Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 260 - 279)



  260. Thank you. Mr Weeks, did you want to come in?
  (Mr Weeks) Just to comment on that issue, not to labour the point, but I would have to respond to the assertion there is no connection between price and quality, because it seems at odds with what Mr Rose said earlier, which I welcomed, which is that you should not necessarily go for the lowest bid, and I would welcome a clarification on that issue. And the question was asked about labour inputs into the contract; obviously, numbers of staff are not the only issue, but it is very difficult to assess what has happened to the numbers of staff since contracting out, because the contractors are not under any obligation to provide information to the centre on how many staff they employ. Our anecdotal information, information from our branches, is that, in general, the numbers of staff have been cut quite significantly, and at a faster rate than where the services have been held in-house. Now, obviously, where technological change is brought in there may be good justification for that and we would not want to object to that, but we are concerned by the view, that is widely held, that where services are contracted out staffing levels are consistently cut, and to levels that then make it very difficult to provide the level of service demanded.

  261. That is my experience as well. Mr McGuire, you say, in your memorandum, that "recruitment and retention of support service staff at current rates of pay and terms and conditions, particularly within a buoyant employment market such as Leeds, is a problem." Are you implying that the introduction of what you describe as "more flexible and innovative working practices" will lead to better terms and conditions for your staff?
  (Mr McGuire) I would certainly hope so, whether a form of re-engineering was carried out through private sector or internally within public sector. Personally, my aspiration for the future is a smaller number of more productive and better rewarded people, and break away from the term "ancillary", which, by definition, is subservient; and we still have an ancillary workforce, we have people paid £4.50 an hour, in a city such as Leeds, is very, very difficult to recruit. I am currently carrying 200 vacancies in Leeds, I have a sickness level of around 10 per cent. I employ 2,700 people, at any one point in time I have around 400 or 500 people off work. That is a real quality issue. Now whether we address that issue through expertise within the private sector or whether we address it within the public sector, I would certainly hope, and this is a personal aspiration, that within the current pay envelope we could create certainly more efficient support services and a better rewarded workforce.


  262. I was interested in Siobhain's first question, which was about the private sector contractor reducing inputs, and she mentioned specifically labour, to preserve profit margins, and Mr Rose you kind of refuted that. Certainly, the picture that we are getting at your end of the table is that jobs are being lost, Mr McGuire is talking about the level of pay, and I would accept Leeds is somewhat different from nine miles down the road in Wakefield, as you are well aware, but it is a key issue, clearly, the level of pay in an area like yours. Is not that a fair point, Mr Rose, and has not the involvement of the private sector driven down those wage levels and also reduced the number of jobs involved?
  (Mr Rose) If we are brought in to perform services, we agree with the client the staff we will use, we do not have an arbitrary rule that says we get the job and then we rip staff out, it is on an agreed programme with the client as to whether we need 100 staff, or 50 staff, or 85 staff. Most times, the client will believe that there are already too many staff, and that may well be to do with the rigid pay structure and grading structure within the NHS, and they will look for a more innovative way of doing it, using multi-skilling and often doing things at different times. If we reduce staff too much then we cut our own throats and we lose the job and people are dissatisfied, and that is not in our interests. Where we are looking to recruit staff locally, we are frequently paying far more than the public sector Whitley or local Trust rates because we cannot get people at that rate. And in an economy like Leeds we are certainly paying well above the bottom of the Whitley Council rates; if you come down into London we are paying well over 50 per cent more than Whitley Council rates, in order to get staff. We have tremendous problems, because there is a skills shortage in the UK, at blue-collar as well as white-collar level. We are not looking to bring in people who simply can lift up a brush and sweep a floor, they are people who have to be trained, because there is a competence in cleaning, which means I could never be a cleaner, I may be able to be a lawyer but I could never be a cleaner, because I would not know how to operate and do things properly according to the standards that are now set.

