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NHS 'sell off' angers unions

Published on 05/09/06 at 05:47pm

The government has signed a deal with logistics company DHL to take over the purchase of essential items to the NHS, a move which it says could save the health service one billion pounds a year.

But the deal has been condemned as a betrayal by health service unions, which say it could compromise the public service currently provided in favour of private profits.

The service has until now been provided by NHS Logistics, an in-house organisation which supplies hospitals, GP surgeries and patients with surgical supplies and products ranging from aerosols and arrowroot to zinc and castor oil.

NHS Logistics currently oversees just 10% of the health service's purchasing budget, but DHL will bring together purchasing across the entire NHS, controlling a single budget worth 3.7 billion pounds.

Under the contract, DHL has to reduce prices to hospitals, and is expected to do this by increasing the range of products.  The Department of Health says the company will work closely with clinicians to decide the best products for the NHS and ensure innovation isn't stifled.  DHL will also be bound by procurement rules, which allow a range of companies to provide products to the NHS.

Health minister Andy Burnham said: "This is a good deal for staff, patients and the taxpayer.

"The arrangement means substantial scope for bringing down the prices of the goods that NHS trusts buy.  We estimate that around one billion pounds which trusts currently spend on such goods could be released over the course of the contract - money which then can be reinvested in patient care.

"I acknowledge the good work that has been done by NHS PASA and NHS Logistics and the commitment of their staff to the NHS. But the NHS is not an expert in distribution or warehousing.  There is a compelling case to bring in a company which is.

"DHL will expand the business, invest in infrastructure, IT and customer services and through its sub-contractor Novation improve procurement. Consolidation of more NHS spend through this channel will allow the NHS to exercise its buying power and benefit from a wider range of products at more competitive prices."

Burnham said NHS Logistics staff would have at least the same terms and conditions as they have at present, including staying within agreed NHS Agenda for Change pay rates.

Despite such reassurances, unions are angry about the contract, and have threatened industrial action.

Members of UNISON are currently being balloted on strike action against the privatisation, with the ballot result expected on Monday, 11 September. Members being balloted for strikes by UNISON are based at distribution centres in Alfreton in Derbyshire, Runcorn, Cheshire, Normanton, West Yorkshire, Maidstone, Kent and Bury St Edmunds, Suffolk.

If the deal goes ahead, UNISON says it could be the biggest industrial privatisation in the history of the NHS.

UNISON's general secretary Dave Prentis, said: "UNISON members are proud to work for the NHS and feel betrayed by a government that is handing them over to DHL - like one of the packages they deliver."

He added: "It [NHS Logistics] is an award-winning organisation delivering a first-class service. The government's decision to privatise it is driven by pure dogma and an obsession with market testing."

Karen Jennings, the union's head of health, stressed:  "This is a very sad day for the NHS. The government has not listened to the workforce - or to reason. Staff across the NHS will be watching this privatisation deal, which will be viewed by many as symbolic of what is to come.

"Why break up a winning team like NHS Logistics and sell it off to a German parcel company?  It makes no sense when there is no doubt that NHS Logistics is an NHS success story. We will fight to keep these jobs in the NHS."

The ballot by UNISON follows a TUC delegation of health union members to Health Secretary Patricia Hewitt, who argued that plans to outsource and privatise parts of the NHS - including NHS Logistics - will not deliver the improvements to health services that both unions and the government want to see.

TUC general secretary Brendan Barber said: "Health unions support reform that delivers better patient care, but too many current changes seem to be driven by an ideological preference for the private sector and will not benefit patients."

He continued: "The government's relentless changes and preference for privatisation is causing growing frustration among staff who want the NHS to succeed, but I think their views have not been taken into account."

NHS Logistics will now be operating under a new brand name  NHS Supply Chain - run by DHL on behalf of the NHS Business Authority. It will be responsible for delivering all procurement and logistics services across an initial 500,000 products to support 600 hospitals and other health providers in England.

According to John Allan, the chief executive of DHL's Logistics division, the contract will ensure that NHS authorities can dedicate more resources to patient care and will help protect existing jobs, as well as leading to the creation of more than 1,000 additional positions.

"This contract is both good for staff and good for the NHS," he said. "We are committed to targeting savings on behalf of the Department of Health that can be directed back to patient care, by building upon the success of both NHS Logistics and some of the scope of the NHS Purchasing and Supply Agency."

The wide range of NHS products to be managed by NHS Supply Chain will include supplies and maintenance of food, bed linen, office equipment, stationery, cleaning products, patients clothing, medical and surgical equipment, dressings and provisions.


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