Health Service Focus

Lack of oversight: the monitoring of contracts for outsourced NHS services

Sam McCaffrey reports on the difficulty of holding NHS commissioners and their contractors to account in a world of commercial confidentiality.

“The information you requested is being withheld in reliance on the exemption at section 43(1)(a) of the Freedom of Information Act because it is commercially sensitive material…” 

In a not-too-distant future, that could become the standard response to FOI requests made to CCGs, CSUs and other NHS organisations that manage contracts for the outsourcing of healthcare services. 

This is a major concern for Professor Colin Leys from the Centre for Health and the Public Interest (CHPI). Prof Leys, an emeritus professor at Queen’s University, Canada and honorary professor at Goldsmiths, University of London, was part of a team from the CHPI that put together a report examining how CCGs monitor and enforce contracts that outsource services to private providers. 

Analysing the responses to FOI requests sent to 211 CCGs, the authors of the report discovered a number of worrying trends – from the 60% (of the 181 CCGs who responded) that said they did not record how many site inspections they undertook of outsourced services, to the 12% that said they did not carry out any inspections at all. 

They also discovered a reluctance among CCGs to enforce their contracts with the private sector, with just 16 CCGs saying they had imposed any financial sanctions based on poor performance. 

An independent review of contract-handling capacity 

In its report, the CHPI calls on NHS England to commission an audit of CCGs’ capacity to monitor and manage contracts with non-NHS providers. 

However, Prof Leys’ idea of what form the review should take is rather intensive. He cited Sir Bruce Keogh’s review of the 14 hospital trusts that were fingered as outliers based on the hospital mortality data. “When he did that those inspections were celebrated because they were novel,” he said. “He took about 30 people on each visit with a variety of qualifications, and they talked not only to the patients and staff, but they had this professional interpretation of what they were seeing. 

“Whether those inspections produced good results or not is not for me to say, but an independent review of capacity to handle contracts would be something like that in my thinking.” 

He also has a very clear idea of the questions he’d like to see asked. “What are the pay scales of the people doing the monitoring? What qualities have they got? How much commercial experience have any of them had? What are the professional qualifications they bring to it? How much time do they devote to it? How is it structured? If they’re not doing site visits, how can they possibly know what is really going on? These are the questions they should be asking.” 

Even with all those questions needing to be asked, the most worrying finding of all from the report was how many CCGs contract out their contract monitoring function to CSUs, something which could have alarming consequences for the transparency of public funding if NHS England follows through on its plans to privatise CSUs. 

“A very interesting question is how the accountability will be affected when CSUs become private companies,” Prof Leys told NHE. 

“Under the law CCGs have an obligation to provide information under the Freedom of Information Act (FOIA). If they give the work to CSUs to do, and if CSUs become private companies, and if CSUs are not subject to the FOIA – that in effect means that any public organisation that outsources its own work would relieve itself of its obligations under the FOIA.” 

Exacerbating an existing problem 

CCGs now spend 16% of their care budget in the private sector and have statutory responsibility to manage, monitor and enforce some 15,000 contracts with private providers. 

The CHPI suggest that NHS England should reconsider its plans to privatise the contract monitoring of NHS contracts. It points out that CCGs are the statutory bodies responsible for enforcing contracts between the NHS and the private sector, not CSUs, which remain unaccountable if anything goes wrong – and this problem will become exacerbated if CSUs become private companies. 

Even with CCGs and CSUs still public bodies able to be held to account through FOI, the CHPI still had several of their requests denied, with commercial confidentiality cited as the reason. 

Prof Leys continued: “The thing that really bothers me is the question of accountability, because the resources involved here are huge by any standard: we’re already looking at £10bn of public money. A public decision needs to be made as to whether this is an acceptable process – that anything you outsource to a private provider escapes the provisions of the FOIA. Or if it does, then what other mechanism is going to be found to assure ourselves?” 

Whose information? 

It is an issue that also concerns the Information Commissioner’s Office (ICO), addressed by Steve Wood, head of policy delivery, in a recent blog post. He points out that the FOIA provides for “the disclosure of information held by public authorities or by persons providing services for them”, which would seem to include information held by any contractor – in this case the CSUs holding information for the CCG. 

However, he adds that in practice it can be complex. He uses the example of a local authority that contracts out the management of a leisure centre to a private company: “Is information about the number of people using the gym the company’s information, or does the company only hold it on behalf of the local authority, because it’s delivering the contract? If it’s the former, then a resident who wanted to compare usage of the gym before and after the contracting out could not use FOIA to obtain that information.” 

While that scenario might seem small-scale, it is easily applicable to the situation between CCGs and CSUs. 

Wood adds: “The concern is that if significant information about the operation and delivery of public services is no longer covered, then we are witnessing a gradual reduction of the scope of FOIA.” 

He said that it is an issue the government is aware of and has attempted to address with the recent UK National Action Plan for open government, which commits to “take steps to ensure transparency about outsourced services is provided in response to freedom of information requests”. 

This is going to be achieved through the use of contractual provisions, which Wood describes as “the most realistic solution”. 

However he adds that for those to work, “a significant step forward from the general clauses we currently see in contracts” would be needed, in two areas particularly. 

“Firstly, we need standard contract terms that are more explicit about who ‘holds’ information in FOIA terms. This is not the same as specifying that certain information ‘must’ be released in response to a FOIA request – each request has to be considered on its merits and exemptions may apply – but it would give clarity on where the public authority has a right of access to certain information, or whether information reverts to the authority on termination of the contract. 

“The second area is consistency. We’ve observed inconsistency and sometimes a lack of real partnership working between the public sector commissioners with their outsourcing provider. Over-caution can dominate from either side. A ‘transparency by design’ by approach is needed, with both working closely together to agree an approach to information held, disclosure in response to requests and proactive disclosure, within the letter and the spirit of FOIA.” 

‘Deeply concerned’ 

The fact that the issue is firmly on the radar of the ICO should be some comfort to Prof Leys, but some NHE readers are not so easily reassured, as they see their ability to perform their role of oversight and scrutiny inhibited. 

Cllr Martin Klute, of Islington Council, commented on NHE’s original news story on the CHPI report. 

He said: “Having been involved in health scrutiny since before the implementation of the Health and Social Care Act, I have been deeply concerned about the fragmentation of commissioning brought in by the Act. 

“We established that the commissioning functions of the combined North Central London CCG were reallocated to 16 different organisations on 1 April 2013. We also learned that NCL CCGs were delegating their commissioning to the North and North East London CSU. 

“The fragmentation of services has been damaging enough, already making scrutiny very difficult, but if the government forces the CSUs to go private, we will lose any scope at all to scrutinise them. There is absolutely no justification for privatising CSUs, and good reason for not doing so.”

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