Legal loopholes let Trust bosses push through privatisation – An introduction by John Lister, followed by Andy Benson’s account of the legal battle to prevent the outsourcing of non-clinical staff in a North Essex NHS Trust
As NHS trusts draw up plans to axe large numbers of “non-clinical” staff in efforts to contain spending within even tighter limits in 2025/26, the lessons from the first major non-pay dispute to break out since the election of Keir Starmer’s Labour government last July have taken on greater and much wider significance.
For while many trusts will inevitably wind up also making significant cuts in clinical staff numbers (and clinical services) as they struggle to get by on their inadequate allocations, it’s clear that non-clinical staff are the prime targets – and that many NHS bosses as well as politicians are living in denial of the consequences of this policy.
The dispute in question broke out in Colchester Hospital and surrounding units run by the East Suffolk and North Essex Foundation Trust (ESNEFT). It was a long running dispute, involving strike action by staff strongly opposed to the transfer, as well as protests and lobbying against the Trust’s plan to outsource the bulk of its non-clinical services (chiefly hospital porters, cleaners, catering and housekeeping services).
On the part of the Trust management and Board, the whole episode was one of intense secrecy, dishonest and frequent misinformation, appalling lack of engagement with the staff affected – and total absence of any patient or public consultation.
Despite the strikes and protests, on December 5th last year, the ESNEFT board rubber stamped the outsourcing decision, announcing that support services in Colchester and in the Trust’s other main hospital in Ipswich would be taken over by Sodexo.
Suffolk Keep Our NHS Public (KONP), working with Suffolk Unite Community, opened legal proceedings against the Trust, alleging its unlawful neglect of duties regarding engagement and consultation. Although our Counsel’s opinion confirmed that there were grounds to challenge the legality of the proceedings, we were unable to raise the funding necessary to go to full Judicial Review.
An article setting out the story was published in The Lowdown in March. Though the struggle locally has been lost, the issues involved have not by any means gone away. This new article, by ANDY BENSON of Suffolk KONP sketches out more detail of the issues that underpinned the legal challenge, in the hope that this will be useful to others elsewhere who are faced with similar circumstances.
The issues
Our argument with the Trust centred on real or apparent differences between clinical and non-clinical NHS staff. This comprised two separate but related issues:
- Whether, when considering service changes such as privatisation, the duties on Foundation Trusts regarding engagement and consultation with staff, patients and the public apply to non-clinical staff; and
- Whether the NHS Standard Contract, used to regulate the relationship between the NHS and a Foundation Trust, places responsibility on the commissioning body, the local Integrated Care Board (in this case Suffolk and North East Essex [SNEE] ICB) to monitor, assess, approve or reject significant service changes (including privatisation) involving non-clinical staff.
The position of ESNEFT was ‘no’ on all counts. In their view consultation with staff was essentially discretionary, but had also been extensive (this was strenuously contested by Unison). The Trust also argued there was no duty or requirement to engage with patients or the public; and the Contract with the ICB only related to clinical services.
The ICB officers maintained throughout that the running, quality and performance of ESNEFT’s non-clinical services did not fall within the Standard Contract, and were of no interest and concern to them.
Consultation and engagement
This issue relates to whether the Trust was obliged to undertake any consultation with the public, service users, or both, in pursuing its privatisation proposal. The Trust acknowledged that no such consultation had taken place but maintained that this requirement was confined to changes in clinical services and therefore did not apply to the management or delivery of ‘soft facilities’ services.
This duty of public involvement is contained in Section 242 of the NHS Act 2006, which states that each NHS Foundation Trust must:
“make arrangements, as respects health services for which it is responsible, which secure that users of those services, whether directly or through representatives, are involved (whether by being consulted or provided with information, or in other ways) in –
- the planning of the provision of those services,
- the development and consideration of proposals for changes in the way those services are provided, and
- decisions to be made by that body affecting the operation of those services.”
The difficulty is that ‘health services’ is not defined in s.242 and there is no definitive definition elsewhere of the term. At various places ‘healthcare services’ and ‘health-related services’ are used. The closest provision to s.242 is an equivalent duty of public involvement on ICBs in s.14Z45. The defining provision for “health services” for that section is 14Z64, which says that “health services” means services provided as part of the health service, i.e. a broad definition.
However, the confusion over this term is what allowed the Trust to maintain that non-clinical services are not ‘health services,’ and therefore excluded from the requirement for external consultation.
Our argument was that such exclusion might apply to, say, cutting the grass at the hospital. But it was ridiculous to maintain that portering, catering, cleaning, sterilisation, infection control, etc are not instrumental in the provision of health services – and that therefore, they should not be included or regarded as an integral part of “health services”. Also, that negligence in the provision of these services leading to personal injury would expose the Trust to liability in their provision of clinical care.
We therefore alleged that there was an error of Law here which led to a breach of the s.242 duty. Clearly there is room for legal clarification here, but we were unable to obtain this through a follow through of our challenge to Judicial Review.
Our barrister’s opinion was that the basis of our challenge could have succeeded but only if we had been able to demonstrate clearly to the Court that “…there is a strong factual case based on evidence of the importance of cleaners/porters to the health services they provide…. as well as evidence of the negative effects of outsourcing on these services.” Bizarre though this appears, for activists elsewhere faced with the same circumstance, this is the justification that it would be most useful to pursue.
With respect to staff consultation, ESNEFT maintained that it had complied with all requirements in this respect. The staff and Unison strongly disputed this, and there was plenty of evidence of the scant and disrespectful behaviour of the Trust. But we did not pursue as part of our legal challenge because we knew it would descend to a ‘yes we did’, ‘no you didn’t’ argument.
