Ensuring High Quality Public Services Through Workforce Engagement

Ensuring High Quality
Public Services
recognising the role of the workforce in the
future of outsourcing
KINDLY SUPPORTED BY:

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Ensuring High Quality Public Services: Recognising the role of the workforce in the future of outsourcing
ABOUT THE IPA
Acknowledgements
The case studies were researched and written by Hannah
Jameson, IPA research manager. The author would like to
thank the members of the steering group and those from
the case study organisations who generously found time
to provide the information necessary for the study.
Unison and the Centre for Public Service Partnerships
would wish to thank Serco and Compass for sponsoring
the study; the IPA for undertaking the research and
producing the report; and to those who contributed to the
case studies . Special thanks are due to Hannah Jameson.
The IPA provides research and consultancy to help
organisations develop new ways of working, based on
collaboration and trust, that improve the well being of
all employees and their experience of working life, and
lead to more productive outcomes for the organisation.
The IPA publishes research to help inform public and
policy debates on the workplace and working lives.
The IPA is a not-for-profit organisation and registered
charity.
IPA
42 Colebrooke Row
London
N1 8AF
www.ipa-involve.com.
Publication date: 11th
October 2011

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This report looks at 6 case studies exploring a range of
outsourcing practice. At a time of severe cost pressure the
findings of this report are a timely reminder that a race to
the bottom does not benefit anyone, and that outsourcing
can produce higher quality public services when there is
good workforce practice and the workforce is fully
engaged in procurement, service design and delivery.
It is clear that reputable employers, employees and their
representatives are all determined to find ways in which
quality of services can be maintained in the coming
months and years. This report, we believe, goes some way
to demonstrate the dangers and advantages involved in
outsourcing.
The development of outsourcing
2010 marks the thirty year anniversary of the start of
substantial public sector outsourcing in the UK. From a
limited practice in construction, maintenance and highways
it has grown to an industry absorbing a fifth of total UK
government expenditure, employing hundreds of
thousands of staff across the country, in almost every public
service.
There are now few local authorities, health trusts,
government departments or agencies which do not
procure some of their services externally. government
policy has long promoted public service delivery through
the third sector, social enterprises, co-operatives, private
sector businesses as well as commercially driven public
sector bodies. All the major political parties advocate this
policy to some degree. The period of the New Labour
government witnessed increased outsourcing, and an
extension of its application into new areas in criminal
justice, health and education. The new coalition
government has already made clear its commitment to
greater outsourcing of, and a diversity of supply of, public
services.
The trend to outsourced provision has accelerated in recent
years as public bodies responded to new financial
pressures and following the government’s Comprehensive
Spending Review announcement on October 2010 there is
likely to be a further substantial increase as public sector
agencies look to private and third sector providers to help
deliver the major cost savings demanded by Review.
Whilst in many contracts outsourcing has delivered service
transformation and efficiencies, experience has shown that
the act of outsourcing itself does not always or necessarily
deliver these ends. Bad practice such as poorly structured
deals, badly defined specifications, the pursuit of the lowest
price, weak client/contractor relationships poor workforce
practices – including poor terms and conditions, and
authoritarian management and ineffective staff
consultation or communication has often undermined
potential gains.
The replacement of the compulsory competitive tendering
regime by a best value approach in 1997 was designed to
recognise that a simple lowest cost approach undermined
the potential for positive service transformation as well as
reducing the pay, conditions and engagement of staff.
The challenge now for government and other public sector
procurers, third sector and private sector contractors and
other external providers, the workforce and the public alike
is to ensure that cost pressures do not undermine the
quality of service and that positive service transformation
remains at the heart of any outsourcing.
There is already anecdotal evidence that some public
bodies are:
• Unilaterally seeking to change contracts and pay less for
specified services especially where the provider is a third
or community sector organisation
• Drawing up procurement strategies which would award
short term contracts based solely on the lowest price
rather than service quality or defined outcomes
• Looking to encourage contractors to consider how they
reduce the terms and conditions for the staff employed to
deliver public services, for example by circumventing the
legal requirement of the Transfer of Undertakings
regulations (TUPE) or avoiding pensions responsibilities
While this may seem superficially attractive in the short
term to organisations faced with major reductions in
income, the consequences of a move away from
contracting based on positive service outcomes to
contracting based simply on price would be harmful to all
the stakeholders concerned. It would damage:
• Public service procurers, because in a democracy the
blame for any decline in service quality will ultimately rest
at their door;
• Contractors who have invested in good employment
practices would face a damaging reputational risk from
a race to the bottom;
• The workforce, who would be de-motivated and
disengaged;
• And above all the customers and consumers of services –
the public - faced with poorer quality services, at a time
when expectations of and demands on services are at
their highest.
To avert these dangers, we believe it is timely to reflect on
some of the lessons learned from the experience of
outsourcing.
Those delivering the best public services in Britain today
know that having a fairly treated, well-managed and
engaged workforce is fundamental to achieving
improvements in service quality and how vital involving
and supporting staff through change is to achieving service
transformation. It is important that public service
commissioners continue to place this at the centre of the
procurement process if we are to deliver better quality as
well as better value for money. And it is important that as
the government reviews existing regulations and guidance
it takes this understanding into account.
Project rationale
This project arose out of a shared concern between private,
public and third sector public services organisations, that
as we move into this new economic and political era we
build on the knowledge and best practice that has been
accumulated. An initial seminar brought together many
stakeholders from the public, third and business sector
as well as trade unions, policy researchers and
commentators; a steering group of project sponsors

