Select Committee on Health Minutes of Evidence

Memorandum by UNISON (PS 33)


  Introduction and recommendations

  1.  PFI in the NHS the only game in town

  2.  Refinancing

  3.  Affordability and value for money

  4.  Service Failures

  5.  Bed Numbers

  6.  Staff and PFI schemes

  7.  PFI pilots retention of employment model

  8.  Public Private Partnerships

  9.  The NHS Concordat

  10.  Private Sector Management

  11.  Private Sector involvement in Pathology

  12.  References


  UNISON, the Health and Social Care Union, welcomes the opportunity to contribute to the work of the House of Commons Health Select Committee.

  UNISON is the largest Health Care Union and the leading Union in most PFI schemes in the NHS. UNISON has opposed the use of the Private Finance Initiative in the NHS since it was originally proposed in 1996. UNISON gave evidence to the previous inquiries by the Health Care Select Committee and believes that our fears about the impact of PFI on the NHS have been realised. The experience of NHS schemes in the PFI supports our criticism. UNISON continues to believe that the Private Finance Initiative is not an appropriate mechanism for the modernisation of NHS and is having a destructive effect on services and staff, which are documented in our evidence.

  UNISON welcomes the changes to planning for bed numbers in PFI schemes but remains concerned that PFI is still leading to significant reduction in bed numbers in some schemes. We call for a further review of these changes.

  UNISON is involved in negotiations with the Department of Health over the proposal for PFI schemes under which ancillary staff would not transfer to the Private Sector. UNISON hopes these will be successful in the pilot sites identified (Stoke Mandeville, Havering and Queen Mary—Roehampton) and then extended to all future PFI schemes. Progress in this area would reduce the direct impact on staff though not resolve our other objections to PFI.

  UNISON is concerned that the Government has begun to extend the "Public Private Partnerships" into new areas especially in Intermediate and Primary Care despite the difficulties that have been experienced in the hospital sector.

  UNISON welcomes the previous work of the committee in reviewing PFI and hopes that this inquiry into private sector will address the growing concern over the role of the private sector in the NHS.


  UNISON believes the select committee should support the following measures:

    —  a moratorium on use of the Private Finance Initiative in the NHS and an independent review of all existing projects and of the operation of the public sector comparator;

    —  the Department of Health should make available sufficient public capital funding to fund the 29 planned new developments announced in the National Plan for the NHS;

    —  the Department should exclude services and staff from any proposed PFI schemes;

    —  the "Retention of Employment model" should be applied for all NHS support staff if the government continues to implement PFI projects including services; and

    —  limit Public Private Partnerships to non-service related areas the provision of equipment and use of private sector facilities only where no NHS facilities are available. Public Private Partnerships should not result in transfer of NHS staff.


  1.1  UNISON believes that the Government has not shown that PFI is a value for money option for the NHS. The Government argues that PFI projects are not approved unless they pass a value for money test. UNISON has serious concerns that the way this test is conducted does not allow for a genuine comparison to be made with a public sector alternative. UNISON believes that PFI decisions are largely based on a belief that funding will not be available unless the PFI option is chosen.

  1.2  The first reason for this is that NHS capital planning decisions have already allocated expenditure between public capital funding and PFI funding. As a result it is predetermined that most new hospitals will have to be built via PFI, as there is insufficient public funding available to support the scale of investment the Government is making. A recent analysis by the Institute of Public Policy Research showed however, that the Government could finance most of its current hospital building programme from within existing public sector resources (IPPR 2001).

  1.3  85 per cent of new hospitals since 1997 have been built under PFI. NHS managers are well aware that there is a shortage of traditional capital funding and therefore support PFI as the only means of securing new facilities.

  1.4  Government planning also tends to presume that a PFI route should be followed. For example, the NHS Plan published in February 2002 suggested almost all of the next wave of hospital developments would be PFI funded before any evaluation.

  1.5  The main mechanism by which a Trust is meant to decide if it wishes to go down the PFI route is through the use of the Public Sector comparator. There are many problems with the way the PSC is constructed (Gaffney et al 1999). By the nature the PSC cannot compare actual costs of the PFI and non-PFI alternatives. It has to compare existing costs adjusted by assumptions about efficiency and transfer of risk with the PFI option based on forecasts of efficiency savings.

