Questions around a failed £800 million NHS outsourcing experiment

It became clear that costs were emerging which the CCG hadn’t anticipated, and which it said it could not fund.

elder_care17:22 Thursday 21st January 2016
BBC Radio Cambridgeshire

CHRIS MANN: One of the big stories of the last few weeks in the county is to do with the NHS, and that is the failed £800 million older people’s health contract. Cambridgeshire county councillors have finally been allowed to question the Chief Executives of the two trusts involved. UnitingCare was owned by the Cambridge University Hospitals NHS Trust, in other words Addenbrookes, and the Cambridgeshire and Peterborough NHS Foundation Trust. The contract was the biggest outsourcing of services in NHS history. It failed last months after just eight months of its proposed five year tenure. Well the BBC Look East Political Reporter Tom Barton has been at today’s meeting and joins me in the studio now. Hello Tom.
TOM BARTON: Good afternoon Chris.
CHRIS MANN: Extraordinary story when it happened of course, out of the blue, suddenly this contract torn up. It had taken so long to put together. So we’ve been waiting for answers for several weeks now. What’s happened today?
TOM BARTON: Well this was the first opportunity for county councillors on the Cambridgeshire Health Committee to put questions to all of those involved in this contract, which collapsed so unceremoniously just at the start of December. So on the panel were not only the two Chief Executives you’ve mentioned from Addenbrookes and from the Cambridgeshire Mental Health Trust, also the Clinical Director from the Clinical Commissioning Group, which was responsible for commissioning this contract, the Chief Executive of UnitingCare. So the company which was owned by those two NHS trusts which was supposed to be delivering this contract. And they were taking questions from councillors, not all of them necessarily terribly friendly questions. But we also learned a whole bunch of new detail about this contract, not least how much it would have cost to save it. Just have a listen to this clip from the Chief Executive of UnitingCare.
KEITH SPENCER: It became clear that costs were emerging which the CCG hadn’t anticipated, and which it said it could not fund, and which therefore from UnitingCare perspective made the contract untenable. So at UnitingCare’s request the CCG escalated the matter to NHS England at the end of November 2015 in order to explore whether financial support might be available to enable the contract to continue. And the reason why that was important was because the gap, the residual gap between us was around £9.3 million. Over the five years of the contract the UnitingCare model would save the local health system around £117 million. So we thought it was worth pursuing that.
TOM BARTON: So Chris what you’ve got there, £9.3 million it would have cost to save this contract. Of course the contract was £800 million over the five years. So yes, this was a year on year cost had they included it. But yes, that’s 1% of the whole contract value, or 5% per year if you like, but effectively not an enormous amount of money. And one of the points that was made in this meeting was that £9.3 million would have saved a contract which should have saved the NHS in Cambridgeshire £117 million. So you know the amount of money it would have cost to save that money, to many people would look like a trifling amount.
CHRIS MANN: This is a select committee procedure, a bit like you see in the House of Commons …
TOM BARTON: Yes. Very similar.
CHRIS MANN:.. where the county councillors at a local level get to question these people. How hostile was that questioning today?
TOM BARTON: It was .. I think I’d describe it as forensic rather than hostile. I got the impression that the councillors were really in the market for finding out, trying to get to the bottom of what had gone wrong, rather than just giving those executives a hard time.
CHRIS MANN: Well the key questions that I was trying to get answers from in the two interviews I’ve had with Neil Modha who runs the CCG is number one, who pulled the plug first of all. Which side of these two partners said we’ve had enough, we’re getting out of here. Do we know that yet?
TOM BARTON: No, but we heard a little bit more detail in that clip. So effectively the way it appears to have played out is that the two hospital trusts had put money, extra money of their own, into this contract. We’d learned today that they’d each lost £4 million as a result of this contract. They had then reached the limit of effectively what they were able to put in. They’d gone to the Clinical Commissioning Group and said, you put more money in. They put some more money in, we think in the region of £12 million. So that’s £20 million that had gone into this. At that point they say they’d reached the limit of what they could put in, and so they all then went cap in hand to NHS England, which is the body which oversees the whole of the NHS in England. And NHS England said no. And it was at that point, as I understand it, that the contract fell apart.
CHRIS MANN: And at the same time of course, the CCG which was giving them money was also fining Addenbrookes for failing targets in other areas.
TOM BARTON: Of course. And actually when you look at the way this contract was set up, those fines may have been being handed out, but actually the whole point of this contract was to save all parts of the NHS money. This figure, £117 million that it should have saved the NHS, is something we’ve only heard in the last week or so. And those savings would have come not just in delivering these services on the ground more efficiently, but actually keeping people out of Addenbrookes Hospital A&E, keeping people out of Peterborough Hospital A&E, keeping people out of the Mental Health Trust. And all of that money, which of course when you’ve got the Mental Health Trust and Addenbrookes running those services, would have helped them as well. And so really big questions remain about all of this.
CHRIS MANN: The biggest question is what happens going forward. Are they going to put it out again to tender? Will there be other companies bidding?
TOM BARTON: No they were very clear today, and when I’ve spoken to them they’ve been clear as well. They’re not going to put all of this back out to tender. Instead they’re going to effectively do what they can to carry on running this in-house. The question of course, the big question, is UnitingCare couldn’t afford to keep running this, how on earth can the Clinical Commissioning Group? But then on top of that I suppose the big remaining question is what happens after the start of April? At the moment all of the contracts which were in place with all of the people on the ground delivering this service are still there. They’ve got to be renegotiated before the start of April. And only if they can do that, they can do it for the amount of money that the CCG has at its disposal, will they be able to carry on delivering all of these services.
CHRIS MANN: It’s a mess some might say. We shall see. Look forward to more of that. Tom Barton, thank you so much. BBC Look East Political Reporter.