ICB Contract arrangements for NHS funding to Foundation Trusts
The second issue relates to the provisions of the NHS Standard Contract which specify the terms and relationship between the NHS as commissioner and the Trust as provider. The Contract is held by the SNEE Integrated Care Board. We did not include this as an explicit element of our legal challenge as this would have involved the ICB as a party to the action and we didn’t have the time or money to pursue them as well.
However, we did persistently bother the ICB’s Chief Executive and his Board as to why they didn’t seem to be involved in the Trust’s proposal to privatise these services. The ICB confirmed that it had taken no role in the matter and that what ESNEFT did with the management of these services was of no relevance or interest to the ICB. It was even confirmed that they had neither requested nor received any material documents relating to the outsourcing.
It needs to be said that these statements were made on behalf of the Board, the members of which were at no point asked for a view on the issue. Indeed, they all sat like stuffed dummies through all the discussions that took place in their public meetings.
As already noted above, the position stated was the Standard Contract was wholly concerned with the commissioning of clinical services, and what the Trust did with its non-clinical services was nothing to do with the ICB.
Our argument that this view is mistaken falls into two parts – that the Standard Contract does state and otherwise imply, that non-clinical services are covered by the Contract and, secondly, that funding for these services is provided within the arrangement and therefore forms part of the Contract. This latter therefore implies that the ways in which this funding is spent is material to the Contract and places responsibilities on the ICB with respect to monitoring, review and enforcement.
For the first part, it is necessary to refer to General Conditions (GC5) of the Contract to support to our argument. This includes that:
- The Provider must apply the Principles of Good Employment Practice (where applicable), abide by the staff pledges and responsibilities outlined in the NHS Constitution and implement the actions expected of employers as set out in the NHS People Plan. Both ESNEFT and the ICB ignored all that;
- The Provider must ensure that there are sufficient appropriately registered, qualified and experienced medical, nursing and other clinical and non-clinical Staff to enable the Services to be provided in all respects and at all times in accordance with this Contract. The ICB did not check that the contract with SODEXO delivers this;
- ….undertake a detailed review of staffing requirements every 12 months to ensure that the Provider remains able to meet the requirements set out in GC5.2.1. This has never been done.
The ICB was in default of all these requirements and flatly refused to intervene, even when asked to. They could and should have enforced the contract which clearly references non-clinical staff. The clinical implications of a lack of cleaners or of poor-quality cleaning, for example should be obvious even to the ICB.
With respect to the funding for non-clinical services, the Standard Contract is another example of extraordinary drafting incompetence as the specific terms only list the clinical services included. The way it works is that the Provider is paid a “tariff” for each listed service, which is based on the average cost of delivering the relevant procedure etc. The tariff is not only based on the actual cost of the procedures; its calculation also takes into account the costs of “overheads” – which will include cleaners, porters, caterers and the rest (including the Chief Executive’s salary).
This is the way Ed Garratt, the CEO of SNEE ICB describes the position in a letter dated 3rd April:
“The NHS Payment Scheme governs transactions between providers and commissioners of secondary (hospital) healthcare. It covers the pricing of healthcare services provided for the purposes of the NHS. It does not include any requirement for commissioners to pay for facilities management or other non-clinical support services, and does not provide for any “top slicing” of payments made by commissioners to providers to cover the cost of those services.
This simply does not make sense. Whether required or not it is clear that the Contract with ESNEFT does include facilities management and that these costs can only be met by the Trust top-slicing the funding they do receive. The costs involved here were estimated by the Trust at £180 million over 5 years or £36m per year of taxpayer’s money. This could not be raised through Trust jumble sales!
Again, a Court ruling on all this would clarify the position, but, for the moment, activists faced with such plans for the disposal of non-clinical staff should anticipate the above arguments being relied upon by Trusts and ICB and prepare for their rebuttal.
Public Interest Test
A further twist of this tale is the prospect of the Public Interest Test as part of Labour’s ‘new deal for working people’. This initiative of the new Labour Government is intended to ensure that all public bodies – before outsourcing – will demonstrate the social value of their plans by testing for value for money, the impact on service quality and on holistic economic and social value goals.
This requirement is eventually supposed to be rolled out across the country: but the Bill itself is not expected to pass into law until June or July, and many changes will only be implemented after this via secondary legislation.
So the ESNEFT outsourcing seems to have narrowly slipped through before the law was changed, and the Trust was therefore able to argue that the Test was not yet required. If the Trust had been required to undertake this assessment it would certainly have failed it on the value-for-money criterion, and possibly on others.
The future
Recent policy developments and statements on the question of outsourcing and insourcing are depressing, to say the least. Here we have an example where a Foundation Trust behaves badly, the ICB effectively conspires with their plans, neither the NHSE nor the DHSC shows any interest, and Wes Streeting, the Secretary of State is reported as specifically refusing to intervene (he could have stopped the thing with one phone call).
Subsequent recent comments by James Mackay, NHS England’s new Chief Executive, are not helpful, urging Trusts to float non-clinical support services off to wholly-owned subsidiary companies as a way of reducing costs. Meanwhile, Streeting’s closest advisers are increasingly revealed to be drawn from the private health care sector or known to support their interests, while his private Parliamentary office appears to be dependent on a number of private health care donors.
Taken together there are strong indications that Labour’s promise to reverse privatisation and bring outsourced services back into direct management has hit the rubbish bin.
Nonetheless if the safety and quality of health care provided by the NHS is to be upheld and improved, opposing these developments and defending safe staffing of non-clinical as well as clinical services is more important than ever.
If we are unable to rely on politicians and others at national level, then detailed and forensic opposition at local level may be the only recourse available to us.
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