The unfortunate demise of the Retention of Employment model

Retention of Employment is an interesting employment model which not many people know about.  It was designed to bring about a win-win scenario for public bodies entering in to Joint Venture (JV) arrangements with private sector organisations. 

Under this model, the staff are seconded on a long-term basis to the JV, and therefore, ultimate accountability for the staff’s terms and conditions remain with the pubic sector body.  This has a number of benefits for staff  including the ability to retain their public sector pension arrangements; this is important for all parties, as frequently the cost of bulk pension transfers prohibit any further commercial negotations with the Joint Venture.

The (previous) Government ceased the operation of this arrangement, and I think that this was a mistake.   Although recognising that on average it can take up to two years from the initial tender to “Go-Live” for a Joint Venture, down-stream significant savings alongside income generation can be made from such organisations. 

We are in an era where all public organisations are looking to save money.   The loss of a concept such as Retention of Employment (R0E) means that Trust have one less traditional option when trying to avoid redundancies.   Admittedly, the timescales attached to Joint Ventures may not be attractive to Trusts looking to make cost reductions (yesterday).

So instead, Trusts are now looking to find alternative methods to manage through these rocky times.  I’m hoping that we are going to see some creative cost-saving options, similar to the concepts tried and tested in the private sector 2 years ago.  But that’s for another post….


3 comments on “The unfortunate demise of the Retention of Employment model

  1. Rick says:

    Karen, I’m just trying to get my head around this. Can you give some examples of the sort of JV that was facilitated by RoE and what its abolition has prevented?

    • karencwise says:

      An example is GSTS – a JV in Pathology services that originated with Guys and Tommys and Serco. (and GSTS doesn’t stand for Guys and St Thomas’ and Serco)!

      Guys & Tommys had a pathology workforce of c600 who were RoE. Later GSTS took on Bedford, but RoE was no longer an option and so these 90-odd staff were TUPE’d.

      My understanding was that there were substantial differences in how both JVs came into being, and the route was smoother when RoE as an employment model was used.

      One of the key reasons for this is the unions: as you know, they are against privatisation of the NHS, and JVs such as the one described above is considered to be the first step on the slippery slope towards that. When RoE has been an option, the unions have worked with Trusts in a more pro-active and collaborative manner . Without doubt, in an incredibly difficult process, having an engaged and willing workforce ensures that productivity is maintained and the negotiations aren’t distracted or protracted by workforce issues.

      The beauty of a JV is that not only do such arrangements enable services to be streamlined and made more cost efficient, but the Trust also benefits from any income generation. Therefore, JVs aren’t just about shunting the costs around.

  2. Kevin Ball says:

    Thanks, Karen but still not getting it. Consolidating the operations of three Pathology teams should produce an operational effectiveness and economy of scale which means a headcount reduction which I bet the Union’s cooperation was bought by a guarantee of protection from. What happens when Serco’s efficiencies mean redundant staff? Shuffle them back to the Trusts for redundancy or redeployment? Sounds to me like the Trusts have simply delayed the inevitable and picked up the cost in the meantime. I also know enough about Serco’s model to be sure that their management fees produce an income for them over and above any surplus left to share with their JV partners and I’d be really interested to know what the unit cost of pathology testing looks like pre and post implementation (and the method of calculation which delivers that number).

    I get that the transition is smoother but I think that’s because it’s missing the opportunity for the biggest benefit from the change.

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