research-report-96-coming-clean-contractual-and-procurement-practices.doc

Staff transfer proved controversial in light of

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Staff transfer proved controversial in light of evidence of ‘two tiers’ of pay and employment conditions among transferred staff and other workers recruited by the private sector services firms. Long-running union campaigns during the 1990s and early 2000s eventually led the past New Labour government to introduce a Two Tier Code that enabled local partners to collectively negotiate conditions for all privately employed ancillary workers that essentially extended the NHS terms and conditions, known as Agenda for Change 13 (Grimshaw and Carroll, 2008). The Code was formally abolished by the coalition government in late 2010 but it lives on in the NHS since it has been agreed with contractors as part of PFI agreements. Thanks to favourable industrial relations institutions, therefore, many contracts for outsourced cleaning services in the NHS provide for relatively decent terms and conditions, covering basic pay, unsocial and overtime hours pay premiums, sickness benefits and annual leave, among others. Case study hospital HospitalE is a large teaching NHS Trust, which outsourced its cleaning services, along with catering and estates maintenance services, as part of a large and complex PFI signed in 1998 and operational from 2001. CleanC is a multinational firm that started out as a catering firm specialising in winning public contracts, for example in schools and hospitals. Through acquisitions of other firms and growth in the outsourcing market it expanded quickly in the last two decades and today employs more than 400,000 employees in 80 countries. It earned a revenue of 13 ‘Agenda for Change and NHS Contractors Staff – a Joint Statement’ issued in October 2005; for further details see Grimshaw (2009). 60
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HOSPITALE AND CLEANC around £15 billion in 2013 and offers a range of services – corporate, cleaning, catering, portering, estates maintenance, prison security and social care. It continues to expand its service offerings, extending most recently to property management services since 2011. Its total UK workforce is 35,000. Within the UK healthcare sector (public and private) it manages around 5,000 employees. In 2011 it signed a National Framework Agreement with the UK’s three main unions, Unite, Unison and GMB. 9.2 Procurement Reasons for outsourcing Cleaning services were outsourced because this was required under the rules of the PFI agreement, which in turn was the only means of raising capital for the needed building construction at the HospitalE site. As is typical of other PFI contracts, the original PFI contract involved a consortium of four private sector firms: a construction firm built the new hospital buildings (with around 400 patient beds); CleanC provided cleaning, catering, laundry and call centre services (so-called ‘soft’ facilities management); a building services firm delivered estates maintenance (‘hard’ services); and another firm provided design services. Some 500 ancillary staff were transferred from HospitalE to CleanC and the building services firm. A small unit of
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