  1.6  Even with this bias, the most comprehensive review of the evidence of costs of PFI and PSC in the first wave NHS PFI Scheme in England has shown that the comparison was only very narrowly in favour of the PFI option. [Boyle and Harrison cited in Institute of Public Policy Research 2001, p 92.]

  1.7  One of the key factors influencing this is the assumption about the net present value of schemes and the discount rate used for comparison. This is a highly technical debate but a recent review has concluded that "Net benefits of NHS PFI schemes relative to their Public Sector Comparators seem small. The estimated net benefit would disappear if the real annual discount rate used to calculate the net present value costs were reduced from the 6 per cent to a more appropriate risk free level of 4 per cent. The current discount rate is too high given that risk transfer is estimated separately (Sussex Office of Health Economics 2001, p 2).

  1.8  As well as the discount rate assumptions are also made about the risk transferred to the Private Sector by the PFI. Assumptions about risk transfer are highly subjective and in many cases it is extremely unclear how they have been arrived at. In the first wave schemes they vary between 20 and 76 per cent (subsequent Department of Health guidance may lead to narrowing of this range). In several cases eg Durham reference periods were adjusted apparently so that comparison showed equivalence in the options. UNISON continues to be concerned by this evaluation. [UNISON 1999]

  1.9  The only NHS scheme in which an independent and thorough evaluation of these issues has taken place is of the Dartford and Gravesham project (NAO 1999). This showed it had massively over estimated the savings from the PFI route. UNISON believes all PFI projects should be subject to such a review. UNISON believes that the National Audit Office should carry out further evaluation of other NHS schemes. This should be made public as should the results of any other evaluative research being undertaken, eg by the Audit Commission.

  1.10  PFI is justified by reference to the risk transfer that is achieved in other sectors. The evidence for genuine transfer of risk is contentious. In the main cases where PFI schemes have resulted in serious problems it appears that risks have been transferred back to the public sector eg in the National Insurance PFI project. [Pollock et al 2001]

  1.11  UNISON believes that in practice the real risk transfer achieved through PFI will not be as great as is claimed. Until the testing of PFI schemes is reformed so as to provide a fairer comparison and public funding to a degree that allows genuine choice on the value for money of PFI will continue to be called into question.

  1.12  UNISON is concerned that PFI locks NHS commissions into long-term relationships with consortia. The payment stream to the Private Sector Consortia is effectively ring-fenced, as it cannot contractually be changed by the NHS without incurring penalties. If a commissioner is under financial pressure therefore it must look to its non-PFI areas of expenditure for all of the savings. This appears to have happened already in some schemes and is a major potential problem.

  1.13  PFI charges are defended as being comparable to the payment stream that would need to be set aside to provide for maintenance and repayment of capital charges in a conventional scheme but is a much greater constraint due to its contractual nature. It also appears that it consumes a greater proportion of overall expenditure than traditional capital spending and provides above average profits for Private Sector consortia.


  2.1  UNISON is concerned by the phenomenon of refinancing of PFI schemes. UNISON believes that refinancing is a hidden subsidy to the Private Sector. The possibility of refinancing arises from the fact that the initial loans may have been lent at higher rates of interest than can be secured later. In essence refinancing allows the consortia to re-mortgage the scheme at a lower interest rate.

  2.2  The view of the Public Accounts Committee is that most refinancing gains should not accrue to the Private Sector and in the NHS current guidance recommends a 70:30 split. UNISON believes this is still far too generous to the consortia. Even this element of "clawback" does not apply to the first wave schemes agreed before it was issued. No NHS schemes have been refinanced as far as UNISON is aware but there are persistent rumours of such refinancing being arranged in Norfolk and Norwich.

  2.3  Refinancing has been defended as allowing consortia to be rewarded for efficiency in delivering the project on time. The consortia already receive payment for this. Nor should the consortia gain excessively from interest rate charges, it is sometimes argued that refinancing is a necessary reward for Private Sector success. This is however paid for in the payment process and should not be rewarded twice.


