Support Services
The UK government first introduced competition and contracting in the provision of non-clinical support services in the 1980s, under a policy of compulsory competitive tendering. While this policy was controversial at the time, subsequent governments have continued to pursue this policy, particularly in association with the construction of new hospitals and the renovation of old under the 'Private Finance Initiative'.
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Smarter Food Procurement in the Public Sector (PDF)
House of Commons Public Accounts Committee, 2007
The Stationery Office
This report examines the organisations responsible for the three largest areas of public food procurement - Department for Education and Skills, the Ministry of Defence and the NHS Purchasing and Supply Agency. It argues that improving certain practices such as pricing negotiations and levels of frontline expertise can allow public bodies to improve significantly the efficiency of their food procurement while also sourcing ethically and enhancing sustainability.
Sustainable Food and the NHS (PDF) Jochelson, K; Norwood, S; Hussain, S and Heer, B, 2005 King's Fund In 2004 the Better Hospital Food Programme (BHFP) commissioned the King's Fund to identify opportunities for managing food procurement sustainably and promoting healthy eating in acute hospitals. This is their report, which includes a framework to help organisations to assess their procurement and catering practices, and recommends policies, menu designs and contract specifications to realise the environmental, economic and social benefits of sustainable public procurement. ISBN 1 85717 541 7 UK
Contracting for Health Services in a Public Health System: the New Zealand Experience
Toni Ashton, Jacqueline Cumming and Janet McLean, 2005
Health Policy, 2004, Vol. 69, Issue 1.
Hospital Contract Cleaning And Infection Control (PDF)
Davies, Steve , 2005
Commissioned by UNISON
This paper brings together infection control in hospitals and the contracting-out of public services, and argues that such a link exists and that the standards of hospital cleaning have declined. In examining the regime of competitive tendering, the report argues that cleaning standards have fallen as a direct result of contracting out. It concludes that there should be an end to tendering regimes that put cost ahead of quality, and that the economic cost of infection and infection control should inform decisions for resource allocation of cleaning.
Outsourcing in the Australian Health Sector Young, Suzanne, 2005 International Jounal of Public Sector Management, Vol 18 No 1, 2005, pp 25-36. This paper examines the reasons and approaches used at three health organisations - a rural hospital, a metropolitan network, and a large metropolitan hospital - in adopting outsourcing. Why do managers outsource certain services in preference to others? Cost/value-for-money is only one factor. Australia
Competition and Costs: Evidence from Competitive Tendering in the Scottish National Health Service Robin Milne and Robert Wright, 2004 Scottish Journal of Political Economy, Vol. 51(1), February 2004, pp. 1-23. This paper estimates the impact of competitive tendering on cleaning costs in Scottish National Health Service hospitals between 1986/7 and 1991/2. These support the contention that CT led to a cost-reduction for support services, but for a much lower order than that previously identified - around 4-6%. The authors conceded that some of the difference with other studies may be due to differences with the subject - but also that their approach ironed out a number of methodological problems elsewhere. Significantly, this report confirmed findings elsewhere that it was the presence of competition, rather than any intrinsically superior efficiency in the private sector, which drove costs down. UK
Improving Patient Care by Reducing the Risk of Hospital Acquired Infection: A Progress Report (PDF)
National Audit Office (NAO), 2004
The Stationery Office
This report goes beyond the high level focus on hospital acquired infections to look at practical application - highlighting a lack of adequate data as an impediment to progress.
Revised Guidance on Contracting for Cleaning (PDF)
NHS Estates, 2004
Department of Health (DoH)
This guidance/best practice manual is designed to assist the NHS in ensuring that contracts for cleaning are driven by quality rather than price.
Towards Cleaner Hospitals and Lower Rates of Infection (PDF)
Department of Health, 2004
This is the DoH action plan for cleaner hospitals and lower rates of infection. In particular it seeks to counter concerns that reduced waiting times and resulting higher bed occupancy have led to an increase in MRSA.
