Published: 27/05/2004, Volume II4, No. 5907 Page 12 13

With many PCTs opting to provide their own out-of-hours services and the granting of special health authority status to NHS Professionals, the private sector's role in NHS staffing is looking less assured.By Paul Smith and Paul Dinsdale

The UK's leading private provider of out-of-hours primary care services has said it will continue to compete for contracts from primary care trusts despite suggestions that trusts have been turning their backs on private sector provision.

Last week, Nestor Healthcare Group chief executive Justin Jowett quit, and the company issued a profit warning, causing its share prices to nosedive by 36 per cent.

Nestor is the parent company of Primecare, which had expected to sign a series of contracts with PCTs to run out-of-hours services.

But in what is seen as a blow to private sector involvement in the NHS, early indications suggest that the vast majority of primary care trusts have decided to provide their own out-of-hours services rather than buying them wholesale from private providers.

Primecare medical director Dr Mike Sadler admits the company's strategy has not worked out as expected, but suggests that around 40 per cent of PCTs have still to make a decision on how they would provide out-ofhours services.

'That still leaves a lot to play for in our eyes, ' he says. Primecare has written to all PCTs following the resignation of Mr Jowett. The letter attempts to reassure the organisations of the company's commitment to 'high-quality out-of-hours services'.

The Department of Health will not comment on commercial issues in the NHS, but one primary care source claims the plight of Primecare has damaged the government's commitment to private sector involvement in public services.

'I think it has shown the value of the GP co-ops and that for the vast majority of PCTs providing outof-hours care themselves offers better value for money and a better service than the private sector.'

Nestor is also a major provider of private nurse agency staff, and the firm's chair, John Rennocks, has said that a significant fall in the use of agency staff by NHS organisations has also hit the company's turnover.

On 1 April, NHS Professionals, the NHS's own staff agency, became a special health authority. This, it says, will give it more scope to build an organisation based on 'a coherent national strategy, standardised service levels and a consistency of approach'.

NHS Professionals currently receives an average of 200,000 requests each year from NHS organisations across the country for shifts - and the figures are rising.

In 2002-03, spending on nonNHS nursing, midwifery and health visiting staff by NHS trusts was just over£554m; spending by PCTs on the same staff was more than£73m.

But Stephen Rubel, director of the Nurse Agencies Association, which represents private nursing agencies, says the Department of Health is putting pressure on managers to use NHS Professionals, which it sees as a cheaper option for meeting temporary staffing needs. Mr Rubel argues that this is not the case.

'The costs of agency nurses can't be compared directly with the costs of NHS nurses, which are always made in terms of their hourly rates, ' says Mr Rubel.

'But these do not take into account the additional costs to the trust of National Insurance contributions, Criminal Records Bureau checks and other overheads in employing staff.' Mr Rubel says the NAA has offered to commission an independent study comparing the costs of agency nurses with those in NHS Professionals, but the Department of Health declined the offer.

Cash-strapped trusts have managed to save money by slashing their nurse agency bill, but Mr Rubel alleges that some trusts have been reducing their spending on agency nurses, after pressure from the DoH. However he claims that they have not replaced them with any from NHS Professionals, thereby reducing their ratio of nurses to patients.

Litigation is looming as some nurse agencies are taking legal action against trusts after being dropped from local framework agreements which govern the use of agencies by trusts.

Agency Thornbury Nursing Services chief executive Gary Spellins says demand has decreased in some areas but increased in others. He claims there has been no dramatic downturn in private provision of nurses.

He believes there is room in the market for both private agencies and NHS Professionals. This view is shared by Tony Durcin, professional officer at the Royal College of Nursing, who has special responsibility for working with NHS Professionals.

He says: 'The RCN's position is that the market is big enough to accommodate NHS Professionals, the large agencies and small agencies.'