  3.1  The proponents of PFI argued that it would deliver new facilities on time to higher standard traditional public procurement. It is also argued that the Private Sector has greater expertise in running support services and will deliver higher quality services to assist in improving clinical care. These gains are said to offset the admitted higher cost of borrowing from the Private Sector delivering a value for money solution. The experience of the PFI hospitals in the NHS does not bear out these claims. [IPPR 2001]

  3.2  UNISON accepts that as far as is publicly known there have not been significant costs overruns occurring in the traditional sense in PFI schemes. This is because the cost increases in PFI schemes occur prior to the contract being signed. In a sense cost overruns are budgeted for in advance. In many cases the cost of a PFI project has substantially escalated between original and final schemes. In some cases this has led to affordability crisis where commissioners find they have to revise their original proposals and or find additional funds from other healthcare budgets to afford the PFI scheme. The most recent example of this is in Central Manchester where recently publicised documents show that the project may no longer be affordable in its original form. In addition a range of forms of hidden subsidy have been offered to offset cost problem in PFI schemes (known as smoothing mechanisms) and this needs to be acknowledged when comparisons are being made.

  3.3  UNISON would also point out that the Department of Health accepted that its assumption about overruns on traditional procurement were out of date and we understand that the small number of publicly funded projects commissioned since 1997 have not led to major time or cost overruns. If public investment were made available to the same degree as PFI using the procurement experience gained UNISON believes it could deliver the new facilities the NHS needs without the dangers inherent in PFI.


  4.1  It is in the area of service delivery that some of the most serious questions need to be asked about whether PFI has delivered. The number of completed projects is not high but serious well-documented problems have emerged in a significant proportion of completed schemes. UNISON welcomes any new facilities and does not argue that they have not resulted in any improvements. We do however, believe that they have not produced significantly better facilities than public sector investment would have done and in some cases have experienced significant operational problems.


  4.2  The problems with the Carlisle Infirmary have been regularly covered in the local press since it opened. They first received national press coverage in 2001 (Observer 8 July 2001). The Department of Health has issued a rebuttal to these reports and UNISON comments on this below. Our members report serious and continuing problems at the hospital. Problems fall into three main areas—design issues, maintenance/equipment and bed numbers.

  4.3  Design Issues: the integration of design and delivery is said to be one of the main benefits of PFI. In Carlisle one of the main features is an atrium style entrance. This design lacks natural ventilation and it is accepted led to unacceptable temperatures in the summer of 2000 and 2001. This was resolved by the provision of blinds, but this did not occur until October 2001. There was also a problem of high temperatures on the wards in the summer and inadequate air conditioning.

  4.4  UNISON continues to believe that the design of the wards led to too little space between the beds and understands that trolleys had to be redesigned to deal with this. The Department of Health accepts this but denies that trolleys had to be redesigned to cope. UNISON understands that trolleys were redesigned. Design problems are not unique to PFI hospitals but PFI was claimed to ensure they would be avoided.

  4.5  UNISON remains concerned over the lack of proper storage space for X-ray records and has a health and safety report about our concerns. There is also a clinical impact in that there are serious delays to the second stage reporting which is a key part of the checking of diagnosis.

  4.6  Service Failures: there have been several serious equipment failures including incidents of flooding, generator failures and equipment breakdowns.

  4.7  The Department of Health admits these incidents but disputes their seriousness. UNISON members reported that they are serious and believes there were risks to staff and potentially patients. There was a major power failure leaving the hospital without any power for 13 minutes. As a result nursing staff had to manually intervene to maintain services, one patient was trapped and other patients were in darkness. The Health and Safety report into the generator failure would verify the serious nature of the incident. The flooding incident on 2 June was in our members view very serious and did represent a risk. There were incidents with autoclave supply for sterile services though these are not part of the PFI and we would question the decision to make experienced technicians redundant. We would also point out that the West Cumbria Healthcare Trust CSSD department which was used to provide backup supplies is due to close.

  4.8  Bed Numbers: The number of beds in the Carlisle scheme has always been of concern to UNISON. The revised bed figures recently produced by the Department of Health show a much smaller reduction than previously planned but numbers are still inadequate. UNISON continues to be concerned about long trolley waits and notes that the Trust did not meet the "star rating" target for cancellation of operations. The plans to build a private sector unit to address the gap show that there is a problem though UNISON rejects this as a solution. UNISON would advocate that private-nursing homes in the area should be brought back under NHS control to secure extra capacity.

North Durham

  4.9  The other PFI hospital that has experienced serious service problems is North Durham. These have been widely reported. There are:

  4.10  Design: UNISON is concerned that there is inadequate space for several key facilities. The ambulance bay can only hold four vehicles, the sluice areas are next to the wards and the mortuary does not have a proper waiting area. The plumbing and availability of toilets and telephones have also been criticised. The Trust has made adjustments to the ambulance bays but not addressed the key issues. In addition there is an ongoing concern over the loss of natural light and ventilation. The air conditioning does not appear to have prevented extremely high temperatures causing problems for staff and patients.

