HC Deb 11 March 1993 vol 220 cc708-9W
Mr. Wells

To ask the Secretary of State for Health what is her estimate of cumulative savings to the national health service from the contracting-out of support services; and what plans she has to extend contracting-out.

Mrs. Virginia Bottomley

[pursuant to the reply, 16 February 1993, column 160]: The national health service has since its early days been a substantial purchaser of supplies from commercial contractors. Building construction, building maintenance, computer and medical equipment maintenance, for example, have been bought in from external sources and subjected to market testing procedures. Since 1983, the market testing of NHS support services has been extended by the introduction of the management requirement for regular market testing of domestic cleaning, catering and linen and laundry services. More than 20 other support services have also been market tested, resulting in a saving in 1990–91 in excess of £125 million in NHS overhead costs. Market testing in the NHS is being further extended to all areas of support services as set out in the November 1991 White Paper "Competing for Quality".

My right hon. Friend, the Chancellor of the Duchy of Lancaster is today placing in the Library guidance on the implications for market testing of the Transfer of Undertakings (Protection of Employment) Regulations 1981. In some cases where work is awarded to an outside contractor following market testing that may constitute the transfer of an undertaking in the terms of the regulations. If so, the regulations provide that the new employer takes over responsibility for the employment contracts of the employees, who would transfer on their previous terms and condition of service. The guidance sets out circumstances in which the regulations are, and are not, likely to apply, and explains their effect where they do.

This guidance will be equally relevant to the NHS market testing programme and I hope that national health service managers and contractors will find the guidance helpful.

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