14.07.16
FYFV endorsement of integrated care risks approving more ‘UnitingCare deals’ – NAO
The collapse of the major £800m outsourced deal awarded by Cambridgeshire and Peterborough CCG to two NHS foundation trusts has highlighted weaknesses in the contract process that must be resolved during the implementation of the Five Year Forward View (FYFV), the National Audit Office (NAO) has said.
In its final report into the failed contract, the NAO said that the CCG was exposed to increased financial risk under the contract, because the contractual and termination clauses passed financial risk from UnitingCare – a consortium between Cambridgeshire and Peterborough NHS FT and Cambridge University Hospitals NHS FT – to the CCG. There was also no clear understanding between the CCG and UnitingCare on how far UnitingCare was allowed to negotiate additional funding.
In addition, the CCG did not secure a patent guarantee from the consortium, leaving it more vulnerable to financial failure, because it was not advised to do so in the procurement process.
A lack of data also meant that neither UnitingCare nor the CCG could assess whether the final price of the contract was viable.
The five-year contract for elderly people’s services collapsed after just eight months when it was found to be financially unsustainable, prompting an NHS England investigation that its CEO, Simon Stevens, said signalled a “very important moment for the whole of the NHS”.
The failed contract cost the CCG £10m and contributed to its deficit.
Today, the NAO warned that more large-scale contracts for providing integrated services are likely to be seen as part of the Five Year Forward View recommendations, and that these could also be vulnerable to collapse unless the current blind spots in the process are reviewed.
The Department of Health, NHS England and NHS Improvement are currently developing a model for the overview of similar contracts.
However, the auditor’s report said: “NHS England’s FYFV encourages the health sector to use new and more joined up ways of providing care, which may not always align with existing regulatory and oversight arrangements.
“Without closer joint working or a more holistic view, there are significant risks for the sector that individual oversight decisions will not lead to the best outcomes for patients or for the system as a whole.”
Amyas Morse, head of the NAO, added: “This contract was innovative and ambitious but ultimately an unsuccessful venture, which failed for financial reasons which could, and should, have been foreseen.
“It had the strong potential to join together all bodies in the local health economy and to deliver better patient care. However, limited oversight and a lack of commercial expertise led to problems that quickly became insurmountable.”
NHS England’s review of the failed contract has already said that there should be a review into how CCGs negotiate major contracts.
Earlier this year, NHE published an in-depth look at what the collapse of the UnitingCare deal could mean for NHS contracts.
(Image c. Chris Radburn from PA Images)
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