Success of staff-transfer pilots 'takes brakes off 'PFI progress

The government is to push ahead with a major expansion of private finance initiative schemes, involving the transfer of NHS staff to private companies, and has declared itself 'satisfied in principle' with four pilot schemes testing the 'retention of employment'model.

Speaking to a private meeting on Monday of PFI providers and funders, health minister John Hutton vowed to 'take the brakes off ' progress on PFI, and said pilot models for transferring NHS staff on the same pay and conditions would be rolled out across all future PFI schemes.

At the meeting, held at the headquarters of Barclays Bank, Mr Hutton said the government intended to speed up the bidding process for PFI projects.

He said the idea of funding bidders' costs was being examined, and it was also possible there would be 'one central competition for a partner, with the partner responsible for negotiating detailed prices for several projects with a number of trusts concurrently'.

Business Services Association director general Norman Rose suggested that the government was moving too fast, and said it was too early to say whether the pilots had worked: 'It is probably going to be two years before the first services transfer on this policy, so nobody will know for a long time whether it can work efficiently.'

He said there were serious question marks over whether the government could deliver on its promises: 'If they try to go too quickly, they may find that the private sector many not be able to do that. I would think there are probably not more than 15 companies which are really key in bidding for PFI projects.'

Mr Rose also said the idea of funding bidders could have huge financial implications. 'If there are going to be about 50 hospital projects, and let us say each put in£2.5m costs, the government is being asked to stump up£125m of costs.'

A meeting of Unison's health service group next Wednesday is likely to approve the final proposals for transferring staff to the private sector, but the union has made clear that it still opposes the extension of PFI and that the government should fund capital spending. A spokesperson said: 'We believe that it can and that it should, that borrowing through the private sector is always going to be more expensive, and the money is available, but they do not want public borrowing to increase.'

Twenty-three people have expressed an interest in taking on the management of three trusts to be franchised by South East regional office. The recruitment process for Ashford and St Peter's Hospital trust, Dartford and Gravesham trust and Portsmouth Hospitals trust is being run by South East regional office. A spokesperson said it had received requests for information from 23 people. The applications include managers from social services and parts of the NHS outside acute hospital trusts. London region shared the deadline of last Friday for expressions of interest, but did not have information available about candidates who came forward.