Q71 Chair: The Report does say-I can't remember the satisfaction rate.
Q72 Nick Smith: It says customer satisfaction is low, but you just said that it's high because good new buildings are being well maintained. Well, where's the truth?
Peter Coates: Well, I'll have to come back with a note on that.
David Finlay: lust to clarify, it's a minority of trusts which weren't satisfied with maintenance, but it was quite a significant minority.
Q73 Chair: It's a third.
David Finlay: 20%. Chair: 20%. David Finlay: Yes.
Q74 Stephen Barclay: The Report does say on page 34 that many trusts "are sceptical that their systems and deductions provide sufficient incentives to contractors", so there's also a question as to what extent things are being managed via the contract. Can I refer instead to the hotel services, because I found the comment at paragraph 10 on page 6 interesting, where it says that it's "not clear whether it is better or worse value for money to include the hotel services", and just relate that to your earlier answer? I was a little confused when you were saying there's a justification for McAlpine in charging high maintenance fees because they lost £100 million on construction. I thought one of the attractions of PFI was that the private sector can manage construction risk better than the public sector, so, to an extent, that is one of the risks one assumes they were taking in assessing that construction risk under PFI. What I'm driving at, really, is your thoughts on decoupling aspects of the PFI deal, so perhaps it's more focused on managing the construction risk and taking out the hotel services from the overall deal.
Peter Coates: My view on this is that trusts were given the choice of whether to include or exclude hotel services in their PFI contract, and various changes in the way in which contractors are paid in the NHS and employed in the NHS mean that the building blocks of cost of the providing of hotel service in terms of staff are exactly the same. In essence, if a trust wants to outsource its domestic or its catering staff in a PFI contract, it employs those people then transfers them on secondment to the private sector and continues to pay them as NHS employees, and those employees have access to the NHS pension scheme and whatever. So, given that all the costs are identical, it's not surprising that it's a very fine call for the trust.
Q75 Stephen Barclay: Well, it's unclear-that's what the Report is saying-but likewise, when you add complexity into a contract, it then costs more to manage, and costs tend to then be opaque. Is there not an incentive in trying to strip out some of the complexity of these contracts; therefore, I might argue it through the other end of the telescope and say, if there isn't a case on value for money grounds in including this, would it not make more sense not to include it?
Peter Coates: Most trusts going forward now exclude hotel services from their PFI scheme.
Q76 Chair: Say that again.
Peter Coates: Most trusts who have signed the most recent deals, and those who are considering procurement now, are excluding hotel services from their PFI contract.
Q77 Stephen Barclay: So, most but not all. Because, again, there's a range of expertise, and the Report makes it clear that some trusts really struggle on the issues of expertise. Is there no firm guidance, then, coming from the Department as to whether these should be included or excluded?
Peter Coates: If the costs are broadly the same, then our view must be it's an operational choice of the trust. Our job isn't to second-guess the trust's operation and the way it's manages its services.
Q78 Mr Bacon: Do the contracts that have a five-year renegotiation point for some of these services typically include a breakpoint for those sorts of services as well, so, even if the contract had initially included these hotel costs, it could, at a later point, stop including them?
Peter Coates: Yes, the five-year point is an opportunity to take them back in-house.
Q79 Matthew Hancock: More broadly, since parts of the future projects that you're looking at now have options of whether to go within or without the PFI, do you look for whether it's best value for money to deliver the whole projects within PFI or through straightforward public procurement?
Peter Coates: It becomes a personal preference thing.
Q80 Matthew Hancock: But surely there's a value for money thing.
Peter Coates: Well, as I said, all the building blocks of the value for money of hotel services are the same whether you outsource or do it in-house.