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16 November 2016, 00:00
A "catalogue of failures" resulted in the collapse of an £800m NHS contract to outsource care of older and mentally ill people, the Commons spending watchdog warned.
An influential committee of MPs concluded that the NHS lacked expertise in procurement and it was "worrying" that untested contracting arrangements could form part of the plans being drawn up for further changes to services across England.
The Public Accounts Committee was scathing about the doomed deal between Cambridgeshire and Peterborough Clinical Commissioning Group (CCG) and UnitingCare Partnership, which collapsed after just eight months.
The cash-strapped CCG awarded a five-year contract to UnitingCare, an NHS consortium of Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust, but the deal was scrapped in December 2015 after it ran into difficulties.
The MPs said:
"The procurement exercise was undermined from the start by poor commercial expertise, a lack of realistic pricing, and weak oversight.
The CCG accepted the lowest bid on the table, without seeking proper assurance that the two trusts, which had combined to form the UnitingCare Partnership, could deliver for that price.
It was then grossly irresponsible of the trusts and the CCG to rush ahead with the contract without having resolved significant differences in their understanding of the contract price or indeed the scope of services that were included in that price."
In a strongly-worded report the committee said the "astonishing array of errors" in the contract showed that the health sector was not "getting the commercial basics right".
The committee called on NHS England and NHS Improvement to ensure that safeguards are put in place to avoid similar problems in the wave of changes currently being planned.
Health managers in 44 areas of England have been ordered to draw up sustainability and transformation plans (STPs), setting out how they will reduce costs, change services and improve care in the wake of a record £2.45 billion deficit.
The MPs said the "elaborate" UnitingCare deal "exposed gaps in regulatory and oversight arrangements'' which could reoccur in local initiatives proposed as part of STPs.
The committee has already warned the NHS that it needed to improve its commercial skills but the UnitingCare fiasco showed it "still lacks the expertise to ensure that patient services are procured effectively".
"This is all the more worrying as local initiatives proposed in sustainability and transformation plans may still include CCGs using new or untested contracting arrangements.
"With the NHS budget so stretched, innovative solutions are likely to be part of attempts to make the NHS financially sustainable.
"NHS England and NHS Improvement must improve the oversight and supervision of contracting arrangements and avoid such catastrophic failures in future.''
The Public Accounts Committee found that the termination of the contract led to unfunded costs of least #16 million, which had to be shared between the two NHS trust partners and the CCG.
An NHS England spokesman said:
"The hospitals, GPs and community health teams in Cambridgeshire have clearly now learnt from their mistakes over this process, and nationally the NHS has now issued proper safeguards to ensure other local areas don't repeat their approach.''
Tracy Dowling, Chief Officer of the Cambridgeshire and Peterborough CCG said:
"There have been a number of published reviews into the contract failure. Each of the reviews has recognised the complexity of the procurement and each has made recommendations for all of the organisations involved, as well as the wider NHS, to learn from. We have accepted the findings from all of the Reviews. We will fully consider the recommendations in today’s Public Accounts Committee report to ensure that we have taken account of all possible learning from all the reviews.
When the contract ended the priority for all partners was ensuring the continuity of services for our patients. Making sure we deliver good quality services to those who need them remains as important to us today. We are continuing to develop services along the lines of the model in the UnitingCare contract with Cambridgeshire and Peterborough Foundation Trust and other providers of older people’s services.
In common with other areas, we are now working with our NHS and Local Authority partners to develop a Sustainability and Transformation Plan to address the challenges of a growing and aging population. This needs to be a robust plan owned by all the organisations providing health and care locally which will allow us to meet our ambitions for health and care and to make services financially sustainable.”