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then commissioned the Involvement and Participation
Association (IPA) to produce a number of case studies to
look in depth at the relationships between good workforce
practice, the involvement and engagement of staff, and
high quality public service outcomes.
The principles
The central finding of the case studies is the strong
relationship between good employment relations and
workforce practices, and high quality public service
delivery. Those providers that treated their workforce fairly,
and engaged and involved them and their representatives,
were often better able to implement change effectively,
meeting service user and purchaser needs. Good
relationships with unions helped build trust between
employer and employees, which was particularly important
at the point at which new employers took over a contract.
These case studies also show workforce and trade union
representatives actively involved in change and
modernisation, creating more responsive and more
efficient services. At the same time several case studies also
show the difficulties of maintaining high quality public
services when workforce conditions are undermined,
relationships with the workforce and their representatives
break down, and a two-tier workforce emerges. We hope
these case studies will be read by all interested parties.
The project sponsors suggest that the lessons from these
case studies and many other similar studies over the years
could form the basis for a set of best practice principles
against which procurement procedures could be designed
and outsourcing delivered in today’s public service market.
At the heart of these principles is an acknowledgement of
the importance of the workforce in achieving high quality
public services, and the value that trade unions can bring,
particularly in managing change as well as the need for
the public sector and employers to respond flexibly to
increasing public expectations at the same time as public
service budgets decline. Indeed many of these principles
apply to directly public sector managed services and those
provided in other sectors. The principles include the
following:
• Public value and public service quality will only be
maximised when service providers and employees are
engaged appropriately in strategic commissioning and
fully focussed on the needs of service users
• Staff need to be empowered, supported and trained as
key contributors in service planning, design and
monitoring services; well supported through change; and
fully engaged in service delivery
• Employment standards and practices should reflect the
best across sectors and markets
• Staff and their representatives should be involved in all
major decisions including procurement and
commissioning decisions about who will provide services
• Staff and trade unions should be consulted and involved
throughout the commissioning and procurement
processes and should work with providers,
commissioners and procurers to use their experience to
ensure high quality public services
• Public sector procurers should continue to place good
workforce management practices at the heart of
contracting
• All providers should fully engage with staff and their
representatives in developing, managing and delivering
services.
We look forward to discussing these principles with all the
stakeholders, as well as government, at the earliest
opportunity

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CASE STUDY 1
Serco and Norfolk and Norwich University
Hospitals NHS Foundation Trust
Background
NNUH had outsourced facilities management services
since 1995 and over the following six years a series of
companies were awarded the contract. The relatively high
turnover of contractors reflected some of the difficulties
they had in delivering the service. Union officers and trust
employees reported a lack of experience in operating in
health services, differing management cultures, resistance
from staff and poor relations with the workforce as
reasons why the quality of the service was often poor, and
ultimately contracts failed during this period. In the first 9
months following the initial outsourcing, 50 per cent of
the facilities management staff had left the organisation.
In 1999 Octagon and the Trust put the contract out to
tender to find a new company to provide the soft facilities
management services at the new hospital site once it had
opened. The hospital was the first PFI hospital built and
was a high prestige project.
Octagon and the Trust involved the unions throughout the
procurement and tendering process, for example, inviting
the companies bidding for the contract to present their
proposals to staff representatives. UNISON branch officer
for contractors, Terry Davies, was also invited to sit on the
panel with the Trust to interview the prospective
contractors. Davies notes that Serco’s commitment to
positive relations with the union was reassuring, but their
clear vision for how the company could not just deliver
the service, but play a role in improving the health of the
local community, encouraged Davies to believe that there
could be a values fit between the employees and
contractor. The staff and their representatives were given
a third opportunity to be involved in shaping the contract
when they were asked to input into the service level
specifications.
Once Serco had been awarded the contract, they
approached the unions, including AEEU, UCATT, GMB
and UNISON, to discuss establishing a recognition
agreement. The focus of this agreement from the unions’
perspective was the harmonisation of the 27 different
terms and conditions that were in place over a two year
period. Serco agreed to move towards harmonised terms
and conditions as soon as was affordable and to honour
the terms and conditions of the transferring staff. They
also recognised the value of union membership for good
employment relations and agreed to promote
membership of the unions through distributing literature
to all new employees. The unions agreed to work for the
success of the company and ensure that there was
minimal disruption to the service. The recognition
agreement was signed in 2001. At the same time the
company approached the UNISON branch officer, Terry
Davies, to take on the full time union convenor role,
funded by Serco. He agreed on the condition that his
contract acknowledged his responsibility to the workforce
came before his responsibilities to the company.
This recognition agreement and the approach to working
that it represents is seen as an exemplar in the field. The
union convenor has worked with Serco at other sites to
help develop their employment relations in a similar
direction.
Approximately 550 people were transferred to Serco at
the beginning of the contract, with a variety of terms and
conditions. The union and company had agreed to work
towards the harmonisation of the terms and conditions
over a three year period, but by 2004 Agenda for
Change had been implemented for all staff directly
employed by the NHS changing the focus of negotiations.
The contract workforce wanted equal pay to directly
employed NHS staff and the union entered discussions
with the company. Serco argued that these changes
would have been unaffordable at the time, and were
unwilling to enter into an agreement while talks were
taking place between the government, CBI and BSA on
possible legal changes affecting the pay of the contract
workforce. The UNISON branch balloted members on
industrial action in 2005. The two parties went to ACAS,
negotiated and went through binding arbitration. Shortly
after, the Department of Health, the major contractors
and the trade unions issued a joint statement committing
them to address the pay disparity between directly and
indirectly employed staff working in the NHS, by ensuring
that the contractors would provide terms and conditions
that were no less favourable than those in the national
agreement, known as Agenda for Change. The
agreement expected the costs of the increase in hourly
pay, holiday and London weighting to be shared between
the NHS and contractor.
Shortly after this Serco and the unions agreed a phased
introduction of the two-tier workforce agreement, with
staff gaining Agenda for Change rates of hourly pay in
the first year, sick pay in the second year, and antisocial
hours enhancements in the third year. Many staff also
received back pay.
The union has now been asked by Serco to take part in
joint training for Serco managers on Agenda for Change.
Serco has operated the contract to deliver soft facilities management services at Norfolk and Norwich University Hospitals
NHS Foundation Trust (NNUH) since 2001. The Trust is based within the very first PFI hospital which is owned by Octagon
Healthcare which opened in the same year. Serco is a subcontractor of Octagon.
The contract is market tested every five years. The first market test took place in 2006 and the contract was awarded to
Serco. The same procedure was repeated in 2010 and Serco was awarded the contract for the third time.
The original contract was for soft facilities management, which has been expanded over the life of the contract to include
hard facilities management and retail. The services now provided by Serco include: Maintenance, grounds maintenance,
domestic and portering, catering, car parking, security, laundry, waste disposal and retail. The workforce has also
expanded, and approximately 650 people now work on the contract.

