Latest news with #insourcing
Telegraph
20-07-2025
- Business
- Telegraph
Labour stokes union anger by failing to curb outsourcing
Labour is facing backlash from unions as data revealed spending on outsourcers has surged since Sir Keir Starmer took office. Public sector spending on outsourcing contracts has risen 7pc since Labour secured the election victory last year, despite the party promising to crack down on public procurement. Data from Tussell showed the value of contracts awarded to outsourcing giants including Mitie and G4S has increased to £3.68bn since Labour gained power, compared to £3.45bn under the former Conservative government in the year before. The increase comes after Rachel Reeves in 2021 pledged to slash spending on outsourcers by ushering in the 'biggest wave of insourcing of public services for a generation' with the aim of saving money and improving public services. Trade unions have now hit out at Labour over its failure to cut spending following a series of clashes between outsourcing giants and some of Britain's biggest unions over contractors' treatment of workers. Fran Heathcote, general secretary of PCS, said: 'Before the election, Labour promised the biggest wave of insourcing in a generation, yet these figures suggest the tide is going out on that pledge. 'PCS represents thousands of workers on outsourced contracts who often suffer lower pay and worse terms and conditions … than those employed in-house. Labour needs to accelerate its commitment to insourcing.' A spokesman for Unison added: 'The Government has promised to bring privatised contracts back in-house. Unions will keep up the pressure to ensure this happens for the benefit of workers, the economy and communities across the UK.' Mitie in the spotlight Mitie has been the largest beneficiary of Labour's contracts so far, Tussell's figures show. Unions have repeatedly clashed with the London-listed outsourcing giant, accusing it of failing to pay staff adequately and mistreating workers. The awards have seen Mitie given £1.59bn worth of contacts since Sir Keir took office, including a £320m contract from HM Revenue & Customs for facilities management and a £1.08bn contract from the Department for Work and Pensions for security services. The contracts now risk further straining the Labour Party's relations with the unions that provide it with millions of pounds of funding each year. The Government is already facing mounting criticism over its relationship with Mitie after Britain's largest union, Unison threatened to picket a Labour Party drinks reception earlier this month, that was set to be held at Mitie's headquarters in the Shard. Trade unions had voiced concerns that the Mitie-sponsored event stood at odds with Labour's own plans to cut the Government's reliance on outsourcers. A source close to the Labour Party said: 'Commercial partnerships at events are a long-standing practice and have no bearing on party or government policy.' Mitie itself has repeatedly been subject to a series of strikes led by some of Britain's largest trade unions, including by Unison, which in February 2024 led a three-day walkout by 300 cleaners, porters and caterers from hospitals run by Dudley Group NHS Foundation Trust, in the West Midlands. On Friday, 200 cleaners and security guards represented by GMB voted to lead a separate strike over pay at the Sellafield nuclear facility in Cumbria, starting on Aug 1. A Mitie spokesman said: 'We are committed to helping our public sector partners build safer, stronger and more resilient communities, supporting people and places to thrive across the UK. Further clashes G4S, which has also clashed with unions, was the second largest beneficiary of Labour's spending on outsourcers, according to Tussell's figures, which show the security company has been awarded 16 contracts worth £1.05bn since Labour took power a year ago, including a £905m contract from the DWP. PCS is currently engaged a long-running dispute with G4S over pay for security guards working on the outsourcer's contract with the DWP for security at job centres. G4S was approached for comment. Sodexo has been the third biggest winner of contracts awarded under Labour, with the company winning four contracts worth another £615m since last July, including a £310m award from HMRC. A Sodexo spokesman said: 'Sodexo is proud to hold strategic supplier status as a preferred and trusted partner to Government.' A government spokesman said: 'The data referenced includes spending by devolved governments. 'Public sector bodies must already ensure any outsourcing decisions deliver on these priorities, but we are going further and consulting on a requirement that they carry out a public interest test before outsourcing any service – which would move the dial in favour of insourcing contracts.'
