Trust too ‘compassionate’ to effectively run services in-house

The argument is set out in an outline business case prepared by East Suffolk and North Essex Foundation Trust, which has been obtained by HSJ.

The business case, which also states that NHS employment terms “can encourage poor behaviours” in FM staff, recommends fully outsourcing nearly £40m worth of FM services across the trust’s two hospitals.

The trust currently runs the FM function at Colchester Hospital in-house, but the service is outsourced to OCS at its other site, Ipswich Hospital, under a contract which runs until April 2025.

The trust’s decision to consider outsourcing the services, which includes cleaning, portering and catering, sparked a furious response from unions, and staff are set to strike all next week.

A final decision on the services would only be made in November when a full business case would be presented to the trust’s board, the trust told HSJ.

The outline business case claims fully outsourcing FM would deliver significant savings. It says “within the 5 year projection” the service’s annual bill could be cut by “the equivalent of 8.5 per cent for the outsourced delivered model”.

The document also includes a table, entitled “insourcing of services - cons” (see table, left, zoom to read).

This says that in-housed services have an “it’s OK now we work for the NHS” attitude, which means the “consistency and applicability of services” is “less of a focus” than it would be if the function was outsourced.

It adds that NHS terms of employment “can encourage poor behaviours ie sickness/absence” and that the trust’s “compassionate environment” meant it was “easy to overlook service performance requirements”.

The business case continues that the trust’s own “internal management frameworks [were] not as rigorous as needed to enforce standards of performance”.

The document, entitled Facilities Management – Future Delivery Model, Outline Business Case, sets out three options.

These include a “hybrid model” involving the outsourcing of some services, which would cost £39.18m per year. A fully insourced model is costed at £40.45m per year and a fully outsourced one at £35.4m.

The document adds: “The appraisal clearly indicates that an outsourced service model, with a commitment to a set level of investment to enable defined performance improvement targets, will enable the estimated 5yr cost of the FM Service Delivery for ESNEFT to be £5m lower than for the current cost of service and £12m lower than would be achievable through an insourced service model.”

The trust told HSJ it “highly values” all its FM colleagues and that while “any model needs to be affordable, the decision was not based on cost”. It added in a statement: “This decision to test the market, is not in any way a reflection of their [FM staff] contribution.”

Unison said the process “has been full of flaws and unions have been deliberately shut out” and claimed the trust’s figures “did not stack up”.

The union’s eastern head of health Caroline Hennessy said: “Any savings appear to be based on eroding the conditions of staff which will hit morale and could cause experienced staff to quit for better-paid work elsewhere.”

“Creating a two-tier workforce so some staff are employed on worse terms than their colleagues at the same hospital flies in the face of the new government’s efforts to strengthen workers’ rights.”