NHS outsourcing and mutuals in crisis?

An independent enquiry into the collapse of the largest single integrated health outsourcing contract so far let by the NHS has just been published.

The contract, worth £725m over five years, was intended to integrate community care for over 18 year olds, acute emergency care for the over 65s and older people’s mental health services.

It was let by Cambridgeshire & Peterborough CCG after a procurement exercise costing an estimated £1m and won by a partnership of existing NHS providers called UnitingCare Partnership, comprising Cambridgeshire & Peterborough NHS Foundation Trust with Cambridge University Hospitals NHS Foundation Trust.

The contract collapsed in December 2015 after just eight months, with both sides claiming it was not economically viable. UnitingCare apparently required a further £34.3m in order to deliver the services covered by the contract, which was intended as a landmark both in service integration and outcomes-based commissioning.

It is reported in The Guardian that the contract attracted unanticipated VAT costs, possibly as a result of the UnitingCare Partnership changing its legal structure to a Limited Liability Partnership part-way through the tendering process. Monitor apparently had such grave concerns that it only signed off on the deal 24-hours before the service was due to go live. The senior GP at Cambridgeshire & Peterborough CCG has resigned citing personal reasons.

The National Health Executive says that the “major holes” in contract design, evaluation and risk assessment that were evident here are likely to “push NHS England to tighten scrutiny and assurance processes involved in large transactions, especially those with complicated underlying structures”.

West Midlands Ambulance Service has also published an internal audit report on the deal.

And it isn’t just NHS outsourcing that is in difficulties. It has also just been reported that SEQOL, the Swindon healthcare mutual established as a CIC in 2011 and a Cabinet Office “mutuals pathfinder” supported by the  John Lewis Partnership, will not have its £10.6m adult social care contract renewed. The service is to be brought back in-house which Swindon Council believes will save over £1m in management costs and overheads.

These two stories should be ringing very loud alarm bells.

Birmingham UK. Freelance research, evaluation and policy consultant specialising in social enterprise and the third sector. I maintain the BSSEC blog and website

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