  4.11  Bed numbers: UNISON has consistently argued that the number of beds provided in the new facilities is inadequate. The numbers have been revised and there is still some dispute about the number of staffed beds but it is clear that there has been a significant reduction in bed availability. According to the most recent Department of Health figures the number of beds has reduced from 544 to 476. (14 per cent)

  4.12  The current bed numbers are clearly not sufficient to meet demand. As a result there were widely reported long trolley waits during the summer. Although these have now eased there is still clearly major pressure on the Trust as is shown by the number of operations cancelled on the day. On this indicator the Trust did not meet its "star rating" target.

  4.13  The Health Authority has drawn up a report, which admits there is "insufficient capacity" and recommends that the number of beds is further increased. It proposed to do this by a partnership with Nuffield Hospitals allowing them to build a unit on the site from which the NHS would buy all the beds. UNISON is opposed to this proposal.

  4.14  The Trust Chief Executive has claimed that the inadequate number of beds is not a direct product of PFI. This may be true but UNISON believes that the affordability problems that emerged in the PFI scheme did have an impact on the planned bed numbers. It is also clear that the number of beds is inadequate to meet predictable demands rather than being insufficient simply because of changed Government targets. In any event the Trust should have been able to accommodate the changed targets.

  4.15  The Trust also claims that the PFI option has lower lifetime maintenance costs than the current building but its own figures do not appear to support this and it would be expected that a new building would have lower costs in any event. UNISON believes a public sector option would have been cheaper. In addition, UNISON continues to question the validity of the original comparison.

  4.16  Service problems: there have been a number of incidents where there have been service failures. Difficulties with the portering service reportedly led a consultant to call an ambulance at one point to move a patient. There has been at least one generator failure and a flood in the pathology department. (The Guardian 23 July 2001).

  4.17  UNISON accepts that some of these issues have been resolved and does not ascribe all of them to the effects of PFI. There does however continue to be an issue around the definition of the services provided by the contractor.

  4.18  UNISON welcomes the new facilities that have been provided for the people of Durham. This flagship PFI hospital has however experienced significant problems which are in UNISON's view linked to the use of PFI to build and run it.

  4.19  As well as the widely reported and severe problems in Carlisle and North Durham problems of a similar nature have been experienced in other PFI schemes though not to the same degree.

  Dartford and Gravesham: initial problems were reported with equipment failures and design of some facilities. Most of these have been resolved but UNISON remains concerned that the bed numbers are inadequate and the Trust underachieved on trolley waits target in the recent star rating assessment.

  Calderdale: the staff facilities are inadequate and press reports of problems with air conditioning systems. Car parking is inadequate and there have been problems with bed capacity though some new provision is now being made.

  South Buckinghamshire: UNISON understands that there were initial problems with the design of wards ie doors that were too narrow to get beds through and these had to be redesigned. There has been an incident of limited flooding eg in the renal unit and at least one minor ceiling collapse. Clinical services were not affected. Fixed price nature of the contract meant there were initial difficulties with the staffing levels in cleaning. These have now been addressed although recruitment and retention remains a problem. UNISON believes that greater involvement of front line staff could have avoided some of these issues and welcomes the current improvement programme.

  Greenwich Healthcare: Reports of flooding and problems with air conditioning as well as overall difficulties with the design creating large distances to walk for patients and staff. As in other schemes there is concern over staffing levels, the level of charges for facilities such as telephones and television.

  4.20  Most other first wave PFI schemes are not yet fully operational and so it is too early to assess the impact on services of PFI. UNISON accepts that in many cases new facilities are being provided and welcomes this. UNISON does not decry the efforts of staff and managers to provide quality services and we do not base our argument on operational problems. We draw attention to these to highlight that PFI has not been brought the scale of benefits claimed by its proponents.


  5.1  UNISON welcomes the Government decision to revise bed numbers in PFI schemes to reverse bed cuts in first wave Trusts. This followed the report of the National Beds Enquiry that concluded that existing planning models underestimated the need for NHS beds. This is a major step forward but there remain concerns about the impact of the Private Finance Initiative on bed numbers.

