22 March 2002
Health minister John Hutton, speaking to an invited audience on March 18, said that he was satisfied that such a modification of the Private Finance Initiative would work, but would not go ahead unless it received union backing.
To date, support staff such as caterers and cleaners have been outsourced to private companies as part of hospital PFI schemes, leading Unison to claim that the companies were making profits by reducing pay and enforcing redundancies.
Under the initiative, staff will continue to be employed by the NHS but managed by the private sector. The minister said the government was fulfilling a manifesto promise that PFI should not mean inferior pay and conditions.
He rejected claims that private finance can only work by attacking workers' rights. 'The legal basis for the retention of employment in the NHS is sound. That is why we decided to test how it could operate at a number of pilot sites around the country,' he said.
Unison said it would decide whether to support the initiative on March 27. A spokeswoman said: 'Until then we cannot say yea or nay. Some private companies will say they will lose money because of this, but they are going to make a stack of money out of the public building programme.'
But Norman Rose, director of the Business Services Association, whose members provide ancillary services to privately financed hospitals, described the deal as 'a political fix to buy off trade union opposition'.
Hutton unveiled further changes to the PFI in health. The tendering process will be simplified with the amalgamation of the initial stages – the 'strategic business' and 'outline business cases'. Standard tender documents will be introduced, while trusts that seek 'clarification rounds' after the best and final offer stage is completed will have to reimburse bidders' costs.
The government may seek to cut the time taken for negotiations by funding bidders' costs, which would be agreed in advance.
PFmar2002