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CASE STUDY 1 CONTINUED
Performance
During the life of the contract Serco has consistently met its
contractual obligations. Moreover, surveys carried out by
Serco show that customer satisfaction and advocacy at
NNUH is among the highest of their contracts.
Performance was initially monitored through a site services
team which carried out regular inspections with the power
to withhold payments to the contractor if standards were
not met. This approach was found to be ineffective,
encouraging a focus on identifying errors rather than
creating more effective ways of delivering the service. The
Trust, unions and contractor therefore developed an
alternative approach based on self-monitoring.
The contractor also collects data on various aspects of
workforce performance, including retention, sickness
absence and an employee engagement survey. From 2007
the data shows a 2.5 per cent decrease in the sickness
absence rate to 4.94 per cent. This compares with a
national average of 6.9 per cent at the end of 2009 for
support staff in the NHS.1
Over the same period voluntary
resignation rates have decreased 9 per cent to 13 per cent,
against approximately a 20 per cent industry average.
Workforce representatives interviewed for this study suggest
that the impact of receiving Agenda for Change rates of
pay had a significant impact on retention, placing the
company’s rates of pay well above the average in the local
economy for equivalent jobs. The employee engagement
survey is relatively new and has yet to build up enough
data to allow for comparisons, but it shows particularly
high scores on the employer’s commitment to health and
safety, employees’ understanding of their job and the
business and their belief in the quality of the service they
provide.
Analysis
Serco has recently been awarded the contract again,
without it going out to tender. Although they recognised the
challenges, those interviewed for this study all viewed the
contract as a broad success. Several factors were seen as
particularly important in ensuring the quality of the
services.
Firstly, all parties recognised the importance of a
partnership approach in ensuring the success of the
contract. Partnership was seen by several interviewees as
the product of the gradual evolution of the
contractor/client/workforce relationship since contracting-
out began at the NNUH, and the relationship most likely to
deliver good services for patients. A partnership approach
relied more on the quality of the relationships built
between individuals from each party than the specifics of
the contract document.
This was seen as particularly necessary given the difficulty
of anticipating at the beginning of a contract all that the
Trust would require from the service over the life of the
contract. In reality, innovation, regulation and changing
practice in health services mean that facilities management
services have to adapt too. Therefore, Serco and the Trust
emphasise the value of their relationship, good
communication and involvement, which enables
improvement and adaptation to take place during the term
of the contract.
According to the assistant director of nursing a good
relationship between the Trust, contractor and workforce
ensures that problems are resolved before they reach a
critical level. A culture of involvement is made even more
necessary by the PFI structure, which introduces another
partner into the relationship. Serco, as a subcontractor of
Octagon, does not contractually have a direct relationship
with the Trust, except through Octagon. However,
regardless of the formal relationship, all parties see close
involvement as beneficial to the quality of the service.
Structures have been created to support this approach. For
example, a facilities management group which includes
representatives from Octagon, Serco, the Trust and unions
is in place to resolve issues that are escalated up from the
front line. Informal involvement is also widespread, and
the Trust encourages Serco as well as the unions to
contribute to a variety of committees and working groups.
The assistant director of nursing was asked by Octagon to
contribute to the market test for the facilities management
contract.
With considerable experience in the health market, Serco
recognise that their commercial success is dependent on
the quality of the service provided by their workforce. In a
market as competitive as health and where information is
readily shared between Trusts, service providers rely on
their reputation to grow their business. According to David
Fox, Serco director of HR, integrated services, the
company’s research shows strong correlations between
client satisfaction and workforce satisfaction. It is assumed
that satisfied staff are engaged and perform better,
delivering a better service and acting as advocates for the
employer. The company therefore aim to pay their
employees market rates, rather than the lowest rates, build
relationships with the workforce representatives and
encourage employee engagement.
1
The Information Centre for Health and Social Care, Sickness absence rates in the NHS: October-December 2009 experimental statistics, (April 2010)