  5.2  UNISON remains concerned that in several first wave PFI schemes Trusts continue to have less than the number of beds needed. Detailed examination of bed numbers in North Durham and Carlisle has shown this to be the case. UNISON believes developments in North Durham and Carlisle support our view that these schemes were under bedded (UNISON 1999).

  5.3  In Carlisle the Trust has sought to increase the number of beds by proposing to enter into agreement with Nuffield Hospitals to build a Private Sector facility on the site to increase the number of beds. Durham Health Authority has also publicly acknowledged that the number of beds is insufficient and is looking at ways of increasing the number of beds available and is also pursuing a similar response. UNISON is still concerned that a number of first wave PFI schemes have been implemented even though they are based on significant bed cuts. These include Calderdale (24 per cent), Bromley (15 per cent), Swindon and Marlborough (17 per cent), Dartford and Gravesham (11 per cent) and potentially though recent changes may offset this at UCLH. UNISON believes bed numbers in these schemes are still too low. In some cases such as Worcester PFI the bed numbers in other nearby hospitals such as Kidderminster appear to have been cut to accommodate the costs of the scheme although UNISON welcomes recent announcements of extra beds for this area.

  5.4  UNISON is also concerned that in many cases beds provided by the NHS in acute hospitals have been replaced by intermediate care beds provided by the Private Sector. It is still too early to properly evaluate the consequences of this shift.


  6.1  UNISON has long been concerned about the impact of Private Finance Initiative Projects on NHS staff. PFI was originally based on directly transferring support staff in services such as cleaning, catering and portering to the Private Sector companies responsible for running services. UNISON believes that this divides the healthcare team, threatens the terms and conditions of staff and risks damaging morale and the quality of service.

  6.2  The Government has made a number of changes to rules governing staffing issues in PFI schemes, which UNISON welcomes:

    —  from 1997 the government insisted on trade union recognition in PFI schemes and issued helpful guidance to individual projects and commenced negotiation on a new framework for staff protection;

    —  in December 2000 the Department of Health issued PFI guidance which provided a framework of protection building on the Transfer of Undertaking Protection of Employment (TUPE) regulations. This provided a national minimum set of protection for transferred staff. It also guaranteed trade unions the right to interview private Sector bidders short-listed for projects;

    —  these protections have been supplemented by local agreements. This has allowed a degree of protection of transferring staff terms and conditions and gave unions a means to promote better employment practices. Some contractors responded positively to this new framework though some withdrew from the market for undeclared reasons eg Rentokil Initial;

    —  from June 2000 the Government also made clear that individual Trusts had the option of excluding ancillary services and therefore staff from their PFI project provided value for money tests were met. The Committee will be aware that UNISON supported a 10 month dispute in Dudley Group of Hospitals seeking to prevent the inclusion of staff in this scheme. This scheme was eventually signed in June 2001; and

    —  relatively few large PFI projects have been given permission to advertise schemes that did not include staff. UNISON would highlight and commend Blackburn Royal Infirmary and Newcastle Hospitals Trusts for pursuing this approach. A number of smaller schemes eg Hexham have implemented it successfully. This is sometimes known as the Design Build Finance (DBF) model of PFI and UNISON believes all Trusts should fully explore this approach.


  7.1  On 15 June the Department of Health agreed to pilot a new approach to PFI known as the "retention of employment model" under which ancillary support staff would remain NHS employees whilst a Private Sector company would be brought in to manage the services. In this model the Private Sector would "Design, Build, Finance and Manage" the services. Maintenance and related staff would continue to transfer to the Private Sector. Three schemes were selected to pilot this new approach; Havering, Queen Mary's Roehampton and Stoke Mandeville Hospitals. Detailed negotiations continue between UNISON and the Department of Health over how this new approach will work. An update can be provided by the Committee.

  7.2  UNISON whilst remaining opposed to PFI and the use of private sector management welcomes this new approach and is negotiating with the aim of securing a successful pilot which could then be applied to other PFI projects.

  7.3  UNISON also welcomes the existing protections provided for transferring staff. There have been implementation issues in some areas eg Calderdale, Greenwich and at Dartford and Gravesham. These protections moreover do not offset the divisive effect of staff transfers in breaking up the healthcare team. Transfer remains a traumatic experience for staff. The threat of transfer has led to major deterioration in industrial relations resulting in two lengthy disputes eg UCLH and Dudley. Even where terms and conditions are protected staff feel under threat from job reductions and increased workloads, which have been experienced in areas where staff have transferred. UNISON is concerned that staffing levels in some PFI schemes have been cut to inadequate levels eg we are concerned by security arrangements at Dartford and Gravesham. In other schemes eg UCLH there is extensive use of temporary staff. In a number of cases PFI Trusts eg North Durham have reduced the numbers of registered nursing staff despite national policy to increase the number of nursing staff.

