[The impact of procurement method (PFI & Non-PFI) on the operational performance of the healthcare infrastructure in England]

by

Contents

CHAPTER 1: INTRODUCTION2

Background of the Study2

Purpose of the Study2

Problem Statement3

Aims and Objectives4

CHAPTER 2: LITERATURE REVIEW5

Introduction5

Genesis and development of PFI in the UK5

Traditional procurement8

PFI in the health sector9

Risk transfer10

Value for Money Assessment11

PFI problems in the health sector14

CHAPTER 3: METHODOLOGY15

Introduction15

Research Problem15

Research Strategy15

Data Collection Method18

Sampling Process18

Data Quality19

Conclusion20

CHAPTER 1: INTRODUCTION

Background of the Study

The crisis of confidence in the welfare state that followed the economic turmoil caused by rising oil prices in the 70 and the discrediting of Keynesian theories as a means of macroeconomic management, caused the appearance of multiple free-market advocates as a solution to meet both recurring problems as they emerged in welfare (Pierson, 1998). At the same time, the abandonment of fixed exchange rate regime and control of capital forced a reorientation of the economy in the UK. Political reaction the Conservative government of Margaret Thatcher to become more competitive was to attract capital but not to get highly qualified manpower or better infrastructures but to achieve a reduction in spending on public services (Famsworth, 2004). As for welfare, this goal meant reorganizing the labor market try and outside to prevent the increase in social benefits and costs of welfare services, and create opportunities for capital investment in activities cost of the welfare state. Recently, we are seeing a greater willingness to invest more state funds public services (Blair, 2002), while companies are investing in undervalued sectors previously (Nelson, 1995; Ferguson, Lavalette and Money, 2002).

Purpose of the Study

After the election of Labour Government in 1997, PFI (Public Finance Initiative) has been widely used for the procurement of hospital projects and the number of operational PFI hospitals has grown extensively in recent years. Regardless of benchmarking exercises on the cost side being required as part of most PFI contracts, little research is available on the performance of the two procurement routes (PFI/Non-PFI) to services provision. Wang (2008) identified that PFI hospitals perform similar to non-PFI hospitals in delivery of services. Liebe and Pollock (2009) stated that under PFI soft facilities management (FM) services provide less value for money (VFM) compared to non-PFI hospitals, however, their research leans mostly on socially oriented argumentation rather than a quantitative and data-driven approach to VFM. Findings of other researchers suggest that PFI hospitals have significantly higher performance on only certain performance indicators with no significant higher cost (Ive et al, 2010). Their research has been reinforced with aggregate data at site level, albeit, a hypothetic gap exist due to the fact that in approximately half of PFI procured projects soft FM is not within the scope of contract and it is either outsourced or is in-house by NHS, thus accounting for these new findings may vastly weaken their conclusions. The contextual backdrop of the current debate indicates a level of uncertainty and lack of understanding around the hypothesis that procurement method can affect operational performance; this thesis seeks to fill the research gap in this area and shall be the ...