Irish Times
17-07-2025
- Health
- Irish Times
The Irish Times view on insourcing in the health service: not a longer-term solution
The Minister for Health, Jennifer Carroll MacNeill, is reviewing the use by the health service of third-party insourcing to cut waiting lists. It follows a review of the practice by the chief executive of the Health Service Executive, Bernard Gloster, who has recommended that it be phased out by the end of the year. What appeared to be a novel solution to reducing waiting times in the wake of the Covid epidemic has come to be seen as a costly problem. Under the initiative, introduced by then health minister Stephen Donnelly, private companies were encouraged to use spare capacity – in terms of trained staff and equipment – at public hospitals to provide services to patients on public waiting lists. The underutilisation that the initiative capitalised on was due in part to working hours and rostering limitations at public hospitals. The services were provided on a commercial basis and followed the precedent set by the outsourcing by the HSE of the treatment of public patients to private hospitals. The initiative succeeded in its primary objective of reducing waiting times, but its cost has proved problematic. Over ¤100 million was paid out in the 27 months to March to third party outsourcing companies, many of which are run by or employ existing HSE staff. READ MORE Concerns were raised at the outset about the possibility of conflicts of interest and the creation of perverse incentives whereby doctors and staff involved with third-party insourcing businesses stood to benefit from long public waiting lists. Some of these concerns appear to have been borne out, with a number of controversies prompting the review by Gloster. The Minister's dilemma is that while there may be political pressure to wind down the third-party insourcing initiative, there is even greater pressure to address waiting lists which are being driven ever upwards by demographic trends. The insourcing initiative is generally accepted to have made a material difference to waiting times. The HSE has agreed to new rostering arrangements for staff and hospital consultants which should see equipment and facilities used more efficiently, particularly over weekends and in the evening. However, this is unlikely to be sufficient to plug the gap created by abandoning third party insourcing. The existing reliance on private hospitals will most likely be exacerbated. The decision facing the minister is not a simple accounting exercise in which costs and benefits can be traded off. The HSE has clearly lost confidence in the initiative, and it is increasingly becoming a political liability for the Government. It may well have run out of the road, though phasing it out without adding to waiting list pressures will not be easy.
Irish Times
03-07-2025
- Health
- Irish Times
NTPF ready to restore funding to Beaumont Hospital when it receives ‘assurances over use'
The National Treatment Purchase Fund (NTPF) is ready to restore funding for insourcing initiatives to tackle waiting lists at Beaumont Hospital when it receives sufficient assurances regarding its appropriate use, the organisation's chairman Don Gallagher is to tell the Dáil Public Accounts Committee today. The provision of such NTPF funding for Beaumont has been paused since April on foot of what were described as 'potential financial irregularities'. The HSE this week defined insourcing as the practice of engaging external companies or third-party providers to deliver services often outside of normal working hours using public-owned facilities and equipment. It often employs existing healthcare personnel on premium rates. In an opening statement to the Dáil Public Accounts Committee on Thursday, Mr Gallagher will say that upon learning of 'potential issues in relation to NTPF-funded insourcing work at Beaumont Hospital, it immediately suspended all insourcing work and payments at Beaumont and informed the Department of Health and HSE of its concerns'. READ MORE He will say that HSE internal auditors are currently carrying out a detailed review in Beaumont. 'We are ready and willing to recommence insourcing in Beaumont once we receive the necessary assurance regarding the appropriate use of NTPF funds. We are working closely with the HSE regional executive office on this matter.' 'The public must have full confidence and trust in the insourcing process. We are working alongside the Department of Health and HSE to increase governance and oversight across our insourcing work with public hospitals.' The Irish Times reported last month that the catalyst for the suspension of funding for insourcing initiatives was a letter sent by consultants in one specialty to the chairwoman of Beaumont. The letter maintained the hospital had billed the NTPF for about 1,400 patients over a number of years who had actually been seen at regular public clinics. On Wednesday, Fiona Brady, chief executive of the NTPF, told the Oireachtas Joint Committee on Health that the letter had been written by rheumatologists at Beaumont Hospital. She said the issue had emerged after she noticed in January that Beaumont Hospital had not applied for insourcing funding. It had received about €8 million the previous year. Ms Brady said she had arranged a meeting with her counterpart at Beaumont at which she was shown a copy of the letter sent by the rheumatologists. She said subsequently a review of invoices submitted over a one-year period had been carried out. 'The NTPF had been billed as if it was additionality,' Ms Brady told the committee. [ HSE chief tells Oireachtas group that 'we took our eye off the ball' Opens in new window ] The Public Accounts Committee is also expected on Thursday to question senior management at Children's Health Ireland (CHI), which runs paediatric hospitals in Dublin. Questioning is expected over an unpublished and highly controversial internal report from 2022 which questioned whether special weekend clinics funded by the NTPF in one specialty had been needed. The NTPF suspended funding for insourcing initiatives at CHI for a period in May and early June after details of the 2022 report were leaked. The funding was later restored.
