The WA Government will spend up to $93 million to bring 650 jobs back under state control, in a significant scaling back of privatisation of services at Fiona Stanley Hospital (FSH).

Key points: About 65 per cent of Serco staff will return to the public sector

About 65 per cent of Serco staff will return to the public sector Cleaning, catering and orderlies are among services to be affected

Cleaning, catering and orderlies are among services to be affected Serco had a 20-year contract but the Government is scaling it back

The changes to the multi-billion-dollar deal with private provider Serco will see cleaning, catering, orderly and domestic assistant services brought back into the public sector over an 18-month transition.

It follows the former Barnett government's decision to privatise non-clinical services at FSH in a 20-year deal with Serco.

The McGowan Government said it was scaling back that deal at the first opportunity, with approximately 65 per cent of the Serco staff at FSH to be brought back into the public sector.

Unions have celebrated the revised deal but the State Opposition has attacked the arrangement, labelling it the "most irresponsible time to make major changes to the health system" in the midst of the coronavirus outbreak.

Premier Mark McGowan announced the new arrangement within minutes of confirming WA had its first suspected case of community transmission of coronavirus.

Move comes with a big price-tag

The revised FSH deal will come at a significant cost, with a one-off transition bill of $12.9 million and ongoing costs of $8 million per year over the next decade.

WA Health Minister Roger Cook and Premier Mark McGowan announce private jobs will return to the public sector at Fiona Stanley Hospital. ( ABC News: Jacob Kagi )

But Health Minister Roger Cook said the Government was meeting its pre-election commitment to bring privatised services back into public hands where possible.

"We have been able to do this in an affordable way and one that ensures there will be a safe and smooth transition," he said.

"What we are doing here is affordable because we have managed the state's finances."

Mr Cook said the deal would benefit patients as well as staff.

"We know that Western Australians like vital public servants to be in public hands," he said.

"The contract itself interfered with seamless patient care.

Proof that privatisation doesn't work, union says

Other services currently provided by Serco will continue until 2027, with the option to extend to 2031.

Serco Australia chief executive Mark Irwin said he was pleased much of the contract would continue, but dismissed suggestions it would improve patient care.

"The services that we have delivered have been world-class services," he said.

Serco Australia chief executive Mark Irwin said his firm had delivered world class services. ( ABC News: Andrew O'Connor )

United Workers Union secretary Carolyn Smith said the deal was evidence privatisation did not work.

"Orderlies could not touch patients and the contract was massively understaffed," she said.

The Serco contract came under heavy criticism in its early days, with problems including surgical equipment that had not been properly sterilised and the payment of 200 staff to manage a hospital that had not yet admitted patients.

An inquiry chaired by former under treasurer John Langoulant also revealed the $4.3 billion contract was signed without a stand-alone business case, casting doubt on whether the state was getting value for money.

The deal also saw Serco paid more than $100 million to run the hospital in 2014, even though at that time it had no patients.