Mark Tran 

Strike threat as private firm wins £1.6bn NHS deal

The NHS was today facing strike action after the government awarded the German company DHL a £1.6bn contract to supply and deliver medical equipment.
  
  

A doctor's stethoscope
The government has awarded DHL a £1.6bn contract to supply and deliver medical equipment. Photograph: AP Photograph: AP

The NHS was today facing strike action after the government awarded the German company DHL a £1.6bn contract to supply and deliver medical equipment.

From October 1, DHL and its and its Texas-based partner, Novation, will take over NHS Logistics - which supplies hospitals with food, bedding and equipment - in the biggest-ever NHS privatisation.

Hundreds of workers belonging to the largest NHS union, Unison, have already been balloted on strike action after it emerged in the summer that such a contract was in the pipeline.

The union will announce the results of the ballot at the start of the TUC conference on Monday.

"We don't know what form the strike will take - it might be one day or two - and this will be discussed once we get the results," a Unison spokeswoman said.

Unison has given its backing to a strike, saying it "reflects the groundswell of opposition to the privatisation of the service, and the transfer of staff to a new employer, among NHS Logistics staff".

DHL said it would seek to make savings of over £1bn over the 10-year deal, and would create around 1,000 jobs. Under the agreement, it will run a division called NHS Supply Chain that will manage around £22bn of health service spending.

NHS Supply Chain will have responsibility for delivering all procurement and logistics services, covering food, bed and operating theatre equipment for 600 hospitals as well as surgeries.

"This contract is both good for staff and good for the NHS," John Allan, the chief executive of DHL's logistics division, said.

"We are committed to targeting savings on behalf of the Department of Health that can be directed back to patient care by building upon the success of both NHS Logistics and some of the scope of the NHS Purchasing and Supply Agency."

However, Unison said it was impossible to believe the company's claims of savings and job increases, pointing out that NHS Logistics was already a successful and efficient operation.

A spokesman for the Department of Health said: "Although NHS Logistics has been a successful organisation in many ways, it provides less than one-third of the NHS spend on such products, and the outsourcing is necessary to deliver greater value for money for the NHS."

DHL said it planned to open a new 250,000 sq ft UK-based distribution centre to act as a stockholding hub for food and other products. An extra 1,000 employees are expected to be recruited for the facility.

NHS Logistics operates from distribution centres in Derbyshire, Cheshire, West Yorkshire, Kent and Suffolk. Until now, it had been run as a not for profit organisation.

 

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