Irish Times
02-07-2025
- Health
- Irish Times
HSE chief tells Oireachtas group that ‘we took our eye off the ball'
'We took our eye off the ball', the head of the HSE Bernard Gloster acknowledged as he sought to explain how the practice known as third-party insourcing had expanded into a multimillion euro industry living inside the public hospital system. A report he had drawn up for Minister for Health Jennifer Carroll MacNeill revealed that in 27 months to the end of March this year, close to €100 million had been paid out on engaging external companies that use HSE-owned facilities and equipment after normal working hours – in many cases employing existing health service staff – to reduce public waiting lists. The report reveals 83 serving or former health staff are acting as directors in 148 companies providing what are known as insourcing and outsourcing – another system which involves buying care in outside private facilities – arrangements to reduce waiting lists. It says 23 of these company directors are employed by the HSE. READ MORE Gloster told the Oireachtas Joint Committee on Health that over two decades insourcing arrangements had grown from 'a small localised thing' to a level where the health system was now overly dependent on it. 'People saw opportunities, entrepreneurially,' he said, although he stressed there was nothing unlawful about being a company director. He defined insourcing as the practice of engaging external companies or third-party providers to deliver services, often outside of normal working hours, using HSE-owned facilities and equipment. 'In many cases, these providers may employ or subcontract staff who are already directly employed by the HSE, effectively re-engaging internal staff through a separate commercial arrangement, typically at premium rates.' The availability of such premium payments for working for insourcing companies, the HSE chief acknowledged, also made regular overtime less attractive. Gloster told Fianna Fáil TD Martin Daly that the focus of hospitals in embracing insourcing had been a rush to do the right thing and reduce waiting lists. However, he argued that the effective governance of insourcing arrangements became 'quite questionable'. Over recent weeks, there have been significant controversies surrounding insourcing arrangements at Children's Health Ireland, Beaumont Hospital and – the public was told for the first time on Wednesday – at Naas General Hospital . Internal auditors have been sent into Naas to look at concerns over the use of National Treatment Purchase Fund financing. Gloster concluded, following his analysis of the scale of insourcing, that it was now time to wind down the whole process. He has recommended to the Minister that insourcing should end by June 30th, 2026. It cannot be shelved immediately as this would leave patients relying on such services in the lurch. But in the meantime, new controls and safeguards will be introduced. Gloster's plan is for the regular health service to carry out the work previously carried out by insourcing, using new, more flexible rosters now agreed with hospital consultants and other healthcare staff. But he warned that if a gap remains, it will have to be filled by sending more public patients to be treated in private hospitals. Ultimately, Carroll MacNeill is expected to decide on whether to call a halt to the insourcing train – which would appear to generate close to €50 million per year for those on board – by the end of July. However, the investigations into allegations of concern at Children's Health Ireland , Beaumont and now Naas arising from insourcing arrangements will likely run a lot longer.
Irish Times
02-07-2025
- Business
- Irish Times
Health committee live: €100m spent on firms that use HSE facilities and staff after hours to cut waiting lists
HSE chief executive Bernard Gloster is expected to say there is now an 'over reliance' on insourcing to supplement core activity.
