Proposal to establish a wholly owned subsidiary company for the provision of estates, facilities, procurement and clinical engineering services.
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1 Proposal to establish a wholly owned subsidiary company for the provision of estates, facilities, procurement and clinical engineering services. Public Board 29 March 2018 Presented for: Presented by: Author Review and Approval of Recommendations Simon Neville, Director of Strategy and Planning James Goodyear, Associate Director of Policy and Partnerships Robert Hakin, Associate Director Corporate Planning and Business Development List of meeting dates Trust Goals The best for patient safety, quality and experience The best place to work A centre for excellence for research, education and innovation Seamless integrated care across organisational boundaries Financial sustainability Key points The Board is asked to: Note progress in developing proposals to establish a WOS company for the provision of estates, facilities, procurement and clinical engineering services Consider the staff and Trade Union feedback received to date Note the outstanding issues requiring further consideration Defer the decision to establish a WOS and approve an extension of the period of engagement in order to allow the fullest possible engagement with Leeds Teaching s staff and representatives, including the review of alternative models Approve the continued development of the current proposal Note the financial impact of the consequence of any delays or failure to establish a WOS 1
2 1. Introduction Leeds Teaching s is exploring the formation of a wholly owned subsidiary (WOS) company for the delivery of estates, facilities, procurement and some clinical engineering services. 2. Background The Trust has been working for some time with partner Trusts in West Yorkshire to explore ways of delivering clinical and non-clinical support services more effectively, Together with the other five Trusts in West Yorkshire and Harrogate they have formed the West Yorkshire Association of Acute Trusts, (WYAAT). More recently, one workstream is exploring maximising efficiencies in non-clinical support services which has resulted in reviewing alternative models for the provision of these services. In the light of this, the Trust has commenced a project to explore the options and benefits of establishing a WOS. This has followed a number of other NHS Trusts in West Yorkshire and elsewhere in the NHS who are already employing a similar model or in the process of developing their plans. The aim of this development would be to establish a WOS company which would be owned in full by Leeds Teaching s and deliver an operated healthcare facility to the Trust. The company would be, accountable to the Trust Board and would encompass the management and delivery of: Estates & facilities (E&F) Procurement and supply chain Clinical engineering New capital developments To further explore this development the Trust has commenced engagement with staff. This ongoing engagement has raised a number of questions which will be presented to the Board at the meeting in public on 29 March The paper highlights the aims and scope of the case, the progress of engagement and key feedback from staff whilst finally providing the Board with a number of recommendations for the next steps. 3. Project details During research and initial scoping of the project the Trust developed a number of key drivers for change, including: generating efficiencies and new income to support the Trust s financial sustainability plan and to increase investment in patient services, medical equipment and the estate providing efficient and effective E&F, clinical engineering and procurement and supply chain services which meet the needs of patients and clinical staff developing a commercial approach to income generation and hence resilience releasing as much clinical time to front line staff to allow them to have more patient facing time through a new flexible procurement service developing the workforce and creating an innovative environment where staff feel they can bring ideas to the Board creating a model whereby there is greater flexibility and opportunity to respond and adapt to changes in the market. Once these drivers for change were established a number of options were shortlisted which could achieve some or all of the benefits. Whilst alternative solutions are still being debated it was important for the Trust to agree the current preferred model at this time. This allowed 2
3 the development of a business case and the ability to commence staff engagement. These options were: Do Nothing/ Minimum: services continue on current basis with no or minimal change to working arrangements Leeds WOS: LTHT transfers its services into a WOS and no WYAAT level collaborative approach is followed Leeds WOS and WYAAT company: Each Trust in WYAAT creates its own WOS and a WYAAT level company is also created for specialist services Lead Provider Model: WYAAT organisations transfer their services to one of the current WYAAT organisations Leeds Out-source: LTHT tenders its services as a single package WYAAT Out-source: WYAAT organisations tender their services as a single package. Through an economic and commercial benefits appraisal process, which ranked each option against a number of criteria, the Trust was able to demonstrate that a Leeds WOS delivered the greatest benefit against the aims of the case. Given this proposed shortlisted option impacted on a number of staff it was important to agree key commitments to affected staff. These have been discussed during the engagement process and include: The same NHS terms and conditions, even if promoted or role changes Pay will not be reduced The ability to keep NHS pension Staff would retain NHS length of service Staff would be working to same job description Staff would be working with same teams and managers The same policies and procedures around sickness, holidays etc. Staff would still receive NHS benefits such as salary sacrifice for lease car scheme, parking, gym, childcare vouchers etc. The same or improved training and development opportunities Working towards Living Wage commitment for our lower paid staff 4. Summary benefits case A summary of the benefits of the WOS are listed below: Financial sustainability of the Trust and improved patient care The financial case would deliver approximately 20% of our waste reduction program for 2018/19 and a similar percentage in following years; the inability to deliver this would place a significant risk on the Trust s financial position and the ability to access sustainability and transformation funding. Ability to reinvest into patient care, the estate and new hospital developments at LGI and Leeds Children s (Building the Leeds Way) Ability to bring back outsourced services into the WOS LTHT estates & facilities already deliver over 4m non-nhs income we know there are more opportunities out there that we can build on Professionalise service and increase quality High performing services that benchmark well this is an opportunity to grow further in a more flexible environment 3
