Evidence submitted by the Public and Commercial
Services Union (WP 14)
INTRODUCTION
1. The Public and Commercial Services union
(PCS) is the largest civil service trade union with a membership
of over 325,000 working in the civil service and related areas.
PCS is the largest union in the Department of Health with around
2,000 members involved in preventative, strategic or support delivery
functions.
2. PCS welcomes the select committee's inquiry,
and is happy to supplement this written submission with oral evidence
or further written evidence.
3. This memorandum addresses in particular
the workforce needs involved in planning for the Health Service
and those administrative, policy, education and strategic functions
that are provided by the Department of Health.
WORKFORCE NEEDS
AND PLANNING
FOR THE
HEALTH SERVICE
4. As a result of the diversion of resources
to the delivery arm of the health sector changes have been introduced
which undermine any policy or planning to effect better services.
5. The importance given to front line services
at the expense of the Health Service administration has upset
this essential relationship and will ultimately affect service
delivery.
6. The Departmental Change Programme (DCP)
and the Arms Length Body (ALB) Review have lead to job cuts and
relocations which have created havoc in the service. There has
been little management of the changes and the continual restructuring
without any prioritisation of work or management of workloads
has led to morale problems amongst the staff.
MANAGEMENT OF
CHANGE
7. The Department Change Programme cut a
third of posts in the department without a decrease in workload.
As a result of this staff currently face unmanageable workloads
and are often in positions without job descriptions or clear aims
and objectives. Many long term experienced staff have taken redundancy
and skills gaps are evident, however there is no money for skills
training and development.
8. The diversity of the department has suffered
as a result of the drastic cuts which required a level of mobility
and flexibility on the part of staff within a very short time
frame that was inconsistent with caring responsibilities or secondary
breadwinner status. No proper equality proofing has been done
of the changes.
UTILISATION OF
RESOURCES
9. The change programme has resulted in
significant redundancy costs to the department in order to meet
an arbitary job cuts figure.
10. The change programme has resulted in
significant redundancy costs in order to achieve a figure that
was totally arbitrary. The failure to plan for maintaining the
same workload with a third less staff has resulted in significant
expenditure on consultants and agency workers. They are being
paid more than permanent staff in the department which, added
to agency fees and the extra training and support resource required
to get them up to speed, means the department is paying out more
money to maintain its services. It would appear that delivering
the required reduction in permanent staff numbers is all that
mattered.
11. This additional expenditure is easily
disguised by the department's inadequate records of who works
for them. When Minister Jane Kennedy was asked in Parliament on
20 December 2005 how many agency staff, contractors and consultants
were currently employed within the department she replied that
this information was not collected centrally and could only be
obtained at disproportionate cost. However, PCS are aware that
one division, the Health Improvement Directorate, is spending
almost £7 million a year on contractors. Another section
has 180 civil servants and 170 consultants. The internal staff
directory lists 1,200 contractors out of the staff in post figure
of 2,245.
12. The ALB Review saw organisational changes
which essentially transferred many of the department's functions
to agencies, NDPBs and the private sector. These changes have
involved service disruption, additional costs in the creation
of new agencies and in many cases has resulted in the department
underwriting ongoing staffing and change cost to the new organisation.
Again, it seems that as staff do not appear in the department's
accounts the real costs of change do not have to be quantified.
13. In many cases the formation of new agencies
has become a financial black hole. The Business Services Authority
(BSA) is an authority set up purely to procure and manage outsourcing.
It has, because of undue haste and poor advice become a very expensive
parking bay for five agencies that are earmarked for privatisation.
Whilst all five agencies will go through a double transfer, different
arrangements apply for each. Some go through market evaluation,
some though an OJEC process and others no process at all, they
are just handed to a current contractor. The Authority will have
a CEO and six Executive Directors plus six Non-Executive Directors,
all to manage five contracts. The only clear savings that can
be seen in any of the agencies are those to be delivered through
technological change in the Prescriptions Pricing Authority. It
is likely that significant costs will be incurred in changes to
the other agencies in the privatisation process and will be hidden
in BSA overall costs. It is unclear how this diverts resources
to the frontline.
14. The proposal to outsource is not accompanied
by any analysis of costs and benefits, service standards or impact
on efficiency. In its current form it is hard to see how the decision
was taken given there is no evidence to indicate that it will
achieve efficiencies, maintain service standards, or result in
the closer working between health and social care and greater
stakeholder involvement. The PCS have been asking for a business
case since the announcement of the decision to outsource these
areas. It is apparently still being worked on.
PRIVATISATION
15. In the case of the NHS Pensions Agency,
part of the BSA process, a current contractor will be awarded
the contract for services on the basis of an option in an existing
contract. There will be no competitive tendering but rather a
monopoly situation for services that were not previously scoped
or considered under the current contract. The existing contractor,
Paymaster, will become the biggest pensions provider in Europe.
This will create a situation which is not conducive to good service
provision or price control. The contract is a no risk contract
because BSA have now underwritten all the costs of change including
redundancies. This is a paper exercise giving the illusion of
achieving efficiencies and savings but in fact hiding the real
costs in a separate entity.
16. Even if the contract was opened up to
competition any alternative competitors would be at a distinct
disadvantage as discussions have been progressing with Paymaster
and information provided to them since October last year. The
implication is that there is no process for awarding lucrative
contracts to, or spending taxpayers money on, the private sector.
17. The Price Waterhouse Cooper report of
15 September 2005 identifies the proposal to contract out the
administration of the pensions scheme as "challenging and
poses a degree of business continuity risk". The report states
that achieving efficiencies are dependent on the restructuring
of the current contract, an acknowledgement that the current contract
presents a barrier and also that it has not delivered the efficiencies
envisaged. It also states that there is still considerable planning
and structuring to be carried out before the private sector can
be engaged in the process. It envisaged an OJEU open tender process
in April 2006 and commercial close by 2007. The unions have been
denied access to the Taylor Report of May 2005 which preceded
this.
18. The union has had no involvement, and
until recently, had no knowledge of either report. The process,
or lack of, clearly leaves the path wide open for legal challenges,
creating significant further cost risks.
How Should Planning be Undertaken?
19. Planning should be undertaken in consultation
with the stakeholders, including the unions in accordance with
statutory obligations. Planning should be long term and informed
and proposals analysed in terms of progress towards specified
goals. Those delivering health care services have enough to do
without having to do their own administration, support and planning.
They should be free to focus on delivering the services for which
they have the skills whilst others get on with creating the environment
in which they can deliver services most efficiently and effectively.
Public and Commercial Services Union
March 2006
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