Memorandum by UNISON (PS 33)
Introduction and recommendations
1. PFI in the NHS the only game in town
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
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 MaryRoehampton) 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;
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. PFI IN THE
NHS THE ONLY
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
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.
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
4. SERVICE FAILURES
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
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 areasdesign 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.
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
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
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. BED NUMBERS
IN PFI SCHEMES
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
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
6. STAFF AND
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
6.2 The Government has made a number of
changes to rules governing staffing issues in PFI schemes, which
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
7. PFI PILOTS
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. PUBLIC PRIVATE
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. THE NHS CONCORDAT
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. PRIVATE SECTOR
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. PRIVATE SECTOR
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
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
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 AFilthy and chaotic the New NHS.
Observer 8 July 2001.
Gaffney D, Pollock A M, Price D, Shaoul JPFI
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 Centurya
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