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CASE STUDY 2
Veolia Waste Services at Westminster City Council
Background
The contract for waste, recycling and street cleaning at
Westminster had been contracted-out for some years.
This was one of the first services to be contracted-out
under CCT, and by 1996 was being operated by MRS.
Despite the contract being having been operated by
several different companies up to that point, the
workforce still retained a core of employees who had
been transferred over from the local authority when the
original contracting-out took place.
The previous employer had not recognised a union, but
Veolia agreed an informal recognition agreement within
a year. This recognition agreement was formalised in
2009 when UNISON and the company signed a national
recognition agreement that also included a specific
recognition agreement for Westminster. The agreement
states the company’s preference for dealing with a single
union, and for employees to become and remain
members of that union. According to the union convenor,
Colin Staplehurst, the company and managers were
familiar with working with unions which helped in
establishing good working relationships early on.
All those interviewed for this study emphasised the value
of the informal approach to relations with the union
favoured by company managers, showing flexibility on
time off and training time for representatives. Scott
Edgell, contract manager for Veolia, acknowledged the
value of well trained representatives and confirmed the
company’s willingness to allow time off for training in
order to achieve that. The convenor is given one day per
week for union duties, and other representatives are
given time off as requested.
From the company’s perspective, the union plays an
important role in improving health and safety across the
workforce and helping to manage change. The long
contract periods make it inevitable that the company will
have to respond to changes in service demand and
specification during the contract, requiring some
measure of flexibility from the workforce. For example,
carbon emissions and environmental impact have grown
considerably as policy priorities for Westminster Council,
which has led to the introduction of new technology and
different vehicle rounds by Veolia.
To facilitate good relations and joint working between
the two parties the company established a monthly forum
which brought together a union full time officer, union
convenor and health and safety representatives with the
contract manager, operational manager, and health and
safety manager to address a range of operational and
strategic issues, for example contract changes, changes
to working practices and size of workforce. The forum
also provides an opportunity to address issues that arise
in the course of the day to day operations. However,
urgent problems were discussed by telephone in between
meetings.
Other means of involvement included the Joint
Negotiating and Consultative Committee and the
London wide and national Veolia trade union forum
which brings together all of the unions representing the
Veolia workforce. Several attempts had been made to
establish depot level forums. The union had been keen
to find ways of involving street cleaners, who tended to
be less unionised and are largely made up of migrant
labour. However, high rates of turnover and differing
cultural attitudes to unions and workforce participation
made this difficult.
The union had not been involved in the drafting process
for the recent bid, nor had the Westminster Council
branch been involved in the tendering process. The full
time UNISON officer, Laura Butterfield, acknowledged
that this would require further skills development on the
part of lay representatives. UNISON is now rolling out
training on commissioning and procurement. The
company admits the highly competitive field in which
they operate makes sharing information during the
bidding process difficult.
Over the course of the contract the union has focused on
harmonising the terms and conditions of the workforce.
A core of the workforce remain on TUPE contracts and
terms and conditions, while new starters were employed
on Veolia contracts, and a number of existing employees
were employed on contracts in place from previous
contract operators. This meant that there were
discrepancies in various terms and conditions including
sick pay and hourly pay.
The demographic composition of the workforce has
changed significantly over the last fifteen years which has
created a greater variety of preferred working patterns.
The pay structure had previously been based on an
hourly rate and an attendance bonus designed to
encourage employees to accept less popular shifts. With
a more diverse workforce, this was no longer necessary.
The union and company therefore began to work
towards designing and implementing a new pay structure
which better reflected the new working environment. The
parties agreed a two year deal whereby attendance
bonuses would be abolished, and staff would receive a
4.5 per cent pay increase. These changes took place as
part of the process leading up to the new contract.
Progress was made on harmonising terms and conditions
including equalising entitlements to 6 weeks sick leave
on full pay. By September 2010 the workforce will be on
broadly similar contracts.
The strong working relationship between UNISON and
the company meant that the UNISON full time officer, at
Veolia Environmental Services has operated the waste, recycling and street cleaning contract at City of Westminster
Council since 1996, serving over 250,000 residents and 221 miles of streets. The contract was awarded again to Veolia
in 2010 for a 7 year period, with the option to extend for a full 14 years. The contract is worth £518 million, or £37
million per year.
The contract provides street cleaning, refuse collection, recycling and auxiliary services, including park maintenance,
across the borough.
Approximately 800 people are employed by Veolia on this contract.

