Interserve, and its subsidiary Interserve healthcare
The company originated from London and Tilbury Lighterage Company Limited, in 1884. In 2001 the group officially became Interserve Plc.
In 2012 Interserve acquired Advantage Health care and renamed it Interserve Healthcare.
Interserve has 80,000 employees across the globe, is headquartered in the UK and is FTSE listed. It has numerous companies both in the UK and internationally,from construction and engineering, to catering and school meals, to security and support for the MoD, to rehabilitation and health care. It has had a presence in the UK healthcare sector for many years and is listed on framework agreements for the nhs. It fulfils services such as: construction work for new wards/buildings; managing NHS facilities; and reviewing/redesigning estates to make efficiency savings.
Interserve Healthcare provides staff for both NHS and nursing/care home facilities;it also provides complex care both in a home and community based setting. It operates through a network of 26 branches and works with CCGs, Social Services, private and NHS hospitals, nursing homes and learning disability establishments as well as delivering care to private clients in their own homes.Outside of the UK, Interserve works in the Gulf – in Saudi Arabia, Oman, Qatar and the UAE – with companies covering training and employment, and construction and engineering in the oil, gas and petrochemical industry in these countries.
Interserve has been involved with the NHS for many years and has taken full advantage of any opportunities to bid for contracts with the NHS and make a profit from the NHS. As already noted this ranges from recruitment to long-term investments in PFI projects to build hospitals.
The marketisation of healthcare since the Health and Social Care Act in 2012 has opened up numerous opportunities for Interserve. More recently a move towards prime provider contracts, under which one contractor has responsibility for a large sector of healthcare within a CCG and the right to sub-contract within this sector, would seem to be a perfect opportunity for a company such as Interserve.
Interserve is also an interested party in complex healthcare/healthcare at home; an area of increasing importance due to government interest in moving people away from hospitals towards home-based care. They even show interest in the next level of home-based case: live-in care.
Financials for Interserve Plc:
In the year ending 31st December 2016 (£million):
Revenue = 3244.6
Profit before tax = (94.1)
Tax = (7.5)
Total profit = (101.6)
In the year ending 31st December 2015 (£million):
Revenue = 3204.6
Profit before tax = 79.5
Tax = (9.3)
Total profit = 70.2
Though Interserve has had an increase in revenue, it suffered a sharp drop in profits. This was the result of a downturn in their construction, support services and in particular waste business (which lost £160m).
Financials for Interserve Healthcare Ltd:
In the year ending 31st December 2016 (£million):
Revenue = 45,309
Profit before tax = 1,842
Tax = (328)
Total profit = 1,514
In the year ending 31st December 2015 (£million):
Revenue = 48,197
Profit before tax = 1,712
Tax = (451)
Total profit = 1,261
Interserve Healthcare had a decrease in revenue of 6% due to a challenging year and “external market pressures”; this also led to a decrease in gross profits. However operating and total profits actually increased; this is due to a decrease in annual overhead costs of over £1 million. This decrease came as a result of the business restructuring at the start of 2016 and making savings from administration costs.
The top 10 shareholders in Interserve Plc hold 32.91% of the total shares. The top 5 are:
Henderson Global Investors Ltd. 5.30%
Artemis Investment Management LLP 5.17%
Old Mutual Global Investors (UK) Ltd. 4.97%
Farringdon Netherlands BV 4.07%
Aberdeen Asset Investments Ltd. 2.94%
According to the company in August 2016, Interserve has nine active contracts for facilities management with NHS hospitals, as a result of the company’s investment in PFI contracts. Initially Interserve invested in the consortium to build the hospitals and then at the point when the hospital becomes operational, Interserve then takes over the very lucrative facilities management contracts.
Lewisham and Greenwich NHS Trust
Interserve extended their contract with Lewisham and Greenwich NHS Trust by two years in March 2017. The service, who have worked with the Trust since 2012 will continue to provide catering, logistics, cleaning and portering services.
The services will be delivered at the 500 bed University Hospitla Lewisham as well as five community health centres.
In 2015 Interserve won a 12 month contract for domiciliary care for patients with highly complex needs.
Alder Hey Children’s Hospital
In mid-2012 Interserve won the contract to provide facilities management services to the new Alder Hey children’s hospital in Liverpool which opened in the summer of 2015. The new hospital was built by a consortium of Interserve, John Laing and Laing O’Rourke under a PFI contract. Interserve owns 20% of the consortium.
The contract was worth £50 million and when the hospital opened in late 2015 Interserve became responsible for maintaining the hospital for the next 25 years.
Interserve has a facilities management contract with Cumberland Infirmary as part of a PFI contract won in late 1997. The building of the hospital was completed in 2000 and since its completion Interserve has been responsible for facilities management of the building. The PFI contract runs for 35 years and now costs the North Cumbria NHS Hospitals Trust, which runs the hospital, almost £21 million per year. Under the PFI contract, the hospital building itself is owned by Health Management (Carlisle) Ltd (HMC), a joint venture between Interserve and Dalmore Capital Ltd.
