PAC slams ‘grossly irresponsible’ local health services contract

17 Nov 16

The collapse of a contract worth £800m to provide adult community health services for people in Cambridgeshire and Peterborough was rushed into with ‘gross irresponsibility’ and could lead to patient suffering, MPs have found.

The Public Accounts Committee investigated the deal struck between Cambridgeshire and Peterborough clinical commissioning group, and UnitingCare Partnership, publishing its findings today.

Through the contract, which began in April 2015, the CCG aimed to save money and provide an improved, more integrated service for patients in the area. However, the deal collapsed after only eight months due to a “catalogue of failures”, according to the PAC, at a cost of around £16m to the parties involved.

The committee lays out a raft of urgent recommendations to avoid such “catastrophic failures” in future, such as increasing the commercial expertise within the NHS and improving oversight on the part of NHS Improvement, in the form of, for example, introducing contract safeguards.

Chief among the failures was the attempt by the CCG to hand over responsibility for commissioning to UnitingCare Partnership under the contract. This, the committee said, meant the CCG had essentially abdicated its principal role as a commissioner of local health services.  

Moreover, there was a fundamental mismatch between what the CCG expected to pay for the contract and what the partnership expected to receive.

The UnitingCare Partnership, comprising Cambridge University Hospitals NHS Foundation Trust and Cambridge and Peterborough NHS Foundation Trust, offered the lowest cost option to the CCG in the tendering process of £726m. This helped it to win the contract over its competitors. However, the partnership did not make it clear that it expected to negotiate a funding increase of 20% with the CCG as the project progressed.

In view of this, the PAC said it was “grossly irresponsible of the trusts and the CCG to rush ahead with the contract without sufficient clarity on the costs and the risks”. The contract was subsequently terminated after only eight months because the parties involved could not agree on the deal cost. 

This was a further demonstration, the committee said, of the lack of commercial skills within the NHS, which are needed in order to procure patient services effectively.

The fact that the contract was allowed to go ahead also exposes failures in the oversight and regulatory systems in the health service. The committee warned that unless these were addressed quickly, failures may reoccur in local initiatives proposed under sustainability and transformation plans.

Commenting on the report, PAC chair Meg Hillier criticised the behaviour of the CCG. “It beggars belief that a contract of such vital importance to patients should be handled with such incompetence,” she said.

“The deal went ahead without parties agreeing on what would be provided and at what price – a failure of business acumen that would embarrass a child in a sweet shop, and one with far more serious consequences.”

Hillier said that the committee was expecting the CCG to be open about how much damage had been done by the deal to future service provision and finances.

Karin Smyth, a member of the PAC, added that the failures in this case could reflect weaknesses in the NHS that could cause further mistakes.

She said: “The PAC has previously called for measures to improve commercial skills in the NHS and once again we have seen the effects of what appear to be gaping holes in its abilities.”

Smyth added that NHS leaders needed to address the lack of commercial expertise as a matter of urgency “to ensure no more taxpayers’ money is wasted on ventures that, while well-intentioned, are simply not fit for purpose.”

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