Feature

Losers in the transfer market

John Lister explains why the GMB is opposed to the government’s retention of employment policy for NHS staff affected by PFI deals

Many of the arguments against the government’s policy of using private sector cash to finance NHS facilities – the so-called Private Finance Initiative (PFI) – have focused on the cost of borrowing money and purchasing services from the private sector. But another important line of argument against PFI is the impact the deals have on NHS staff.

Under the earliest PFI schemes, staff working in non-clinical support services – notably cleaning, catering, laundry, portering and security – were effectively sold off to the private sector consortium as part of the deal. Non-clinical services were regarded both by the companies and the government as a legitimate additional source of long-term profit, and staff were transferred to the private service provider.

While their immediate terms and conditions were protected under the Transfer of Undertakings (TUPE) legislation, staff forced to switch to a private sector employer lost their entitlement to the NHS pension scheme and its benefits.

The TUPE protection only covered staff transferring, not new staff employed by the contractors, leading to a two-tier pay structure. Many private contractors routinely offer their staff little or no sickness benefit above the statutory minimum, inferior rates for working overtime, weekend and bank holiday shifts, and fewer holidays than their counterparts in the NHS.

In an effort to defuse opposition to PFI, ministers at first promised that no clinical staff (nurses, doctors and other professional grades) would be transferred to private sector employers as a result of PFI schemes. In fact, no major PFI deals had even suggested privatising these services.

This bogus concession failed to persuade any of the health unions to accept PFI. But in the aftermath of a protracted series of all-out stoppages by hospital support staff organised by Unison members in Dudley Hospitals NHS Trust, ministers changed tack.

Health secretary Alan Milburn announced that in future PFI deals the government would explore the possibility of retaining most ancillary and other non-clinical staff as NHS employees – with full pension and other rights intact – although they would be managed by the private sector service provider. But existing PFI deals (such as that at Dudley) would not be reopened.

The ‘retention of employment’ policy that emerged from negotiations is seen by health ministers, including John Hutton, as a way of smoothing the path for further PFI schemes. Ministers argue that the policy would retain 85 per cent of all non-clinical staff in NHS employment, with only people on management grades being obliged to transfer to the private sector.

However a closer analysis suggests that even if this were true, more than 5,000 staff out of about 35,000 ancillary, administrative and clerical and works staff could be excluded from the scheme in the 45 PFI schemes awaiting approval.

The GMB’s objections to the retention of employment policy focus on the range of non-clinical staff who are not protected, because they fall outside the five designated ‘trades’ covered by the proposal: portering, cleaning, catering, laundry and security staff.

Explicitly excluded from the policy are:

• Estates maintenance (‘works’) staff;
• Managers, supervisors and charge hands working in the five ‘trades;
• Important non-clinical staff, most notably administrative and clerical staff, working in services that may be included in PFI schemes, such as reception staff, IT staff, and telephonists;
• Records staff working on computerised systems in the new hospitals;
• Other staff such as ward clerks, who do non-clinical jobs in clinical settings;
• Staff working in patient and other transport services;
• Gardening staff;
• Maintenance staff working on non-clinical equipment.

Staff in these categories who object to being transferred to a private sector employer will be deemed to be resigning from the NHS, and will not be offered revised contracts.

Much has been made of the fact that the policy calls for staff in the ‘five trades’ who are currently employed by a private contractor to be brought back in to NHS employment. However there is a major exception to this: the retention of employment policy will not normally apply where a trust has previously privatised services so thoroughly that it no longer has an in-house capability.

Management responsibility for these NHS staff is transferred to the private sector not just in name, but also in reality. The private company will take the final decision on who is and who is not a manager; decide how many of the existing NHS staff they require; manage the redundancy of staff whose jobs are wiped out by the PFI deal; and take over the implementation of the trust’s grievance and other procedures for the NHS staff under their supervision.

As managers of the service, the private sector will also be able to demand that staff employed and paid by the NHS work harder (or longer hours) to protect the profits of their shareholders. And they will have the right to employ temporary staff (on the company’s own terms and conditions) to cover sickness or staff shortages.

The GMB calculates that the exclusions and loopholes in the retention of employment policy could mean that up to 2,000 out of the 13,500 NHS ancillary staff affected by the pending PFI deals would be regarded as ‘managers’, while more than 2,000 works staff would also be excluded.

It is less clear how many of the 20,000 administrative and clerical staff in the 45 trusts might also be faced with privatisation: even if this only affected 15 per cent of them, it would affect more than 3,000 staff.

Perhaps the most contentious element in the proposals is the potential for a layer of ‘second-class citizens’ to be created within the ancillary and support services – workers doing the same work, but with fewer rights and inferior terms and conditions.

The GMB opposed the policy because it leaves far too many powers in the hands of private employers, and because the union wants all NHS non-clinical staff to be protected.

Nobody has demonstrated any advantages for patients or staff in allowing NHS employees to be managed by the private sector. The health unions agree that the best way to unify a health care team and guarantee quality care would be for all support services to be provided and managed in-house.

But with a government wedded to PFI as the means of building a new infrastructure for the NHS, and with private firms eager to profit from providing services as well as leasing the new buildings, it seems that ministers’ best offer is a poor compromise, which leaves thousands of low-paid NHS staff in limbo.