The collapse of Carillion shows the risk to workers and service users from outsourcing, public service union UNISON has today told NHS bosses.
The union is now calling for plans drawn up by South West health trusts to outsource thousands of staff into “subsidiary companies” (subcos) to be paused and reviewed in light of the Carillion fiasco.
The company’s liquidation has shed light on the low margins and risk to the taxpayer from contracting outside the public sector. NHS subcos would see estates and facilities staff transferred out of the health service and into separate companies. The Trust would then contract these to provide services.
Carillion’s pursuit of contracts for similar low-margin cleaning and catering services across the public sector left it liquidated with £900 million of debt and an £800 million pensions black hole. NHS bosses hope subcos will save money allowing them to reduce the contract prices paid for services.
UNISON South West head of health Helen Eccles said:
“The curtain has been pulled back on private companies running public services and it’s not a pretty sight. Yet for some reason senior NHS leaders want to join this circus. After Carillion’s collapse they ought to know better than to trust promises that outsourced public services will deliver magical gains.
“At the end of the day it’s ordinary people left in limbo. They don’t know if their job, invoice or service will be there in the morning. Transferring thousands of NHS staff into separate companies is the wrong plan. NHS bosses won’t be able to resist cutting the contract prices meaning worse services, worse jobs, and the risk that the whole thing will collapse.
“Siren calls from existing NHS subcos that outsourced companies will be able to bring in new revenue will lead nowhere. There is little profit to be made in running public services properly, as Carillion’s staff and suppliers are finding out. These NHS subco plans must be paused and reviewed now Trusts can no longer ignore the failure of public service outsourcing”
There are four active subco proposals in the South West so far.
- Yeovil District Hospital plans to transfer 360 staff into one on 1 February
- Gloucestershire Hospitals Trust is consulting on transferring 750 staff
- Royal United Hospitals Bath has begun planning for a subco for 500 staff
- North Bristol Trust has raised its interest in a subco for up to 2000 staff.