There has been regular criticism of the contract and calls by campaigners for the Trust to somehow extricate itself from the contract. The hefty management fees are considered to be a major reason for the Trust’s large deficit. Over the years, and most recently in December 2016, there have been calls to end the PFI contract (and the management contract under the PFI) in order to stop the crippling payments.
Another reason for criticism is that the building itself has been discovered to be sub-standard. In mid-2015 it was discovered by firefighters that the hospital was a major fire safety risk. It was uncovered that the fireproofing materials used by the company were not adequate to allow for safe evacuation of patients and ensure that any fire could not spread across the building.
It was then revealed in early 2016 that HMC and Interserve were aware of the fire safety concerns before they made the NHS Trust aware of them. Despite, work to rectify the problem as the responsibility of Health Management (Carlisle) Ltd (HMC), news articles and HMC’s 2015 annual accounts (accessed via Companies House) appear to indicate that it took the Trust a legal battle to get HMC to pay for the remedial work.
It was reported in June 2017 that despite being aware of the fire safety failures for three years, sprinklers would not be fitted until 2020. The responsibility for the building lies with the PFI company and a union has called for a public inquiry into the safety failures.
In addition to these fire safety hazards, there have also been issues with Interserve’s running of the hospital’s car parking facilities which were highlighted in July 2016. New signs read that it would cost £5 to park for more than 3 and a half hours and this ticket would be valid up until midnight. This resulted in a large number of employees receiving fines if they were working a night shift that ran past midnight. A trust spokeswoman made a statement that this was incorrect and the signs should outline that there would be a charge of £5 to park for 24 hours. This was always supposed to be the policy and Interserve were tasked with replacing the signs to make clear the correct policy.
The prices of staff permits have also been increasing, with a large waiting list to even get one, meaning that many members of staff are having to pay full price to park in the main car park.
Interserve has a facilities management contract with University College London Hospital which began in 2005 and is expected to last until 2040. This is part of a PFI contract signed in 2000 in which Interserve was part of a consortium to build the new UCL hospital with Balfour Beatty. In 2012 Interserve sold a proportion of its equity in the PFI contract making £35 million; Interserve has retained a 16.7% share in the PFI contract.
Newcastle NHS Trust
In early 2005 Interserve and its partners (Equion Ltd and the Commonwealth Bank of Australia) were awarded the PFI contract by the Newcastle-upon-Tyne Hospitals NHS Trust for the Royal Victoria Infirmary and Freeman Hospital. The contract was for construction, refurbishment and facilities management services and was valued at £430 million. Mechanical and electrical maintenance, building and civil engineering, grounds maintenance and the provision and operation of the helpdesk were to be included in the work. In mid-2013 the hospital became operational and Interserve took over the facilities management.
Pembury Hospital, Tunbridge Wells
Interserve, alongside John Laing and the Commonwealth Bank of Australia, won the contract for the Pembury Hospital in Kent in 2008. The contract was said to be worth £225 million. Interserve would provide facilities management services in the new buildings over 30 years, a contract worth around £75 million. This included mechanical and electrical maintenance, estates management, grounds maintenance, utilities management and the provision and operation of a helpdesk.
The hospital opened in January 2011.
SW Acute Hospital, Enniskillen
In June 2012 Interserve began the contract to provide facilities management services in the new South West Acute Hospital in Enniskillen, Northern Ireland. The initial contract was a PFI contract begun in 2009. Interserve provides estates maintenance and management services, energy management, grounds maintenance, window cleaning and manage a helpdesk.
In 2001 Interserve won a contract to provide facilities management to The Dudley Group NHS Foundation Trust, under the PFI contract to build the hospital worth £598 million. The facilities management contract began when the new hospital became operational in mid-2015. They provide non-clinical support services including maintenance, security, car parking, catering and portering. Under the PFI agreement the contract is due to end in 2041 and has a life-time value of £530 million.
Leicester, Leicestershire and Rutland
In 2013 Interserve signed a contract with Leicestershire Partnership NHS Trust, University Hospitals of Leicester NHS Trust and the Leicester City, Leicestershire County and Rutland Primary Care Trust Cluster to improve estates and facilities management services across the cities and counties. The contract was seven years long, worth around £300 million and was expected to save the NHS a significant amount of money.
Interserve were to be in charge of catering, cleaning, maintenance and security across more than 550 NHS buildings and properties.
However, in April 2016 this contract was scrapped four years early due to major problems and poor standards. These included patients in one hospital receiving meals up to three hours late and the merging of cleaning and catering services meaning around 100 people lost their jobs.
The contract was one of the first of its kind in this country but its poor execution left people in the area thrilled when the contract was scrapped after years of protesting against it.
It later came to light that the ex-Interserve staff were getting paid half what the NHS contracted staff were being paid.