NHS Concordat
with the private and voluntary sectors should be a short term
2. The Concordat is an unnecessarily expensive
mechanism for reducing shortlists and that more creative, value
for money solutions should be found such as the removal of bed
blocking by elderly patients inappropriately staying in hospitals.
3. There should be rigorous measures to
regulate quality standards in private hospitals.
The Private Finance Initiative
1. The Private Finance Initiative is not
providing value for money in the NHS.
2. There is substantial evidence that the
Private Finance Initiative reduces bed numbers and increases patient
throughput with unhappy consequences for patients.
3. The Private Finance Initiative increases
the costs to NHS Trusts on a long term basis thus threaten resources
for other valuable services.
4. The Private Finance Initiative leads
to cuts in terms and conditions for NHS staff thus undermining
staff morale, motivation and service quality.
5. There is a severe danger that the Private
Finance Initiative will lead to commercial considerations being
placed above patient interests.
Public Private Partnerships
1. Previous private sector involvement in
NHS support services has lead to a deterioration of service quality.
2. The experience of GMB members in the
Health Service is that private sector contractors pay worse terms
and conditions and provide inadequate pension arrangements thus
undermining the NHS' role as a decent employer.
THE NHS CONCORDAT
The GMB has no objections to measures to reduce
NHS waiting lists on a short term basis whilst further investment
is taking place to provide extra beds. GMB is concerned, however,
that the Concordat is an open ended arrangement. We believe that
in the long term better value would be achieved for the taxpayer
if further facilities were provided by the NHS to reduce waiting
lists rather than relying on expensive private sector provision.
In the Health Service Journal on 6 September 2001 a spokesperson
for a large acute trust stated that NHS hip operations cost £3,500
whilst in the private sector they cost £9,000, he followed
this by saying that "the big providers are whacking up the
prices". GMB has serious concerns that if NHS Trusts come
to rely long term on private providers they will be held hostage
in terms of price and incur unnecessary costs which could be spent
on improving services.
The GMB would suggest that a major contribution
could be made to the reduction of waiting lists without resorting
to the purchasing of expensive private beds by tackling the problem
of bed blocking by elderly patients who have no suitable residential
home to go to. This problem was recently highlighted in June this
year by a report by the Policy Studies Institute commissioned
by the NHS Executive London. The GMB believes this situation should
not be allowed to continue given the spare bed capacity in the
care sector and that the NHS should work together with local government
social services departments to resolve this problem.
The GMB believes that if private sector hospitals
are already providing services to NHS patients as a result of
the Concordat, even, as we hope, on a short term basis, then there
is an urgent need to ensure that standards of care are enforced
and that private hospitals are appropriately accountable. In this
context we welcome the provisions in the Care Standards Bill to
regulate the private and voluntary health sector. Standards need
to be enforced as soon as possible and the cost considerations
of effective regulation must not take precedence over patient
The GMB believes that the Private Finance Initiative
is a failed experiment. There is no evidence that it has produced
better value for money or better services in the health sector.
We would draw the Committee's attention to the conclusion of the
June 2001 IPPR report on Public Private Partnerships which stated
"of (hospital) PFI projects on which data exists, none .
. . show significant value for money savings when set against
the Public Sector Comparator".
Attached to this document are two pieces of
research commissioned by the GMB into the effects of the Private
Finance Initiative so far in the NHS, including details of losses
in beds. These reports highlight the following issues:
The dramatic increases in the cost
of PFI schemes from original plan to final deal.
The high margins and projected profits
of PFI contractors.
Reductions in staffing levels.
Reductions in bed numbers.
The stripping of NHS land assets.
The dramatic increase in throughput
per acute bed at PFI hospitalsthis means that the NHS will
be required to pay for further community health services and "intermediate"
beds to offset the effects of profitable PFI hospital schemes.
The bias towards the PFI option when
making judgments about value for money against the Public Sector
Comparator. It should be noted in this context that both the IPPR
and the Office of Health Economics (The Economics of the Private
Finance Initiative in the NHS April 2001) have recommended the
reduction of the 6 per cent discount given to the private sector
option in assessing value for money.
The GMB's experience of private sector involvement
in public services has been one of profits being made as a result
of cuts in staff terms and conditions rather than on the basis
of efficiency and improved service quality. We agree with the
Prime Minister Tony Blair's recent statement to the Guardian
newspaper that "I don't believe that that is the way to provide
a better service, to reduce the terms and conditions of the staff.
And I just think that's obvious".
The GMB has serious concerns that private sector
operators will achieve their profit margins by cutting staff terms
and conditions. It was on this basis that we welcomed the announcement
of the three pilot PFI "retention of employment model"
schemes at Stoke Mandeville, Roehampton and Havering. In these
schemes staff would retain their status as NHS employees despite
being under the operational management of a PFI contractor. We
are concerned that progress on these schemes seems to have stalled
and it seems that the private sector contractors are unwilling
to give up direct control of staff terms and conditions. This
only increases our anxiety that cuts in staff terms and conditions
are seen as the route to high profits by the private sector contractors
involved in PFI schemes.
The GMB has welcomed the Agenda for Change initiatives
as part of the NHS plan and support the government's attempts
to create a well trained, well motivated workforce for the National
Health Service. It would be a tragic waste for this work to be
undermined by the Private Finance initiative, and leave us back
at square one with little prospect for major service improvements
in the Health Service.
The GMB's experience of private sector involvement
in the provision of services within the NHS has not been a happy
one. The use of private contractors to provide cleaning services
is an example of how the introduction of the profit motive can
lead to a serious deterioration of quality standards. Four out
of the five trusts which run the 10 hospitals "named and
shamed" as the dirtiest in the NHS used private contractors
for their cleaning. The inflexibility of contract specifications,
combined with blurred lines of accountability and management means
that Trusts which use private contractors find it harder to deliver
service improvement targets than those which directly employ their
Private contractors who provide support services
in the NHS generally pay at or close to the minimum wage and offer
inferior pension schemes. These reductions in terms and conditions
have disproportionately affected female and part time workers
in the NHS. It has also created a two tier workforce where NHS
employees who have transferred to a contractor under TUPE work
side by side with employees who are on considerably worse conditions
because they are not former NHS employees. An example of this
is Trident Contract Services whose own employees enjoy substantially
less annual leave than former NHS employees (as much as 15 days
a year in some cases) and who offer an inferior money purchase
pension scheme rather than the NHS final salary scheme. The employer
contributions to the NHS pension scheme are six times higher than
those in the Trident scheme. This scenario is repeated across
many areas of the NHS. The GMB fears that further expansion of
the use of the private sector will mean demoralisation of staff
and lower standards.
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