By Lucy Phillips
21 April 2011
Primary care trust finance departments are preparing to establish themselves as social enterprises in the face of widespread job losses, Public Finance has learnt.
As staff from England’s 151 PCTs merge into 50 temporary ‘clusters’ ahead of their planned abolition in 2013, groups are considering forming local social enterprises or joint ventures to sell support services back to GP commissioning consortiums, currently emerging in shadow form.
David Stout, director of the NHS Confederation’s PCT Network, told PF: ‘It’s not happened yet but people are talking about how it might operate. I think people are interested in the idea.’
While some elements of finance will be done by consortiums themselves, others, such as financial planning, bill paying and contract negotiations, are likely to be shared locally. Stout said commissioning support functions would sit outside individual consortiums and they would be buying them in. ‘Those sorts of post-PCT cluster structures are likely to be one of the many options,’ said Stout.
But he warned: ‘It’s an unpredictable field at the moment as we don’t know what the competition will be.’
Chris Calkin, chair of the Healthcare Financial Management Association policy forum, said he could understand why PCT finance departments would wish to explore this model, saying there were potential advantages to both finance staff and GP consortiums ‘in maintaining expertise, critical mass, training and delivering economies of scale and therefore reduced transaction costs’.
He added that ‘only time would tell’ if the social enterprise model was successful or not ‘but it does demonstrate NHS finance staff’s ability to innovate and think outside traditional solutions and organisational boundaries’.
PCTs are already dramatically shedding staff. According to the government’s impact assessment of the changes, 30% of the 50,400 staff working for PCTs are expected to be made redundant. Redundancy costs across PCTs, strategic health authorities (also being abolished) and the Department for Health and its arm’s-length bodies are estimated to reach £1.024bn.
At least two-thirds of PCT finance director jobs will go, while the HFMA has revealed that 3,000 finance staff had attended one of their ‘Take Control’ courses, funded by the DoH to help people going through job changes. There are about 14,000 finance staff working across the NHS as a whole.
Significant numbers are also likely to be rehired by GP consortiums and other new bodies. Stout said: ‘There is a possibility that you will be reappointing people you have just made redundant. In the way the proposals are being developed there’s not much we can do about that.’
Calkin added: ‘I could well see there will be people who will be recycled back through the system.’
The Unite union claimed PCTs were ‘haemorrhaging’ staff. Some will have had redundancy payments and then go and get new jobs for the consortiums. ‘It’s a farce,’ a spokeswoman told PF. ‘What the government has done with this [health] Bill is to open the whole of the NHS to any entrepreneurial manager who thinks they may be able to run a small part of the NHS... it all sounds very lovely, friendly and not for profit and they will win an initial contract, but five years down the line a private sector firm will win it with a cheaper price,’ she added.
A spokeswoman from Unison said the ‘obvious’ place for GP consortiums to go for commissioning expertise would be ‘staff being made redundant from PCTs’.
The DoH said it had issued transition guidance so that relevant PCT employees could use their expertise to support GP consortiums in shadow form.
