Economist says no case for privatizing laundry services

A Simon Fraser University economist says there is no business case for privatizing in-house laundry services.

Debbie Stephenson

Debbie Stephenson

A Simon Fraser University economist says there is no business case for privatizing in-house laundry services.

Simon Fraser School of Public Policy economist Dr. Marvin Shaffer reviewed two documents from the Interior Health Authority he obtained through a Freedom of Information request.

The IHA announced last year it would seek bids from the private sector to take over operations of all its in-house laundry services in hospitals in Penticton, Kelowna, Vernon, Kamloops and Nelson as well as services in six smaller communities. Another announcement regarding the IHA’s plans is expected before the end of the year.

In the documents obtained by Shaffer, originating in 2010, the IHA concludes that outsourcing laundry would yield savings compared to keeping the in-house services. According to Shaffer, no valid financial analysis of these options is provided.

Shaffer also indicated there are unexplained discrepancies in the cost of building a new, centralized laundry facility, one of the options being considered by the IHA. The cost of building the facility, outlined in one of the documents, using a private-public partnership was estimated to cost $20 million. Another document said it would cost $10 million if it was built by the private sector.

“There is no explanation of why there should be such a discrepancy, particularly given that in both cases the facility would be built by the private sector,” Shaffer said in a  press released issued by the Hospital Employees Union (HEU).

The analysis was commissioned by the HEU, representing 175 laundry workers who would be impacted by the contracting out of the services.

Local governments in Nelson, Kamloops, Williams Lake, Summerland, Vernon and 100 Mile House have recently passed motions opposing the privatization of services.

Workers took to the streets across the Interior in October including Penticton. A rally was held defending the 17 jobs that laundry services provide in Penticton.

A local laundry worker, Michael Vandegriend, said he would be looking for a new job if the privatization occurs.

“I’m just trying to save local jobs. In the long run it’s cheaper to keep laundry in-house,” Vandegriend told the Western News in October. “I might have to bump someone out of a different department or find another job.”