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CASE STUDY 2 CONTINUED
the request of members within Veolia, was prepared to
write a letter on their behalf to Westminster council in
support of Veolia’s recent bid for the new contract in
2010.
Performance
Veolia was awarded the contract from 2010, indicating
a certain level of satisfaction on the part of Westminster
Council. Data gathered over the period 2008-2010
shows an average of level of 32.2 missed refuse
collections per 100,000, and 20.2 missed recycling
collections per 100,000. Customer complaints for refuse
and street cleansing have fallen over the period;
complaints for recycling have shown a modest increase.
Employee absenteeism per annum averages 13.45 days
over period, although there are signs that this is
decreasing in 2010. Annual employee turnover has
fallen dramatically; from 34.03 per cent in 2008, to
12.71 so far in 2010. Health and safety has also
improved, with the total number of accidents falling by
9 per cent in 2009, and a further 12 per cent in the first
six months of 2010.
Analysis
Veolia has been awarded the new contract from
September 2010 for seven years, with the option to
extend for a further seven years. The constructive
relationships between the union and company have
helped to manage change effectively, introducing new
technology and working practices, new working patterns,
contracts and pay structures. These changes have had an
impact on the ability of the company to meet the
changing priorities of Westminster Council including
lower carbon emissions, fewer missed collections, and
greater efficiency leading to lower overall costs.
The company’s experience of working in partnership with
unions meant that even before a formal recognition
agreement was signed, the company accepted the role of
the union in representing the workforce, allowed them
time to fulfil their duties and created structures through
which to involve them. The company sees the value of
well trained representatives both in improving health and
safety and addressing the strategic and day to day issues
facing the company.
The effective relationship has brought other benefits to
the workforce including English for Speakers of Other
Languages training which was arranged by the union
with the cooperation of the employer and offered to
employees. Gradual harmonisation and the move
towards one contract has removed divisions in the
workforce, and the new pay structure means that
employees receive more predictable pay, for example,
removing the attendance bonus has meant that
employees no longer lose pay when on annual leave.

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CASE STUDY 3
Dimensions Learning Disability Services in Cardiff
Background
Dimensions had been looking to gain a presence in Wales
for some time, and the reorganisation of services in Cardiff
presented an opportunity.
Four different private and third sector organisations
previously ran the services in the area of Cardiff awarded
to Dimensions in 2007. These legacy organisations
differed in size and their workforces varied between 9 and
77 employees at the time of transfer. These service
providers had delivered services in Cardiff for a
considerable amount of time, and were well established in
the region.
For many of the staff, Dimensions was unknown as an
employer, and the merger of several different
organisations represented a considerable change. The
priority for both Dimensions and the existing workforce
was to ensure that the transfer was as seamless as possible
and that continuity was maintained for the clients and their
families. Therefore establishing early communications with
the workforce was important to reassure them and inform
them of Dimensions’ intentions.
Some of the previous employers were somewhat reluctant
for Dimensions to begin making contact and
communicating with the transferring workforce before the
beginning of the new contract, but Dimensions organised a
series of open days off site for the workforce to give staff the
opportunity to find out more about the organisation and ask
questions. Staff were also offered one-on-one consultations
to address any concerns they had, and staff from other
regions who had transferred to Dimensions spoke to the
new Dimensions employees. Union officers and lay officials
were invited to the open days and given the opportunity to
attend the Dimensions joint consultative committee before
the contract began. Open days were also organised for
clients and their families; for many families, this was the first
opportunity they had had to meet one another.
Dimensions already had a recognition agreement with
UNISON, and once the contract had been awarded, the
national officer helped to establish relations with other
officers in the region. For Executive Director of People and
Organisation, Andy Donelan, Dimensions and UNISON
had forged a relationship based on a mutual interest in
professionalising and improving standards in adult social
care. For a large organisation spread over a wide
geographical area, the union provides another means of
communicating, engaging and reassuring the workforce.
According to Donelan, the fact that UNISON had a
presence in all the legacy organisations provided a
commonality among the new workforce and helped
Dimensions as they sought to bring staff together in the
new organisation.
Under the recognition agreement, a joint negotiating
committee was put in place for bargaining around terms,
conditions, policies and other employment issues along
with national joint consultative committee. The service in
Cardiff was the first Dimensions service in Wales and so
Dimensions established a regional consultative group for
Wales, designed to resolve issues locally and also pass
relevant matters onto the JCC.
Staff are employed on approximately 5 different contracts
and their terms and conditions remain the same under
the TUPE arrangement. Some alterations have been
made, for example to sleeping over allowances, where
significant differences existed in the rates paid by the
previous employers. Staff who gain promotion, or who
are employed as managers are placed on Dimensions
contracts. Discipline and grievance and promotion
policies are set by Dimensions.
Shortly after the transfer had taken place, managers
received induction training covering values, policies and
systems.
Analysis
One of the biggest concerns of the workforce during the
transfer was the need to maintain continuity of service for
the clients. Dimensions acknowledged this and sought to
establish communication channels with the workforce early
on to reassure them that any change would be gradual.
The hesitancy of the previous employers to allow
Dimensions contact with the transferring staff made this
process more difficult. Dimensions facilitated contact
between existing Dimensions staff and the transferring
staff, and between union representatives in Dimensions
and the transferring union representatives, to help build
trust. Dimensions employed experienced managers from
the previous services to retain knowledge within the new
organisation.
Although Dimensions aimed to ensure change was
gradual, they did introduce some changes designed to
improve services. For example, shortly after taking over
the contract, Dimensions established a regional advisory
forum. This brought together a number of stakeholders
including the local authority, housing association, clients,
families, support workers and managers to produce an
annual plan. The forum continued to meet every three
months to review progress against the plan.
The relationship with the union at national level helped to
support relationships between regional and local union
officers and representatives and the workforce.
Dimensions is a third sector organisation providing services to support adults with learning disabilities living in group
homes. It delivers services in local authorities throughout England and more recently, Wales.
In 2007 Cardiff undertook a reorganisation of their services for adults with learning disabilities, and put many of these
contracts out to tender. Dimensions was awarded the contract for one of the 6 localities, delivering services to, and
managing, 15 group living homes each with between 2 and 4 residents. The contract was initially for four years, with the
option to extend for a further year. Approximately 95 staff TUPE transferred to Dimensions.

