this week

Private finance initiative pilots announced this week are a second attempt to test (rectify? ) aspects of PFI in the health service, following a ministerial intervention into the long-running strike at Dudley Group of Hospitals trust, HSJ has learned.

Earlier pilot proposals, suggested in a bid to resolve the Dudley dispute, came in an offer made by the Department of Health - apparently over the head of the trust - to Unison head of health Bob Abberley in December last year.

And the DoH has admitted that the proposals could have led to the PFI contract at Dudley being renegotiated - a situation that the trust, the NHS Executive and ministers had previously said could not be allowed.

About 600, mainly ancillary, workers had embarked on a series of strikes which finally ended last month in a bitter dispute over their transfer out of the NHS in a PFI deal.

The offer letter - seen by HSJ - from NHS head of private finance and capital Peter Coates came on Richmond House headed paper marked 'From the Minister of State'.

It proposed a pilot project to look at 'new rules in relation to the inclusion of services' in PFI schemes at Newcastle, Oxfordshire and Portsmouth and that 'this process should also be applied to the Dudley Group of Hospitals'.

The letter said that if an agreed set of rules could be developed, these would be applied to all subsequent PFI schemes.

The PFI pilots, announced this week by health secretary Alan Milburn and chief treasury secretary Andrew Smith, will test a model where staff in catering, cleaning, portering and laundry services can remain NHS employees while being managed by the private sector PFI partner.

The move comes as the government faces increasing pressure on public-private partnerships.

Trade unions have launched a fresh onslaught over Labour's relations with the private sector, led by Unison, whose annual conference takes place this week.

And influential think-tank the Institute of Public Policy Research will next week publish findings of its commission on PPP which is expected to advocate piloting to rigorously test how it should work in practice.

Unison national officer Stephen Weeks welcomed the new pilots as a measure that would protect staff.

'Clearly this is a response to the magnificent struggle the Dudley strikers carried out, ' he said.

A DoH spokesperson said the pilot scheme 'follows on from Dudley really' but he claimed the pilots are 'completely different' to the offer made to Dudley.

The pilots, due to be concluded by the end of the year, are expected to include PFI schemes at South West London Community trust worth£20. 5m and at Stoke Mandeville worth£23. 7m, with the possible addition of a£148m scheme at Havering Hospitals trust.

Mr Weeks said it followed the model of Southern Derbyshire acute trust, where for the past five years support staff have been employed by the NHS but managed by private contractors.

Nigel Edwards, policy adviser for the NHS Confederation said: 'We have had a pilot of this - It is how consultant medical staff used to be employed.

'They were employed by the RHA and managed by their unit. It is a problem to ask people to deliver when they do not directly manage them - that example doesn't augur that well but let's see how the pilots work. '

For more on Unison's conference, see www. hsj. co. uk