Competitive tendering in NHS catering: a suitable policy?
| Date | 01 June 1996 |
| DOI | https://doi.org/10.1108/01425459610116474 |
| Pages | 62-76 |
| Published date | 01 June 1996 |
| Author | Clare Kelliher |
| Subject Matter | HR & organizational behaviour |
Employee
Relations
18,3
62
Competitive tendering in NHS
catering: a suitable policy?
Clare Kelliher
Surrey European Management School, University of Surrey,
Guildford, UK
This article attempts to evaluate the policy of competitive tendering for
ancillary services in the NHS, by reference to a number of case studies of
catering services. The aim of the policy will be examined and the assumptions
about the conditions under which it would operate will be explored. By
reference to the case studies it will be shown that these conditions were not
always fully met and hence, it will be argued, that when the policy was
implemented there were inevitably problems encountered in achieving its aims.
Furthermore, a range of employee relations factors influenced the extent of
change which could be made.
Competitive tendering for ancillary services was originally introduced into
the NHS in the mid-1980s. Health authorities were asked initially to test the cost
of providing catering, domestic and laundry services, by inviting tenders for the
provision of these services from private firms. The stated aim of this policy was
to reduce costs and increase efficiency in the provision of these services (DHSS,
1983 ). Competitive tendering was however, part of a more general government
policy designed to reform the public sector, developed by the Thatcher
Government (HM Treasury, 1984). Influenced by the thinking of the “new right”,
the Government was concerned to reduce the role of the state in the economy
and to allow the market mechanism to operate. However, Cutler and Waine
(1994) argue that because the Government were not, for political reasons,
prepared to take on the “new right” privatization programme in relation to
social welfare, it had to accept the expenditure implications of running the
social services. This, coupled with the desire not to raise taxes, resulted in the
need to contain public expenditure. The introduction of competitive pressure
and “managerialism” into the management of these services were seen as
means of achieving this (Cutler and Waine, 1994).
For a number of years, concern had been expressed over the growing levels of
public expenditure and increasing pressure had been put on local governments,
the civil service and the NHS to perform more efficiently. The public sector
services were criticized for being inefficient and for representing a drain on the
productive sectors of the economy (Bacon and Eltis, 1976). As Donnison (1984)
notes, the absence of competition was seen to be one of the greatest impediments
to efficiency. It was argued that in the non-market public sector there was no
incentive to produce goods and services at minimum cost and therefore, public
sector employees would seek to protect their own interests, at the expense of
Employee Relations, Vol. 18 No. 3,
1996, pp. 62-76 © MCBUniversity
Press, 0142-5455
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