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Case study 4
Barnet and Chase Farm NHS Trust,
Barnet Hospital and Medirest
Background
Medirest had been running the soft FM contract at Chase Farm
for several years when the contract for Barnet hospital went out
to tender. Compass Group UK and Ireland, the parent company
of Medirest, therefore already had established relations with the
unions at the Trust and also with UNISON at a national level,
including a national recognition agreement. UNISON provided
a statement of support to be included in Medirest’s bid.
Before the date of transfer, Medirest ran a number of road
shows to provide staff with information about the new employer,
and a one to one meetings with all staff to answer questions and
discuss their role. The unions were also present at the road
shows. According to the operations director, Scott Teasdale,
these events played an important role in reassuring staff and
addressing any uncertainty.
The union had wanted to implement the Code of Practice for
some time, and by 2008 had began discussions with Medirest
regarding their ambition to see contract staff on terms and
conditions that were equivalent to Agenda for Change.
Discussions then took place between UNISON, the trust and
Medirest. The Trust agreed in principle and negotiations began
on how to implement the changes. By August 2008 the union
balloted their members and the workforce agreed to a three
year phased implementation of the terms and conditions.
Once the agreement was reached, Medirest worked with the
union to send out joint letters to the staff informing them of the
changes. A UNISON representative also worked with the
Medirest HR manager to carry out the job matching. Managers
acknowledged that involving the union in the process helped to
build employees’ trust in the process. As a result, the process
went smoothly and there were few objections. Those appeals
that did arise were heard by a joint panel of Medirest managers
and UNISON representatives.
The first phase of the agreement came into force in April 2010,
when the workforce was moved onto Agenda for Change rates
of pay. The employer notes that this had a significant impact on
retention and increased applications for vacancies, allowing
them greater choice during the selection process. Staff turnover
had previously been between 40-50 per cent per annum, but
following the change it fell to between 10-15 per cent. As well
as reducing recruitment costs, this has also increased the
average length of employment and therefore the skills
development of the workforce. Staff satisfaction has also
improved.
According to Medirest and UNISON the close cooperation
between them during the negotiation and implementation of the
agreement helped to build better relationships between the two,
increasing contact and putting in place relationships that have
since helped to address day to day issues. Monthly meetings
take place between managers and union representatives,
although all parties interviewed for this study report good
informal relations too. UNISON has since established a joint
forum with Medirest to discuss issues across contracts.
As well as working with the union, Medirest has also created an
employee forum in order to better communicate with staff.
Approximately 8 volunteers from across the service attend bi-
monthly meetings to receive information, raise questions and
discuss current issues. Volunteers are given training on
communication skills before they begin attending meetings. The
union representatives have also been invited to attend.
Since taking over the contract Medirest has implemented a
number of changes to the systems, products and processes
used. Alongside this, all staff now receive induction training, and
an online training system has been introduced for mandatory
training modules. An NVQ programme is also in place.
Much of the monitoring of the contract is done through self-
inspection with supervisors carrying out weekly audits, as well as
joint audits with ward managers once per month. The company
reports that they have good relationships with the trust and that
they regularly exceed their targets.
Analysis
Both the company and the union had a joint interest in
implementing the Code of Practice at Barnet hospital, improving
terms and conditions for all staff. They were able to work
together to communicate and gain the support of the staff,
implement changes and manage any issues that arose from the
changes. UNISON local representatives, as well as regional full
time officials, supported the process to completion.
Introducing improved terms and conditions, equivalent to
Agenda for Change, not only directly benefited staff, but it also
helped to strengthen relationships between the union, employer
and trust. Union representatives gained valuable experience of
partnership working and improved communications with their
members. Union membership has also increased. The indirect
benefits of improved terms and conditions, such as higher rates
of retention, have meant that the employer has gained more
from its investment in training and skills, which also impacts on
the service provided to the client.
Medirest has introduced practices, such as the employee forum
and weekly team briefs, which are designed to improve
communication with the workforce. Communication, they
believe, is vital to maintaining the trust and confidence of the
workforce. Involving the union with certain communication, such
as jointly branded letters and union attendance at the road
shows, can also help to build trust with the workforce and
address issues that may otherwise affect performance.
Medirest, an arm of the food and support services company Compass Group UK and Ireland, delivers soft facilities
management (FM) services at Barnet hospital, part of Barnet and Chase Farm NHS Trust. The hospital was built under a
PFI contract by Metier and the soft facilities management services was originally delivered by Ecovert, a subsidiary of
Metier. It is a 500 bed acute hospital.
In April 2007 the soft FM contract was awarded to Medirest. Approximately 300 staff were TUPE transferred over to the
new employer. Medirest delivers portering, catering, car park, security, cleaning and retail services to the hospital. The
contract is due to run for 5 years until 2012.