4 Clarity of organisational purpose no longer backroom Cinderella or support services realise potential to be a specialist company Sole focus on specialist service areas innovative approaches using the industry best practice More procurement and supply chain flexibilities focus on local economy Recruitment, retention and development of staff 2m investment into staff development Clear career structures and more focused development opportunities Increasing commercial skills Ability to create flexible employment packages to attract the right specialist staff in a competitive market Ability to develop highly specialised roles 5. Summary of engagement Engagement with staff from the affected groups, Trade Union representatives, and the wider organisation is a key part of the approach to develop the proposal. Staff engagement began on Friday 9 March 2018 with a letter to all affected staff from the Chief Executive outlining the proposals and encouraging them to attend the staff briefings that had been arranged. In addition to staff briefings, we also provided dedicated information on the Trust intranet and an on-going updated Q&A process through a dedicated address. The current staff briefings are outlined below and will continue until 27 March. The meetings were led by the Chief Executive and were attended by members of the Board, including the Non-Executive Directors. In light of this, a summary presentation of the themes arising from these meetings will be made by the Chief Executive in the Board meeting in public on 29 March At the time of writing this paper, we had completed five out of the 11 meetings which had been attended by around 450 members of staff. 10:30-11:30 Thursday 15 March 10:00-11:00 Wednesday 21 March 13:00-14:00 Wednesday 21 March 08:30-09:30 Thursday 22 March 14:00-15:00 Thursday 22 March 16:00-17:00 Thursday 22 March 18:30-19:30 Friday 23 March 10:30-11:30 Saturday 24 March 14:00-15:00 Saturday 24 March 10:30-11:30 Monday 26 March 15:00-16:00 Tuesday 27 March Open staff briefing Briefing for Clinical Engineering staff Briefing for Procurement and supply Chain staff Chapel Allerton Wharfedale 4
5 These meetings have been complemented by local managers providing smaller briefings and discussion opportunities for their teams. In addition on 21 March 2018 members of the Trust Board met with Trade Union representatives to discuss the proposal and issues arising from it. Information about the proposals was shared with a number of key stakeholders including local MPs, local authority and Healthwatch. The views of staff and Trade Unions are an important consideration for the Trust Board and a brief summary of the key issues raised to date is included here. Concern about not being employed by the NHS and fulfilling their public sector ethos and commitment Concern about the need for staff transfer and this negatively impacting on morale and goodwill Concern that the Trust can t guarantee the commitments to staff around T&Cs and that these could change at any point after the transfer in the event of economic, technical or organisational reason Concern over differential terms and conditions between transferring staff and new starters in the wholly owned subsidiary Concern that the wholly owned subsidiary company could be sold at some point in the future Concern that the proposals may lead to some staff with key knowledge and skills resigning/retiring Concern about legislative changes in the future which would impact on any financial benefits the change would bring Concern about what happens if the company fails Concern that the time allowed for engagement has been relatively short and needing more detail In the face-to-face briefings with staff and Q&As, the benefits of the proposals were explained further. These included: The ability to focus solely on those services provided by the company The ability to attract additional commercial income to reinvest in patient care and the Trust estate The ability to attract specialist staff by varying terms and conditions The need to do something different to address financial challenges rather than continue to make savings, part of our long term financial sustainability The ability to bring back previously outsourced contracts and support local jobs A full list of questions and answers that we have developed to respond to questions raised by staff can be found at Appendix 1. The Board is asked to note that engagement with staff and Trade Unions on the proposal has been helpful and informative. It is recommended that engagement continues so that staff and the Board can be assured that all options have been fully evaluated prior to any Board decision. 6. Issues requiring further exploration Engagement with staff and Trade Unions has identified a number of issues which require further detailed work up and exploration prior to review by the Board. These are firstly the inclusion of Clinical Engineering services within the scope of the proposal and secondly the 5
6 potential for alternative service delivery models which will deliver similar benefits to the current proposal whilst avoiding or minimising the need for transfer of staff. 6.1 Clinical Engineering Leeds Teaching s has a large and well regarded Medical Physics and Engineering (MP&E) function and department with around 230 people, the department is responsible for the commissioning, installation, maintenance and repair of a large range of medical equipment across the Trust. A complicating factor for MP&E is that only Clinical Engineering is included within the initial scope of the proposal to establish a WOS company. Due to the complexity and breadth of the service in comparison with medical equipment services in other Trusts, further analysis is underway to clarify their role in the delivery of an operated healthcare facility model. Once the analysis is completed a recommendation will be made to the Project Board and subsequently the Trust Board for approval. 6.2 Alternative models to a wholly owned subsidiary company During the engagement process a number of other potential alternative models to the WOS have been raised which we would like to explore further before any decision is made Specifically, Trade Union colleagues have asked that the Retention of Employment model is explored, whilst staff feedback has asked that the model employed by Guy s and St Thomas NHS Foundation Trust is evaluated. In both cases it is argued that similar benefits to the current proposal can be delivered without the need for transfer of so many staff. 7. Programme It is anticipated that any further period of exploration and engagement may impact adversely on the programme and hence the Trust s financial plan. In addition, should approval by either the Trust or the Secretary of State be declined or delayed for any reason there would be a similar significant financial risk to the Trust due to non-delivery of the financial benefits set out in section 4. The Board is asked to note that alternative savings plans will need to be drawn up and implemented in order to achieve the 2018/19 financial control total. 8. Recommendation The Trust Board is asked to: Note progress in developing proposals to establish a WOS company for the provision of estates, facilities, procurement and clinical engineering services Consider the staff and Trade Union feedback received to date Note the outstanding issues requiring further consideration Defer the decision to establish a WOS and approve an extension of the period of engagement in order to allow the fullest possible engagement with Leeds Teaching s staff and representatives, including the review of alternative models Approve the continued development of the current proposal Note the financial impact of the consequence of any delays or failure to establish a WOS James Goodyear, associate director - policy and partnerships Robert Hakin, associate director - corporate planning and business development 23 March 2018 Supporting information Appendix 1 6
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