Contractors accuse government of moving goalposts over decision to allow trusts to keep staff.
Ministers are refusing to back down over their decision to give NHS trusts the power to keep ancillary staff in the public sector rather than transferring them automatically to private finance initiative consortia.

The consortia say that the government has changed the rules for staff transfers and claim that the viability of up to seven PFI hospital deals is under threat. But chief secretary to the Treasury Alan Milburn told Building at a conference fringe meeting that the government would not reverse its decision to give NHS trusts the discretion to decide. Milburn said: “Government changes have made it fairer and more efficient.”

Under the new procedure, NHS trusts will decide whether ancillary staff are moved from the public to the private sector in a PFI deal, whereas before they were transferred into the private sector automatically.

Milburn said: “The issue is now hammered out locally. This is better because I cannot make decisions about the transfer of staff back at the Treasury.”

Contractors are concerned about the viability of schemes affected by the policy change. “It doesn’t help when the government changes the rules half-way through,” said one leading PFI contractor. “We priced the risk based on staff transferring over, now we don’t know whether they will or not.”

The contractor added: “We hope the trusts will assess the transfer on a value-for-money basis, because we can offer the best deal.”

The issue is now hammered out locally. This is fairer and more efficient

Alan Milburn, Chief Secretary to the Treasury

Unison, the union that represents many of the 15 000 workers affected, is pleased with the decision but wants the government to go further. Dave Prentice, deputy general secretary of Unison, said: “We’re pleased with the decision so far but there will still be local disputes. We will be pushing for a policy of no transfer of staff.”

Secretary of state for health Frank Dobson rejected contractors’ pleas and denied that he had moved the goalposts over automatic transfers. He said: “We haven’t changed the rules half-way through.”

Telling contractors that they would just have to get on with the deals, Dobson added: “If it’s in the contract, then it’s in the contract. It is up to them whether they sign it.”

Dobson’s claim that there has been no rule change appears to be contradicted by a statement in the Labour Party National Policy Forum Report to Conference for 1999.

This states that: “Labour will ensure that PFI deals protect the interests of the NHS and end the requirement to transfer catering, cleaning, portering and similar support services to the PFI consortium.”.