Legality of Homerton Hospital’s proposed £45 million five-year ISS contract called into question

Domestics from Homerton Hospital protest outside in December over their pay and conditions, joined b

Domestics from Homerton Hospital protest outside in December over their pay and conditions, joined by Hackney Mayor Phil Glanville. Picture: Lola McEvoy, GMB - Credit: Lola McEvoy, GMB

Questions have been raised about the legality of Homerton Hospital pushing through a £45m five-year contract to outsource its cleaners, porters and security staff with no tender.

Homerton Hospital sign:Picture Ken Mears

Homerton Hospital sign:Picture Ken Mears - Credit: Archant

Regulations require a tender for contracts over £25,000, but hospital chiefs could renew its contract with facility services giant ISS in October without one.

Over the past seven months a campaign from the GMB workers’ union has urged them to bring the services back in-house, because of the “below par and poverty inducing” terms and conditions.

About half of the 200 staff employed by ISS are only entitled to statutory sick pay, meaning they get no pay for the first three days of sickness and £94.25 a week thereafter. Concerns have been raised about staff working in an infectious environment during the Covid-19 pandemic.

ISS’ operating profit in 2018 was nearly £21m, while its subsidiary ISS Mediclean made a profit of £19m that year.

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At a Hackney Council health scrutiny commission meeting, GMB organiser Lola McEvoy explained she believes the contract “lacked any public or official scrutiny”.

She asked: “Why anyone would extend the contract against the instructions of NHS England and trade unions at a national level, which would be so contentious when there has been an ongoing campaign and multiple complaints about the provider ISS, from bullying, harassment, a refusal to pay sick pay to people with very severe illnesses, despite it coming to light they have an occupational sick pay scheme. If that doesn’t flag up ISS as an irresponsible and wholly inadequate empoyer within our public services, which in turn should have influenced the decision to take out a VEAT.”

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VEAT stands for voluntary ex-ante transparency notice, which would allow a new contract to be awarded without going out to tender.

Ms McEvoy continued: “When we sought independent legal advice from a procurement lawyer in the NHS, they told us a VEAT could only be used in very specific circumstances if there were absolutely no problems whatsoever in the contract. The only reason you can extend with a VEAT is if the contract has been absolutely brilliant and both parties are totally supportive of the performances of the provider.

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“I’m really interested to find out how what our members have experienced at the Homerton fits with the trust’s decision.”

Homerton’s finance director Phil Wells and director of workforce Tom Nettell, who were at the public meeting to represent the hospital, did not make any reference to the decision to take out a VEAT in their responses.

Mr Wells said: “The board has chosen to extend five years and published a notice at the beginning of June that sets out the rationale for extensions, and the decision reflects the general uncertainty in the soft FM (facilities management) market and the economic uncertainly of leaving the European market and global uncertainty of the heathcare crisis.”

He expressed gratitude to the ISS staff for the work they have carried out making sure the hospital is clean.

“The work has been exceptional through this crisis. The ISS team put in a great amount of effort to make sure that is the case and our MRSA rates are among the lowest,” he said.

“We have been negotiating this new contract with ISS for a considerable period of time and it is largely a like-for-like service for what we get now.” The problematic issues are sick pay and the London living wage uplift, noted Mr Wells, who said he was seeking to remedy that in the new contract. “I am optimistic we will reach an agreement with them on that. We are not there yet and it would be improper to go into the details, but we are within touching distance to get to a place to get the sort of recognition we are talking about,” he added.

He rejected the idea of putting in a two-year break clause, saying that would necessitate going to market in 12 months, which would not provide enough time to get the appropriate cost analysis or options appraisals carried out.

A break clause would also result in a “much higher price” for the contract, he said.

Cllr Michelle Gregory said: “It’s not a surprise the contract has come to an end and you need to look at options. Why didn’t you look into it two years ago? It puts you in a difficult position to negotiate. Why did you leave it until the last minute?”

Mr Wells replied: “In terms of the effort to seek expertise in in-sourcing, we looked at options, some in more detail than others. I’ll say again it’s our intention to look at this so when we get to the end of this contract we have a plan. If we get it wrong in the meantime, we would have to spend a lot of money and a lot of time, and damage hard-earned trust from the residents of Hackney. At this point, in the future everything remains possible.”

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