Dr Naysmith

  263. It is just a matter of training; the six months training that you give to your workforce would help.
  (Mr Rose) It is ongoing. My wife, of course, has no problem, she is quite happy that I clean, even with no competence, because it saves her doing it. But we have an ongoing training programme, we put people through NVQ 2 and NVQ3, because that is what we are concerned to do, and that is fact, because we do not wish to employ people who simply do a job and have no satisfaction and do not think we care for them. Therefore, we pay, and we will pay above the market rates to make sure we get good staff. That is all done in agreement with the client, it is not done on a unilateral basis; and, therefore, it is the Trust and the private sector who agree the way forward on that within the parameters they have set.
  (Mr Turner) Clearly, in Bradford, we do not have the problems that Leeds have, because we do not have a recruitment problem. But one of the issues for us in Bradford is that we do have local pay negotiation, so we do not pay Whitley Council rates, we actually pay more than Whitley Council rates. And one of the issues that we have found, bringing the services back in-house, is that we are starting to work with staff side representatives around harmonising terms and conditions of service, because you have got staff from contractors, if you take portering, for example, working alongside Trust staff and Trust staff getting much more favourable rates. And not only the rates, the policies and procedures that we have got are our staff get sick pay; in our experience, the staff that we have brought back did not get sick pay, so if they are off they do not get that. So we are obviously harmonising the terms and conditions, and we built that into our bid when we brought the service in-house. So our experience is very clear, that, contracted staff, their terms and conditions are less favourable than NHS staff in Bradford, where we are looking, as I say, at pay.

Sandra Gidley

  264. I wanted to come in on the staffing rates of pay, because one of the things we discovered last week was that there may be a better hourly rate than Whitley but what was a problem was the overtime rates and the Sunday rates, and this was leading to the situation where there was almost discrimination, I would say, against Whitley staff, because if you needed somebody to work overtime they were a lot more expensive, so this two-tier system was very, very much in evidence. I just wondered if you could comment on whether the whole package is paid at a higher rate or whether that discrepancy still arises?
  (Mr Rose) That would depend on the circumstances of the contract and the location of where it is; it is impossible to generalise across the country on that, because each contract is separately negotiated. Certainly, in the private sector, we do not have, in general, built in the public sector overtime rates and structure, because we have a different way of doing things, and we motivate staff in a different way and they are willing to work with us to perform services out of the normal hours they provide on the terms we agree with them.


  265. Is it a common arrangement that people do not get sick pay?
  (Mr Rose) No, it is not.

  266. It is fairly unusual?
  (Mr Rose) It is unusual. There are companies who do this, there are companies who do not give sick pay for an amount of time, particularly for part-time operators, cleaning or catering staff; but we do pay sick pay because it is in our interests to do so.

  Sandra Gidley: I would like to hear from the Trusts on this, because I actually think it is quite a critical issue, because there are a lot of claims that staff are paid better, but, when you look at the overall package, I am still trying to get to the bottom of whether it is really the case.


  267. I think Mr Turner answered that, to some extent. Mr McGuire, have you any comments on that point?
  (Mr McGuire) In terms of private sector, TUPE would normally apply, so a member of staff transferring to a contractor would take the terms and—

Sandra Gidley

  268. With respect, that was not the point. TUPE does apply, so conditions and theoretical rates of pay do continue, but, because the new staff, at the new rates, are actually cheaper to employ for overtime purposes, there is an inherent discrimination. If somebody is looking at balancing their books, they get the cheaper staff in on a Sunday, and if they have to pay them time and a half instead of double time, I have worked in other areas and seen this happen, in, say, supermarkets, where they now have to work Sunday, and I can see the same thing is now happening in the Health Service, where we have PFI contracts and differently paid staff.
  (Mr McGuire) I have no experience of that, but I am consciously trying to reduce all the time within the Trust. I would much rather improve basic rates of pay than—

  269. But you cannot avoid it, if you have however many hundred people it is you have off all the time, you have to—
  (Mr McGuire) Absolutely, it is a vicious circle, one that needs to be addressed, it is a very complex series of issues for any staff manager within the ancillary group.

  270. Are there any figures that you could give us that might help us come to a clearer picture?
  (Mr McGuire) In terms of the costs?

  271. Of costs, and how things have changed since the introduction of the PFI?
  (Mr McGuire) We have not introduced PFI.

  272. Contracting out, sorry?
  (Mr McGuire) I cannot comment on figures for contracting out, but the current overtime bill for my function is £25,000-£26,000 a week. That results from the absence levels that we carry.

Jim Dowd

  273. Just a minor point, I am sorry to interrupt you. I have tried to jot the numbers down as you gave them to us. You have got a 2,700 head count?
  (Mr McGuire) Yes, a 2,700 head count.