Hospital Cleaning (PDF)
Audit Scotland, 2003
Winning Ways - Working Together to Reduce Healthcare Associated Infection in England (PDF)
Chief Medical Officer (CMO), 2003
Department of Health
This report by the CMO sets out key issues and detailed guidance in seven action areas to reduce healthcare-associated infection
Contracting Not-for-Profit Organisations for Delivery of Health Services Auditor-General for Western Australia, 2003 This audit identifies a range of issues and opportunities for potential improvement in the Department of Health's use of Not-for-Profit Organisations (NFPOs). In particular it examines the processes underlying granting of funds and purchasing of services. Australia
Competitive Tendering in the Scottish National Health Service: Was It Compulsory, and Did It Make a Difference? (PDF) Robin Milne and Robert Wright, 2000 Scottish Affairs, Vol. 31, Spring 2000, pp. 133-152. This paper explores whether CCT was compulsory in the Scottish NHS, given the slow take-up rate following the 1983 DHSS advice. It also estimates cost savings as a consequence of competitive tendering where it took place. UK
Contracting Out Building Cleaning Services at the National Hospital of Denmark
Jensen, Wayne , 1997
Organisation for Economic Co-operation and Development (OECD)
Hospital Catering Delivering A Quality Service (Web Page)
NHS Executive, 1996
Department of Health (DoH)
This DoH index of good practice for NHS hospital catering is intended for use by NHS Trusts, health authorities and independent catering contractors. Divided into six sections it covers contract management issues, staffing, food hygiene and safety, nutrition, meal and service quality, and cost control and security of catering assets. No electronic copy is available but the above link provides access to online ordering.
Competitive Tendering in UK Health and Local Authorities: What Happens to the Quality of Services?
McMaster, Robert , 1995
Scottish Journal of Political Economy, 42(4), pp.409-427
This is a survey of 21 health and local authorities, principally in relation to cleaning, catering and maintenance, with particular reference to quality.
A Non-Parametric Approach to Identifying the Sources of Cost Savings Arising from Competitive Tendering
McMaster, Robert, 1995
Applied Economics Letters, 3, pp.463-466
A study on the sources of cost reductions from 17 councils which had competitively tendered 109 health and 86 local authority contracts.
The Determinants of Price and Quality in Competitively Tendered Contracts Domberger, S.; Hall, C. & Li, E. , 1995 The Economic Journal 105(433), pp.1454-1470 This is a study testing for the effect of competitive tendering on the price and ex-post quality of 61 cleaning contracts (22 office, 7 hospital and 32 school) in the Sydney Metropolitan region. In general, tendering led to lower prices and higher quality although not all results were found to be significant. Taking into account the hospital results it was tentatively suggested that competition not ownership is important in reducing prices. More importantly the quality shading hypothesis is rejected on the basis of lower prices provided by competitively tendered contracts with generally higher levels of cleaning performance. Australia
Competitive Tendering for Domestic Services: A Comparative Study of Three Hospitals in New South Wales
Hall, Christine with Domberger, Simon , 1995
Domberger, Simon & Hall, Christine (eds), Australian Government Publishing Service, pp.99-136. First published as 'Competitive Tendering for Domestic Services: A Comparative Study of Three Hospitals in NSW', Graduate School of Business, University of Sydney, 1992.
This study examines three case studies of cleaning services in New South Wales hospitals following the introduction of competitive tendering pilot projects in 1989-1990. The tendering process, winning bid and contract outcome are examined in each case. In Hospital A, the in-house team won the bid and provided an improved service 20.8% cheaper than previously. In Hospital B, an outside firm won but also provided an improved service at significantly lower cost - 29.7% in this case. In Hospital C, however, the results were not so impressive - an outside contractor won with the lowest bid, promising big cost-savings, but the quality of service deteriorated to such an extent that the contract was terminated. More broadly, in the period 1989-1992 saw a 13.2% reduction in expenditure on hotel services in NSW.
Contractors' Experience of Compulsory Competitive Tendering: A Case Study of Contract Cleaners in the NHS Robin Milne, 1993 Public Administration, Vol. 71 (Autumn 1993), pp. 301-321. This paper attempts to redress a perceived imbalance in the CCT literature. While there is an extensive literature on the experience of government in implementing CCT (costs and outcomes, quality, and so on), little had been written on the supply side of the market. The author therefore reports on the extent of competition and experience of outcomes for contractors in the market for NHS domestic cleaning contracts. UK
Compulsory Competitive Tendering in the NHS: A New Look at Some Old Estimates
McGee, Magnus & Milne, Robin , 1992
Fiscal Studies, 13(3), pp.96-111
This paper followed in the footsteps of Domberger et al (1987) to estimate the effect of CCT on service expenditure in support services. It used a similar statistical approach for domestic and catering services to measure expenditure reductions, and then asked whether these reductions might be offset by the costs of CCT implementation. CCT was found to reduce costs in both domestic and catering, by 17% and 5% respectively. However, the small sample meant that there was a big margin of error in these estimates so neither is statistically significant. The difference between these reductions is also not found to be significant, though the respective magnitudes (domestic expenditure reductions greater than catering) reiterate findings elsewhere. See NAO (1987) and Domberger et al. (1987).