  7.4  Most importantly the Government protection applies only to transferring staff. New staff taken on by the Private Sector after transfer are not covered by NHS terms and conditions but on the conditions of service offered by the private companies. These are markedly inferior to the NHS especially in the field of pensions.

  7.5  The phenomenon of the two tier workforce is therefore institutionalised under PFI undermining the rule of the NHS as a good employer and fostering inequality and demoralisation within the workforce. Market pressures will not alleviate this and collective bargaining can only do so to a limited extent because of the restrictive nature of contract prices in PFI projects. Individual contractors argue they cannot improve their terms and conditions substantially for fear they will be undercut by competitors. Currently NHS contractors unlike those in local government are precluded from joining the NHS pension scheme. In Carlisle UNISON is involved in ongoing dispute over terms for new staff and this is likely to occur elsewhere in future if this issue is not addressed.

  7.6  UNISON believes this two-tier workforce is a significant and growing problem within NHS PFI schemes. If the retention of employment model is successful it should address this issue although problems would remain in existing schemes and for maintenance staff. The only other solution is the adoption of a revised form of fair wages clause ensuring that contractors providing services must maintain prevailing terms and conditions for all staff.

  7.7  As well as the direct effect on those staff faced with transfer PFI has had an effect on clinical staff who do not transfer under PFI. (The Committee should be aware that UNISON does not accept the distinction drawn between clinical and non-clinical staff in this context). In some cases financial problems in Trusts with PFI projects are leading to proposals for job cuts on nursing staff eg in Hereford Hospital Trust.

  7.8  The transfer of staff under the PFI divides the healthcare team. Government initiatives to promote improvements in cleaning such as modern matron are made much more difficult where services are contracted out. Health and Safety becomes more difficult when there are a multiplicity of employers onsite. It also makes it more difficult to develop new approaches to job rules, which crosses the clinical/non-clinical boundary. In this way inclusion of staff in PFI impedes rather than promotes modernisation of NHS services.


  8.1  The Government is pursuing a range of Public Private Partnership Initiatives in the NHS about which UNISON has serious concerns.

  8.2  UNISON does not object in principle to any relationship between the NHS and the Private Sector. Traditional public procurement for example always utilised private sector construction companies and for some IT equipment. UNISON does not oppose the proposals under the earned autonomy initiative for NHS Trusts to sell services to the private sector or share in the marketing of NHS inventions provided there are safeguards to prevent the NHS incurring risks and clinical research programmes are not distorted. There can also be partnerships to improve to health in local areas.

  8.3  The Government has recently set out five main policy areas in which the NHS should utilise the Private Sector. There are major risks in these developments.


  9.1  The NHS has entered into a concordat with the Private Healthcare Sector to create a new framework for the use of the Private Sector. There appears to be little central monitoring of this initiative and it is therefore difficult to be definitive about its effects. Evidence from UNISON branches indicates that the Concordat has so far been largely used as a method for using spare private sector capacity to clear NHS waiting lists. If this were purely a temporary measure as is often claimed this would have some justification but the Concordat envisages a longer-term reliance on the Private Sector.

  9.2  This is likely to be more expensive than building up NHS capacity as initial pricing will have been on a loss leader basis and the Private Sector will seek to make profits from the contracts. Once the NHS withdraws from our area of care the private sector will be able to exert more leverage in the negotiations.

  9.3  Because the private sector largely relies on the NHS to train staff and there is an overall shortage of nursing staff an expanded private sector will tempt nurses away from the NHS. This will exacerbate existing staffing problems of the NHS. UNISON believes that quality of care may not be properly safeguarded under these arrangements as it is unclear how the treatment in these facilities is regulated and where lines of accountability are drawn.

  9.4  The use of the Concordat to transfer long term contracts for services also raises a question over accountability as well as whether proper value for money is being achieved. This appears to be happening in some mental health services.

