Following on from the Carter Review many Health Trusts are grappling with the issue of what the future provision of FM and Estates Services should look like.
Our Group Chief Executive, Doug Bailey, provides some insight into this dilemma.
“When making decisions about the best way to structure future Estates and FM Services, Trust Boards should, first, read their five year Business Plan and then their Clinical Strategy. These should be kept to the forefront of their thinking while developing their future Estates and FM Strategy.” Doug Bailey GK Group CEO
One area the Trust Board has direct influence over shaping future provision of FM and Estates Services is by deciding whether to remain in-house or outsource at contract renewal stage. However, in my experience, this opportunity is often squandered by the so many Trust Boards.
Often when supporting Trusts in this exercise we find an array of personal views about what a future service should look like but it is a rarity to find a fully inclusive Board’s ratified view with regard to the agreed strategic direction of travel.
When GK Transformation are working with clients, we often start by asking the Executive Team, “What does a successful outcome to this exercise look like, in terms of the new service?” You will not be surprised to hear replies are often varied and, in some instances, at odds with each other.
One place to start is by determining the best source of expertise required to accomplish your future facilities services, remembering that these services are wide ranging from engineering to space planning, cleaning to catering all having the ability to directly influence the patient’s experience of your organization. For many Trust Executive Directors the answer is outsourcing. One Trust Board Non-executive Director, voicing a widely held opinion, stated “They do a better job because that’s their core business and ultimate focus.”
Competence, Quality and Cost
“It comes down to the question of core competency,” say outsourcing supporters. One of GK Transformation long term clients began by contracting out cleaning and portering services but retained other elements of the FM Service in-house. Now they have taken the next step and the Trust Finance Director advised “all of our facility services are now provided by outsourced providers.” “We finally just took a look at ourselves and asked, ‘Is facilities management our core business, can others do it better and more efficiently?’”
However, many other Trust Directors are equally convinced, in-house staff provide a better, more focused service to the organization at lower cost. “We know our people can provide quicker response,” said one Operations Director. “In most cases we’ve found that we can do it at a lower cost and deliver the savings quicker.” This strategy has been called in-sourcing: trying to eliminate outside service contracts, sometimes, hiring new staff to handle the work, if savings can be demonstrated through a simple business case.
It appears to be a growing view that general outsourcing wins more support amongst Trust Finance Directors. That said it is not unusual to find other members of a Trust Board who champion their in-house staff arrangements.
In many organizations, of course, there is a mix of outsourced and in-house staff. It is also not uncommon for outsourced functions to be brought back in-house. One reason for this is service quality and another is a sense the FM Directorate is not responsive and delivering the required efficiencies.
"Health and Social Care Information Centre, NHS ERIC data for 2014-15"
Despite all the disagreement — sometimes heated — about whether the skills needed in FM functions are best obtained by developing an in-house staff or by outsourcing, there is consensus that the skills, themselves, are changing.
At the top of many lists is the ability to communicate, an essential skill, as facilities increasingly see their mission as one of customer service. One FM Director summarized by stating “We’re serving everyone from ward clerks to the CEO.” “Our team needs to be able to communicate effectively at every level.”
For management positions, financial and other quantitative skills and strong management abilities, such as team-building and decision making, are high on many lists. “Nothing we do is rocket science,” said one Facilities Manager. “It’s all about managing our people effectively.”
An in-house staff provision clearly needs to maintain a higher level of technical competence. Trusts outsourcing technical expertise have a high reliance on good external advice and guidance being provided. Other Trusts have attempted to retain high skill individuals as part of their Contract Management Team; the idea is to embed knowledge of the business into contract management and monitoring functions.
These approaches are likely to become more common. Outsourcing is being looked at seriously in a growing number of NHS Trusts — even ones who had previously rejected the option. One of our clients has built an expert in-house team that includes a capital planning, engineering as well as softer FM services. The advantage, he said, is speed: response times are far shorter in his hospital than in one across town that has outsourced many FM functions. Nevertheless, GK Transformation have now been asked to undertake a Directorate wide benchmarking review and staffing cost analysis to present to his Board; the result could be outsourcing some functions. “I like the way we have it,” he said. “But we’re in the process of reviewing every bit of this, to see if there are benefits in going to market for some of our services.”
Of course, when it comes to outsourcing, money is a major consideration. Facility Executives are frequently asked to compare the cost of in-house staff against the going rate for contract services and, in some cases, the decision is made purely on the basis of the short term bottom line.
Given the importance of facilities services in supporting Trusts with their long term business plans and day to day delivery of clinical services, the question of in-house or out-sourced services should be part of a joined up strategy at the outset. Trusts should try, at all times, to keep the focus on long-term quality and added value impact, not short-term reduction.