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The Coalition Government has expressed a clear objective of creating “a mixed contractor economy” that will deliver greater competitiveness across the public sector. Their aim is to drive efficiency and value for money and stimulate innovation in how public services are provided.

In certain respects, the Coalition Government is reducing the “safety measures” that helped public servants make a comfortable landing when they left employment of the government and its agencies.

As part of its overall aim of encouraging public sector organisations to be “spun out” into mutuals, co-operatives, charities and social enterprises, steps are also being taken to reduce the obligations of these organisations to match existing public sector employment terms.

In December 2010 the Government announced its withdrawal of the Code of Practice in Workforce Matters in Public Sector Service Contracts. This Code of Practice required organisations which had accepted employees transferred from the public sector to offer new recruits employment terms which were no less favourable than those of transferred employees.

With this restriction removed, organisations providing public services will no longer be perpetually locked into employment arrangements inherited from the public sector. The indications are that the similar provisions covering Local Authorities are likely to be similarly withdrawn and this will also impact on NHS bodies and their partner organisations.

Unsurprisingly, the CBI welcomes this development, though, no doubt it will raise serious concerns with public sector unions – who saw this code as a major achievement in their discussions with the Labour Government. There is no suggestion the government plans to reduce employment rights under TUPE legislation and employees who have benefited from earlier arrangements remain “protected” – but future transfers will face fewer constraints on their ability to take on services previously delivered by public service organisations.

In March 2011 the Government then announced new consultation on the requirement to provide broadly comparable pensions for staff transferring from the public sector into new employers. It repeated the finding of the Independent Public Services Pensions Commission that the existing public sector pension structures and the requirements to provide broadly comparable pensions were acting as a barrier to non-public service providers.

It’s clear now the Government does recognise the need to address pensions matters discussed by Attractor previously in its aim to encourage innovation and a mixed economy. It is also obvious it prefers not to remove the barriers by opening up public sector pension schemes to new organisations – a signal that will not be lost on public servants or their union representatives.

The NHS White Paper, “Equity and Excellence: Liberating the NHS”  represents the completion of a devolution journey the NHS has been undertaking for over a decade. Moving all service providers either to Foundation Trust status or to one of a number of social enterprise models, it effectively de-nationalises NHS organisations.

In future, NHS services would be delivered through a wide range of diverse organisations – based on different legal frameworks and working in different ways.

When it comes to workforce issues, most people are currently focusing on the impact on those involved in commissioning, planning, inspecting, monitoring and managing the NHS. Staff losing jobs, reassigning function to new GP consortia, possible TUPE transfers and skills retention challenges.

But what does all this mean for the workforce delivering care? When the dust settles, these are the people we rely on to maintain high quality patient experiences.

While it might feel a little early, it’s worth considering what the provider organisations emerging from the shake up might look like. Read the rest of this entry →