  274. You have 200 vacancies.
  (Mr McGuire) Around 200.

  275. And you have got 400 or 500 off at any given moment?
  (Mr McGuire) Yes.

  276. So with a 2,700 head count, on any operational day you have only got 2,000 people available?
  (Mr McGuire) Just over 2,000 people; but, historically, the NHS has always overestablished to cater for absence and vacancies.

  277. So it should not really cause you any problems then?
  (Mr McGuire) It should not; the true picture is around 200 people, probably, it is between two and four, but it is a problem, it is a quality problem.
  (Mr Weeks) Obviously, we have spent quite a bit of time on this, so I do not want to go over old ground. We would dispute some of the assertions that have been made. But I think maybe the best way of carrying it forward is if we were to share with the Committee the evidence that we have accumulated on pay rates, provided by private contractors, where we commissioned the University of East London to carry out a survey in London. Now you would expect, if what is being asserted is happening, that private contractors are paying more than the NHS, that if it was going to happen anywhere, with no disrespect to other areas of the country, it would happen in London; and the evidence was not, overall, there were some individual examples, here and there, but overall the evidence did not support the view that the private sector were paying more. The point has already been made about unsocial hours and sick pay, and, I have to point out, a reference was made to not allowing part-time staff to have sick pay; the majority of staff in these groups, particularly in cleaning, are part-time staff, so you are excluding the majority. Individual companies do differ, some are slightly better than others, but in our most recent assessment of the major companies that have corporate policies, all of them were inferior to the NHS sick pay scheme, to a greater or lesser degree, and I can share information on that. And nobody has mentioned so far, so I will, the issue of pensions. None of them, and despite some recent improvements, which we welcome, offer a pension scheme for their new staff that is remotely comparable to the NHS, and a number of them, unfortunately including some members of the BSA, who in other respects are good employers, do not offer anything. So the whole employment package needs to be looked at, not just looking at basic rates of pay.

Dr Taylor

  278. Can I just come in on pensions, because I was going to raise those. Because I understand that the TUPE regulations specifically exclude pensions, that the new employer has to provide a pension scheme which is broadly comparable. But then we come across GAD, the Government Actuary's Department, which I understand is recommending pensions considerably lower, 20 to 25 per cent below those calculated by independent actuaries; so much so that one of my constituents has written and said he has got 30 years of NHS employment, and in fact is only going to get 24 years' pension from his new private employers?
  (Mr Weeks) I think I would want to make clear that the NHS has a policy of requiring contractors to offer broadly comparable schemes for transferred staff; that policy is enforced by GAD. And, broadly speaking, UNISON would say GAD has done a good job, and we very much welcome what the NHS has done, in respect of that policy, as far as transferred staff is concerned. I am aware of the issue that you have been written to about because we have been written to about it. There is some dispute occasionally about the way GAD carries out their assessments, but I would not want the Committee to get the impression that it is about the transferred staff and the way GAD deals with the issue that our main issue is, there is an issue, and we are talking to GAD about that particular assessment they make. Our real, fundamental issue is about the new staff, who are not covered by the current provisions. So there is an issue about GAD, but I would say the real focus is the new staff. And, obviously, with the high levels of turnover that you have within these services, very quickly the new staff can become a majority of the workforce within three to five years.

  279. May I move on, Mr Chairman. If we can go back really to quality issues. What I am interested in with cleanliness is how it is actually assessed. If you look at the recent NHS Trust performance ratings, these tables showed that just over 20 out of the 170 Trusts were underachieving, none significantly underachieving, and cleanliness in this case had been scored by what were called "a patient environment team inspection". Now nobody tells us exactly the constitution of that team, were patients involved, was the inspection carried out before or after a clean, and I would just like to know how you assess quality of cleaning within Trusts?
  (Mr Turner) The key for us in Bradford is agreeing quality standards with the users, and that will be different in every area that we provide the service. There will be some core quality standards across all clinical areas, but our belief is, because we are providing that service to the users, we have a user group, and they sit down with us and they work out quality standards, and then my management team on the cleaning side evaluate that quality standard, and the sister on the ward, or the head of department, signs off to say we have met those standards that they have been party to agreeing.

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