10
Case study 5
Parkwood Patient Transport Service
in the West Midland
Background
The patient transport service for the north Staffordshire region
had, until 2006, been delivered by the Staffordshire Ambulance
Trust. In 2006 the contract was awarded to Parkwood
Healthcare Ltd, part of Parkwood Holdings Plc, a company
providing a range of support services to the public and private
sector including grounds management, leisure, and PFI
management, as well as health services.
The procurement process was managed by the Healthcare
Purchasing Consortium on behalf of the trusts. The unions did
not have any input at the procurement or tendering stage.
The transfer to the new service provider initially went smoothly.
The TUPE transfer ensured that the terms and conditions of the
transferred staff were protected. However, within five months it
became apparent that the employer was struggling to operate
the contract within budget, and was in fact operating at a loss.
This led to a period of considerable cost cutting.
The company employed a number of new staff, taking the total
headcount to approximately 100. These new staff were
employed on Parkwood contracts with terms and conditions that
differed considerably from the transferred staff. The new staff
had a lower hourly rate of pay, less annual leave, less sick pay
and different working patterns. Transferred staff were entitled to
cost of living increases and annual pay rises in line with the NHS
Agenda For Change terms and conditions of employment.
However, the company refused to pay the cost of living pay rises
to staff so they were withheld.
The recognised union, UNISON, alleged that this amounted to a
two-tier workforce, in breach of the Workforce Code. At the
same time, the pressure to reduce costs was beginning to impact
on the ability of the staff to do their job. Staff reported being
unable to order materials such as antiseptic wipes because
suppliers had not been paid for previous orders. The company
also began using unadjusted vehicles, such as taxis, with
untrained staff to transport patients which employees argued
damaged patient care.
However, efforts to resolve the situation with the employer were
unproductive. The union’s full time officer was at points barred
from entering the sites, and the company attempted to
derecognise the union, although they were unable to do so
locally.
In November 2007 the union balloted its members for industrial
action in a bid to encourage the employer to abolish the two-tier
workforce, and following a positive result, began a period of
working to rule in December. This came to an end on Christmas
Eve when the Trusts, in response to the industrial action,
triggered the Alternative Dispute Resolution Procedure (ADR).
A considerable delay followed, but in January 2009 the
Independent Person appointed to review the case found at stage
1 of the ADR Procedure that the terms and conditions for new
starters did not comply with the Workforce Code, in that they
were not fair and reasonable, and left new starters overall
worse off than transferred employees. Stage 2 of the Procedure
did not manage to produce a new set of terms and conditions
agreeable to all parties that would comply with the Workforce
Code. In June 2009 stage 3 of the Procedure compelled
Parkwood to implement a new set of terms and conditions
proposed by the Trusts, and back pay dating to the point at
which the ADR Procedure began in January 2009.
The contract came to an end on 31st
July 2009, and was
subsequently awarded to West Midlands Ambulance Service.
Parkwood refused to pay the back pay stipulated in the ADR
Procedure and so funds were eventually provided by the
Strategic Health Authority.
After the contract was taken over by West Midlands Ambulance
Service all staff, including the new starters employed on
Parkwood contracts, were moved onto current Agenda for
Change terms and conditions. The employer holds regular
meetings and has good communications with the recognised
unions and the those parties interviewed for this study report that
staff have gained access to new training opportunities, annual
appraisals, and career progression. At the time of publication,
the service was meeting its targets and performing well.
Analysis
Problems arose in this contract as the company struggled to
operate the service within budget. The company claimed that
the contract was under priced and requested more money from
the Trust during the life of the contract to meet the costs of
bringing new starters onto fair and reasonable terms and
conditions. The financial problems also led to the cost cutting
that directly affected staff, their terms and conditions, and their
ability to do the job.
The company’s poor relations with the workforce and their
representatives exacerbated an already difficult situation. The
breakdown of communications led to industrial action as staff
began to believe that there was little alternative.
Although staff claim they did their best to maintain patient care,
they often felt the lack of resources hindered their efforts. Fewer
resources also affected the management’s ability to reward and
invest in the workforce. Training and uniforms, for example,
were limited as the company looked to save money. Pay for both
TUPE staff and those on Parkwood contracts were withheld
leading to staff dissatisfaction.
All parties interviewed for this study suggested that correctly
pricing contracts is crucial for success. The union has questioned
the procurement process for its failure to identify the short fall in
costs. The contract has since been retendered for at a higher
price and different service specifications.
Parkwood Healthcare were awarded the contract to provide patient transport services to six, later four, NHS trusts in the
north Staffordshire area from August 2006. The contract was initially for three years with an option to extend for a further
two years, and approximately 70 staff were TUPE transferred from Staffordshire Ambulance Service to the new employer.
The service transported non-emergency patients in the North Staffordshire region for treatment at the trusts. The contract
was worth approximately £6million and the service transported up to 500 patients per day.

