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Rising costs from clinical waste switch start to bite

Several NHS Trusts are grappling with extra costs and relying on temporary containers for clinical waste storage, after a forced change of supplier following last year’s stockpiling scandal, reports HSJ.


One Trust warned its new contract with replacement provider Mitie could result in an annual cost pressure of £800,000, and said the contractor’s service had been “below what is expected.”


It is nearly five months since the government took action again Healthcare Environmental Services, which had provided clinical waste management for more than 40 NHS Trusts. The company was found to be storing up to five times the permitted amount of waste at its facilities, including unrefrigerated storage of anatomical waste. It ceased trading in December. 


The majority of affected Trusts moved to a new contract with Mitie, but HSJ reports that some are now at risk of breaching their control totals due to the extra costs, which have previously been reported as up to three times higher than the HES price.


In an article written by Nick Carding, HSJ refers to Board Papers from the University Hospitals of Morecambe Bay Foundation Trust, published at the end of January, which state Mitie’s “quality and levels of service to date have been below what is expected.”


The Trust has given notice to Mitie that it wants to agree an “early termination” of the 12-month contract and also “seek improved financial terms.” Its contract with Mitie expires in December 2019.


According to the Board Papers, the Trust could face an annual cost pressure of £800,000 from the contract, while its costs incurred from establishing contingency arrangements exceeded £140,000.


The Trust has also been forced to take legal advice after being invoiced nearly £160,000 for the purchase of waste bins from Starryshaw Consultants – a company owned by Garry Pettigrew, the owner of HES.


The Trust has not responded to HSJ’s request for comment.


However, a Mitie spokeswoman says: “Mitie took on the clinical waste contract under emergency measures. The commercial agreement reflects the need to mobilise at speed and the current market rate for disposal, not storage as per the previous contractors’ model.


“Backlogs on NHS sites across the UK have been cleared and we are already operating at a normal level. Our current focus is to work with each Trust to support them in reducing the cost of the contract.


“These savings will be generated from initiatives including on-site treatment, the deployment of reusable containers, material consolidation and empowering Trusts to drive reductions in their waste volumes.”


Meanwhile, other Trusts previously served by HES have also experienced financial pressures after changing waste provider.


Monique Bradford, Assistant Facilities Manager at Royal National Orthopaedic Hospital Trust – which is not on the Mitie contract – told HSJ the Trust’s contingency plan had created additional cost pressures.


Hull and East Yorkshire Hospitals Trust reported in its January Board Papers that it had “no ability to cover the money” associated with the extra costs, while a York Teaching Hospital FT spokeswoman said the “significantly higher contract costs are putting pressure on delivery of the control total.”


The Trust has already spent £108,000 on contingency plans.


South Tees Hospitals FT said it had spent £45,000 on contingency, though this was not expected to impact on its ability to hit its control total.


Robert Jones and Agnes Hunt Orthopaedic Hospital FT says: “there are extra costs and we’re mitigating these costs.” A trust spokeswoman said was “not sure yet” of what the overall impact would be on its control total.


The contingency plans included storage containers provided by the government being installed at Trusts until Mitie (or other replacement waste providers) were “running services at 100%” – according to a statement by then Health Minister Steve Barclay in October last year.


York Teaching Hospital, South Tees Hospitals FT, and Robert Jones and Agnes Hunt Orthopaedic Hospital FT said they continue to use the temporary storage containers.


HSJ has asked other Trusts for an update.


Last autumn, the government allocated £1m to deal with the NHS’ contingency plans for the waste disposal problems.


HSJ has also asked the Department of Health and Social Care if it has spent more than the £1m allocated on the contingency plans, but the DHSC has not yet responded.