Private finance initiative contractors have offered a novel solution to a wrangle over who employs ancillary staff at PFI hospitals in the Midlands.

The £177m scheme to replace Derby City Hospital and Derby Royal Infirmary has prompted bids that allow managers to be transferred to the private sector and allows porters and cleaners to remain in the public sector.

PFI contractors were outraged earlier this year when Alan Milburn, then chief secretary to the Treasury, asked health trusts to request variant bids. One price would be for staff remaining in the public sector, the other would be used if they transferred to the winning consortium.

The contractors complained that this changed the rules half-way through bids, leaving consortia with more risk than they had priced for. They also felt that they could employ staff more efficiently than the trusts.

One contractor involved in PFI bids said the Derby bid, which is for client Southern Derbyshire Acute Hospital NHS Trust, gives consortia greater control over the employment and management risks. Unison said it is also happy with the bid.