A critical review of the implication of outsourcing in the National Health Services (UK): a facilities management perspective

Abstract

Since the creation of the National Health Service (NHS) in 1948, there has been growing pressure for it to operate in a more business like fashion. By 1979 only a small fraction of private firms were doing business with the NHS. Drawing from the experience of the private sector where outsourcing was a success, the NHS was urged to work with the private sector in the provision of non-clinical services.

Thus, to reduce the estimated £900 million that was required to provide non-clinical services, the governments introduced competitive tendering and market testing. The aim was to encourage a public/private sector mix and market competition in the NHS. Despite initial resistance, the NHS has grown today into a major outsourcing market in the UK. The provision of domestic cleaning services alone account for an estimated £188million.

The main aim of this research paper is to investigate the benefits and problems associated with outsourcing in the National Health Service (NHS) in the UK. The paper also examines the different government initiatives that opened the NHS market to the private sector. The findings presented in this paper are primarily based on an in-depth literature review.

The main driving force behind outsourcing in the NHS has been to cut down public spending.Through outsourcing, the NHS aim to provide more efficient, innovative and cost effective nonclinical services. Outsourcing firms have a pool of expertise, knowledge, methodologies and technology upon which the NHS can rely on.

There are a number of problems associated with the outsourcing of non-clinical services in the NHS. Many blame the falling cleaning standards and subsequently the high rate of Hospital Acquired Infections (HAIs) on the outsourcing of domestic cleaning services. The failure of most NHS trust to evaluate the cost of HAIs associated with outsourcing is either under or over estimating the actual benefit of outsourcing. Outsourcing in the NHS has created a two tier workforce whereby, employees in the outsourcing firm experience poor remuneration, and working conditions. In some circumstances, cost reduction has been achieved through redundancies; though at the cost of high quality in-house service provision.

To outsource in the NHS, there must be sufficient evidence to suggest that it will bring value for money. A well drafted service level agreement (SLA) emphasizing performance measurement should be drawn with the vendor.