Commissioning

Learning lessons from the UnitingCare partnership collapse

Jenny George, director of health value for money studies at the National Audit Office (NAO), considers the lessons to be learned from the collapse of the UnitingCare Partnership.

In July 2016, the NAO published a report on the collapse of an £800m flagship contract providing older people’s services in Cambridgeshire and Peterborough, investigating the failures which eventually led to the contract’s termination after only eight months. 

On the face of it, the UnitingCare Partnership (UCP) contract seemed like a good idea. The NHS Five Year Forward View encourages innovative approaches to providing care, and this contract was certainly innovative. It aimed to provide more joined-up services for patients, focusing on their individual needs and providing a seamless journey along their pathway of care. 

Much of this care would be provided in the community, intervening to meet people’s needs earlier and to avoid them ending up in hospital. Not only that, but if hospital admissions could be reduced, then there may also be room for cost savings. 

So, what went wrong? 

All too often, the NAO’s work highlights shortcomings in public sector contracting. This case was no exception. Limited commercial expertise, combined with a lack of realistic pricing and weak oversight meant that, for all its upsides, this contract had little hope of succeeding. 

But this particular failure does not spell the end for this type of contracting. Far from it. Indeed, several similar contracts are now being tendered elsewhere. So what lessons should the health sector be learning from this experience? 

Well, NHS England has itself identified seven lessons falling broadly into four categories: commercial capability, contract design, transparency of information, and clear and joined-up systems of oversight and accountability. In its evidence to the Public Accounts Committee (PAC) in September, following the NAO report, NHS England accepted it needed to increase commercial capability to avoid basic mistakes. 

In response, the committee has asked NHS England to explain, by April this year, what specifically it has done to improve the quality of commercial skills available to NHS bodies. 

In this case, recognising the need for commercial, financial and legal expertise, the CCG engaged expert advisers. Yet important points were missed, leaving the CCG exposed to additional risks and costs. Gaining more clarity over the respective roles of advisers and making sure advice was brought together more coherently may have gone some way to averting these problems. 

The PAC criticised the CCG’s naivety in failing to assess UCP’s ability to deliver the contract for the bid price put forward, instead choosing to accept the lowest bid on the table. It quickly became clear, though, that the two parties did not have the same view of the contract costs or scope, and that UCP still expected to negotiate funding increases. 

And yet, the CCG and the trusts involved chose to rush ahead and sign the contract before reaching agreement on important contractual issues. The CCG’s failure to demand greater transparency over the true costs, and to pin down precise details before contract signature, played an important part in the contract’s collapse. 

And where was the oversight in all this? The health system has no lack of oversight bodies, but this elaborate contract set-up exposed gaps in the scrutiny arrangements. Not least, as UCP was created as a private sector body, it did not fall within any of the existing structures. Again, the PAC has asked for an update by April on NHS England’s plans for ensuring such contract arrangements can be properly scrutinised. So watch this space. 

So what does this mean for future contracts? 

Well, CCGs must remember that, in tendering these contracts, they are responsible for getting the best services for the best value. In these austere times, achieving this by going for the lowest bid may be tempting, but CCGs should make sure they challenge bidders on how they will deliver services for the proposed costs, seeking and using expert advice. And oversight bodies should work together to support the whole health system in taking forward new contracts. 

The NHS needs to make savings – that is indisputable. Integrating care and reducing hospital admissions in the way this contract envisaged might help to do this. But let’s not forget that the nitty-gritty of getting contracts right from the start and making sure there is good, joined-up oversight and accountability are key to ensuring their success.