  9.5  UNISON believes that the National Health Service is more effective, accountable and can ensure higher quality services because it unites commissioning and provision of healthcare services. If the NHS becomes a commissioning agency these benefits could be lost. UNISON is deeply concerned that such a fundamental change to the nature of the service may occur through the use of the Concordat without proper debate and objective evaluation.

  9.6  UNISON is also concerned that the existing guidance on intermediate care services specifically encourages use of private sector providers. Many Intermediate Care (post hospital rehabilitation services) have been successfully implemented by NHS providers working in partnership with Social Services Departments. Private Sector providers have little track record in this area and UNISON believes it is a dangerous untested experiment to encourage provision by this group. It could also create a situation where existing NHS clinical staff are transferred to the private sector in contrast to assurances about their exclusion from PFI projects.


  10.1  The Government has proposed that some of the 29 Diagnostic Treatment Centres, which were announced in the national plan, may be managed by the Private Sector.

  10.2  UNISON does not believe that the case for transferring responsibility to the Private Sector has been made. The existing centres including gone at West Middlesex Hospital are run effectively by NHS managers. There is no evidence that the Private Sector will be more effective in running these facilities than the NHS would be and it has little experience in this area except in highly specialist areas.

  10.3  There is some international evidence on Private Sector management of public facilities. A number of Australian states have transferred management responsibility for a few of their hospitals to the Private Sector. This has not produced the anticipated benefits and has resulted in problems of maintaining quality and accountability. (Pollock 2001). In some cases facilities have been returned to public control following problems.

  10.4  UNISON is concerned about reports that General Healthcare Group GHG intends to build a centre and then compete for NHS work. The Department of Health has assured UNISON that it does not intend to transfer any of the 29 fully to the Private Sector but this could happen by default if such a centre is allowed to bid for NHS work via the concordat.


  11.1  The Government has said it will seek to involve the Private Sector in pathology services though the form of this involvement has yet to be fully clarified. Existing examples of Private Sector provision of pathology services have shown that with sufficient investment in house services can be reformed and several previously privatised contracts have been brought back in house in recent years.

  11.2  UNISON is also concerned at the separate initiative to set up a privately run pathology testing service which NHS pathologists will work for in their non-working time. In our view this raises many of the same issues as Private Sector practice by NHS consultants. UNISON supports the restrictions on this proposed by the Government.

  11.3  UNISON is aware that there are other technical support areas where private sector provision is being considered such as payroll and other finance services. UNISON does not reject the idea of drawing on Private Sector expertise in providing systems but services need to remain provided by the NHS.

  11.4  UNISON welcomes the recent decision to bring a private facility back into the NHS by acquiring the Heart Hospital. There are however a range of concerns about how this purchase has been conducted and the principle of private provision within an NHS facility. In addition there are a range of staffing issues which have yet to be properly resolved to ensure equity of treatment. It is also not clear how the purchase price was arrived at and what profit level was secured by the current owners.

  11.5  UNISON is concerned about the possible effect in primary care of the Local Improvement Finance Trust. Although we welcome injections of additional funding into under-resourced areas UNISON is concerned that the involvement of private healthcare providers in primary care could distort investment, undermine accountability, blur the boundary between the NHS and the private sector. We will be monitoring this development and have been assured that it will not affect staff.


  Brown A—Filthy and chaotic the New NHS. Observer 8 July 2001.

  Gaffney D, Pollock A M, Price D, Shaoul J—PFI in the NHS. BMJ 319 116-9 1999.

  Institute of Public Policy Research Building Better Partnerships Final Report of the Commission on Public Private Partnerships IPPR London 2001.

  Laurence F "Crisis hit hospital funds PFI cares at a price" Guardian 23 July 2001.

  National Audit Office PFI contract for Dartford and Gravesham. NAO London 1999.

  Pollock A, Shaoul J and Price D "PFI in the NHS" in a response to the Institute of Public Policy Research Report on Public Private Partnerships. Catalyst Research Institute London 2001.

  Sussex J, The economics of the Private Finance Institute in the NHS. Office of Health Economics London 2001.

  UNISON Downsizing for the 21st Century—a report on the North Durham Acute Hospital PFI Scheme. 2nd Edition UNISON London 1999.

  UNISON The only game in town? A report on the Cumberland Infirmary Carlisle PFI. UNISON London 1999.

  UNISON has also been supplied with information by its branches in PFI hospitals and further materials on the Private Finance Initiative is available on the UNISON web site http://www.unison/pfi.

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