Unison has attacked proposals for a radical development of the private finance initiative drawn up by a working group for centre-left think-tank the Institute for Public Policy Research.

The union has responded angrily to recommendations by a group led by London School of Economics chair Professor Julian le Grand on public-private partnerships in the health service.

It will be put to an IPPR commission examining the role of private and voluntary groups in the public sector. The paper follows the trend of recent thinking on PPPs by suggesting that schemes should be commissioned by health authorities or NHS regional offices, rather that individual trusts. It also follows the thinking of IPPR research published earlier this year suggesting that private sector contractors working with the NHS should be encouraged to deliver on wider health outcomes.

It says PPPs should be seen as contracting for a specific outcome and an appropriate package of services should be included in schemes to deliver this - including core clinical services. But it then goes on to suggest that the best way to evaluate the potential for reconfigured hospital services would be through a hospital PFI that included management and clinical services.

The paper says a pilot project should be set up where a health authority that had identified a need for a new hospital was allowed to ask bidders to suggest ways in which payment would be linked to outcomes, and then contract with a pilot provider or existing trusts.

It also suggests that private contractors should be allowed to take over GP services and that specialist health companies should be set up to deliver 'rescue' services to 'red light' trusts.

Unison national secretary for health Paul Marks said the pilot idea would be a 'dangerous experiment'. 'There is increasing evidence that PFI is a costly failure and there is no need to include staff in schemes, 'he said.

The IPPR stressed last week that the commission would not report until next May, and had only just started sifting project papers from the working groups.

Commission secretary Gavin Kelly said it was wrong to suggest it had endorsed any particular position.

Professor le Grand said the working groups had been asked to 'think the unthinkable' and examine the 'continuum' from purely public services to purely private ones.

He was surprised Unison had reacted so strongly. 'It seems to me it would have been unhelpful for us not to consider ideas like this and I am sure the commission will look at them very seriously, 'he said.