Mr. Robert G. Hughes
To ask the Secretary of State for Health what representations he has received urging health authorities be referred for unfair practice in competitive tendering for laundering facilities from the industry's trade association; and what response he has given.
§ Mr. Freeman
There has been continuing dialogue between the Department and the laundry trade association about the competitive tendering initiative since 1983. Some of its representations relating to problems about the process and its implementation by health authorities were met by guidance issued in January 1986 and November 1987, including a practical guide and handbook on monitoring of contracts following an independent study sponsored by the National Provincial Hospitals Trust and partially funded by the Department.
A report issued by the association in mid-1988 highlighted a number of areas of continuing difficulty. The Department investigated the complaints made and consulted widely on the report's recommendations before responding fully to the association. In summary:
Its proposed short model contract was seen as unacceptable because it failed to safeguard health authority interests. The association has been invited, however, to send in contract documents used by hospitals in Holland for consideration.
General concerns about capital accounting will be met by the new arrangements for capital charging and asset registers. Regarding a specific complaint about capital investment in laundering equipment by a district health authority, a rigorous scrutiny by the region at the time concluded that this represented best value for money.
Independent scrutiny of tendering arrangements, tender exercises and costs was already provided by the statutory process of external audit.
Where contractors had firm and factual evidence of unfair practices, this should be taken up at the time with the district health authority's general manager and if necessary with the appropriate regional health authority.
The association has also been invited to provide specific examples of completed tender exercises where, in its view, 299W the in-house team's costings were manifestly incomplete and this has operated to the detriment of a competitive contractor's bid. Such evidence is awaited.
We welcome the fact that the competitive tendering initiative for laundry services has improved value for money and generated savings of over £9 million.