The NHS Privatisation Experience: Competitive Tendering for NHS Services Joint NHS Privatisation Research Unit, 1990 Written by a 'research unit' representing five major trade unions, this is a polemical review of the third-party costs imposed by competitive tendering - the cost of arranging and evaluating bids; of monitoring services, of redundancy and reduced pay; of increased staff turnover. Allegations of explicit racism and sexism in private contractors' methods are also made. There are valid points to be made with regard to both the costs of tendering and the social costs of workforce reductions but there is no serious attempt to address either these complex issues or counter arguments. UK
The Facts on the NHS Privatisation Experience: A response to The NHS Privatisation Experience by the Joint NHS Privatisation Research Unit Contract Cleaning and Maintenance Association, 1990 This document from a trade association was published in direct response to Joint NHS Privatisation Research Unit (1990). They report that the methodology and presentation of JPRU was disingenuous and misleading. After early problems, tendering had delivered substantial savings for the NHS and would continue to do so in the future with government backing. However, this response does not fully engage with all of the points raised in the original document, in some cases for understandable reasons and in others because the authors here too were employed by vested interests. UK
Too High a Price to Pay? A Study of Competitive Tendering for Domestic Services in the NHS
Bach, Stephen , 1989
Warwick Papers in Industrial Relations, No.25, Industrial Relations Research Unit, University of Warwick
This paper is a detailed case study of the impact of competitive tendering for domestic services in one English health authority. It reports that following tender standards dropped dramatically with an associated increase in risks and costs for patients. The service was then returned in-house, but not without lasting damage to the moral and strucutre of staff.
The Competitive Advantage: Report of the CBI Public Expenditure Task Force
Confederation of British Industry (CBI), 1988
This report examines a decade of competition in the provision of UK public services, claiming to draw on the experience of that time to lay out future strategy in government. It looks across central and local government with a focus on health sector. It found that competition had brought, and would continue to bring, major advantages and opportunities for consumers, taxpayers, businesses and public sector managers through financial savings. Cost reductions have varied in the health sector, with 23% in cleaning the highest available.
Competitive Tendering for Support Services in the National Health Service
National Audit Office, 1987
The Stationery Office
Competitive Tendering in the NHS: An Economic Analysis of the Early Implementation of HC(83)18
Milne, Robin G. , 1987
Royal Institute of Public Administration, Vol. 65, pp.145-160
This paper makes an in-depth analysis of six contracts put out to tender in the early days of CCT in the NHS. It finds that significant cost savings are achieved - but often at the expense of wages, with staff resignations and redundancies common.
The Impact of Competitive Tendering on the Costs of Hospital Domestic Services Simon Domberger, Shirley Meadowcroft and David Thompson, 1987 Fiscal Studies, Vol.8, No.4, 1987, pp. 39-54. This statistical analysis of CCT in hospital domestic services measures the relationship between cost of service provision and whether or not the service had been subject to competitive tender. Cost savings of around 20% were likely in tendering out domestic services in hospitals, though there had been various teething problems. UK
Contracting-Out in Health and Local Authorities: Prospects, Progress and Pitfalls
Hartley, Keith and Huby, Meg, 1985
Public Money, September Issue pp.23-26
Can In-house Caterers Cope? Health and Social Service Journal, 1983 This article from a public sector journal blends statistics and interviews with stakeholders to argue that an increasing number of catering contracts are being awarded in-house due to increased NHS efficiency in the face of private competition. In the period 1974-83 catering expenditure fell from 7.3% of NHS expenditure to 5.6%, while the cost of in house provision of patient meals fell 7% in real terms. Public sector managers claim that productivity has increased because "We see [privatisation] as a challenge". UK