11
Case study 6
Robinia Learning Disability Support Services
in Cornwall
Background
The outsourcing of learning disability support services in
Cornwall took place in the context of the integration of
health and social care for learning disability services. Up
until that point, the local authority had provided day care
while the NHS had provided residential care. The
outsourcing was intended to break down that division, and
also deliver efficiencies through the introduction of
competition among providers. The trust had also received a
critical report from the social care inspectorate, which further
encouraged the trust and local authority to bring in new
suppliers.
Cornwall Council led on the commissioning. As staff were
TUPE transferred from the NHS to private and third sector
providers, the Cornwall Partnership Trust, the NHS mental
health trust and previous provider, and Cornwall Council
signed an innovative agreement to protect staff terms and
conditions.
The contract contained a binding agreement on all new
providers to adhere to the terms of the Code of Practice on
Two Tier Workforce Arrangements, including providing a
‘broadly equivalent’ pension.
The transfer took place on April 1st
2008. Five months later a
staff enquiry revealed that staff pension contributions were
not being paid into staff NHS pensions. Contrary to the
understanding of the workforce and union, Robinia did not
gain direction employer status which would have entitled
staff within the organisation to remain in the NHS pension
scheme. Payslips continued to show deductions for “NHS
Pension”.
Until winning the contract, Robinia had no presence in the
south-west, and staff reported a lack of management
support, concerns about practice and monitoring of
standards. New staff that were brought in were employed on
lesser terms and conditions which breached the agreement
between the Cornwall Partnership Trust and Cornwall
Council. Robinia argued that they were unable to afford to
pay new staff at broadly equivalent rates to the TUPE staff.
The contract signed by Robinia obliged them to recognise a
union, but according to union officers, this did not translate
into a meaningful relationship. Unlike the other learning
disability providers, Robinia had no joint consultative
committee or employee forum through which staff and their
representatives could raise and address concerns.
Allegations of abuse also arose at two of the Robinia
homes, reported by external agencies. Staff were suspended
and replaced with agency staff. According to the UNISON
full time officer, several of these agency staff were
inexperienced and unsupported. A further serious incident
occurred.
At this point, the local authority intervened and replaced
Robinia with another provider who was already operating in
the area at one house, and gave them notice of termination
of their contracts for the other two. It became apparent at
this point that staff had never been placed in a pension
scheme and that their contributions had been accumulating
in a bank account.
The NHS Pensions Agency initially refused to readmit staff
into the scheme, but after the campaigns by the workforce
and union, they were allowed to rejoin. The contracts for the
three homes were re-tendered and other providers brought
in. The union made efforts to remove the two-tier workforce
which had emerged under Robinia, and succeeded in
broadly harmonising pay, although differentials continued to
exist, particularly on annual increments.
Analysis
The outsourcing process initially placed great emphasis on
ensuring staff continued to be treated well and had terms
and conditions maintained through the transfer. An
agreement to prevent the emergence of a two-tier workforce
was written into the contract with private and third sector
contractors. However, there appeared to be no mechanism
to enforce the agreement, and before long, new staff were
being employed on lower pay and diminished conditions,
and pension obligations were not being met.
The UNISON full time officer attempted to agree a protocol
with the Council commissioners on trade union involvement
in procurement and tendering in order to try and ensure that
workforce matters were fully considered at that stage.
However, commissioners felt unable to involve the union due
to lack of capacity. This lack of involvement continued once
the contracts were in place, as Robinia missed opportunities
to work with the union to find solutions.
Finally, those interviewed for this study raised concerns about
Robinia’s ability to manage the contract they took on within
the budget agreed. Robinia’s lack of presence in the region
meant that staff felt they did not have adequate support from
managers. This was exacerbated by the geographical
dispersion of the three homes taken on by the company,
which stretched management resources further. The standard
of care provided at the homes came under considerable
criticism, and a serious incident occurred injuring one of the
residents.
Learning disability support services previously provided by the NHS were contracted out by the local authority department
of adult social care and the Primary Care Trust to three, third and private sector providers in 2008.
300 staff were transferred to 5 providers. 30 staff were transferred to Robinia, a company principally based in the
Midlands and south-east. Robinia took over three supported group living homes, providing accommodation and services
to small groups of adults with learning disabilities and other health needs.

Ensuring High Quality Public Services Through Workforce Engagement

Ensuring High Quality Public Services Through Workforce Engagement

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