interviews

‘Nobody gives us any money – we literally have to win work’

NHE talks to John Parkes, managing director of NHS Arden & GEM Commissioning Support Unit, about the challenges that come from being both part of the NHS and a supplier to it, in competition with well-resourced private firms.

At one stage there were going to be 25 commissioning support units (CSUs) for England – but after a series of evaluations, checkpoints, mergers and tender competitions, there are now in effect just six. 

These are the six CSUs that were successful at getting onto the all-important Lead Provider Framework (LPF) earlier this year, alongside three private sector giants. The two CSUs that failed to get on the main ‘Lot 1’ of the LPF are now in transition arrangements, and are having to close down. 

One of the six successful CSUs was NHS Arden & Greater East Midlands (GEM). Its managing director, John Parkes, surprised us by saying of the long and complex journey of getting onto the LPF: “I actually enjoyed the process. And for those of us who did get on, the six NHS CSUs and the three private sector providers, I looked upon it in effect as us being given a ‘licence to operate’. 

“For those who didn’t get on, we’ve obviously seen the resultant impact that that has had on them, and has had on the customers they were previously serving.” 

Arden & GEM has been the direct beneficiary of that, in a way – the day before our interview with Parkes, his CSU announced it had won a contract worth just under £2m to provide data management services to the 24 north west CCGs, previously serviced by their own CSU. Under the terms of the deal, NHS Arden & GEM will also operate the Data Service for Commissioners Regional Office (DSCRO), which provides the secure infrastructure and analytical expertise needed for healthcare data processing and data management, including handling patients’ confidential data. About 25 staff from NHS North West CSU, which is closing down, will be transferred across to Arden & GEM. 

That shows how vital the LPF process was, Parkes suggested. “It was really important. We wanted to not just ‘scrape across the line’, but to demonstrate what we could do, and what we do well. Capturing that and putting it into our submission was, yes, on one level time-consuming, but it was actually I thought an enjoyable process because it made us think about what is really good practice, where are we on that spectrum, what could we be doing differently, and making sure that we’d captured that in our submission.” 

Retaining existing customers and attracting new ones 

Arden & GEM has more than 1,500 staff based at 12 offices around England, including a head office in Leicester (pictured overleaf) plus some outside its core region, in Chester and Salford. It has 37 ‘core’ CCGs (where the CSU is their largest supplier of commissioning support services), across Buckinghamshire, Derbyshire, Essex, Leicestershire, Lincolnshire, Northamptonshire & Milton Keynes, Nottinghamshire, Warwickshire and Worcestershire, and offers some kind of service to 68 CCGs in total. 

After the north west win, we asked Parkes whether he thought the future would open up more opportunities for the CSU to offer more services outside of its ‘patch’. He said “yes”, adding: “We’ve never been confined by geography per se, but with the way that the LPF is now developing, there is a more competitive environment where we will need to look at opportunities outside of our current geography.” 

But, he said, the CSU would retain a strong focus on its existing customers – admitting that “inevitably” some will decide to change. “We will win some work, we may lose some existing work, but we’re looking to retain current customers while being selective about where we bid. That is probably where we’re at.” 

Parkes spoke of the need to “recruit and retain and develop really good people”, hinting that people from other CSUs would always be welcome to apply. 

A shift in secondments 

Parkes noted a shift in CCG attitudes in what they want from their CSU, from prioritising bespoke, embedded services, to placing greater priority on quality and cost. Asked how many of his staff were working directly with CCGs, he explained: “We have a mixed model, and are beginning to see quite an important change there. Initially, customers were saying ‘we really want the following functions embedded’, whereas now they’re saying ‘if you could do this more at-scale, and it results in a reduced cost, then we’re willing to give up the level of embeddedness that we might have had in the past, in order to come up with a more cost-effective proposal’. 

“Some staff will always be inevitably working in the geographies where the customers and the patients are. Take, for example, the clinical staff in continuing healthcare: you would always want them out and about in the customers’ geography. But the scheduling and other functions can be done anywhere.” 

Full spectrum 

When NHS interviewed Keith Douglas and Jan Hull at NHS South, Central & West CSU earlier this year, they admitted that the new competitive marketplace and reality for CSUs meant they were re-examining the services they were offering and their strengths and weaknesses. As far as Arden & GEM is concerned, Parkes said: “At this point in time, we’re still wanting to and able to offer the full spectrum. But depending upon how the market develops, you might actually find that with ‘service X’, others are able to offer it in a different way, or a most cost-effective way, and we would obviously have to respond to that either by changing the way in which we operate, or saying, for this particular area, we just can’t make the margin we would need to make in order to be able to operate it effectively. 

“So, I think it’s early days. We certainly haven’t got to a place where we’re saying we don’t want to provide ‘service X’, and, actually, being able to provide everything at this point in time is not disadvantageous to us. But how that market develops will have an impact on whether we can all do everything.”

That question of how the market develops is also key to the future of commissioning support, Parkes said, saying the viability of all the NHS CSUs and private sector companies on the LPF ultimately depends on whether they win work. 

“If a CSU or even one of those private sector companies doesn’t win work [and] loses lots of existing customers, in any scenario, there will always be a financial tipping point where you slide into being non-viable,” he said. 

Parkes “doesn’t have a view” whether nine providers is the “right number”. “It will be the market that determines that,” he told us. 

“For us, what size really does is give us economy of scale. [It gives us] a greater mix and spread of staff, greater resilience, and a greater and deeper level of expertise. If a CCG is thinking about, for example, in-housing a particular service, then because of our size we can look to demonstrate better value for money, better capacity and capability, and better resilience, and if we can do that we should be in a good position to carry on winning work.” 

Running a very small CSU would be tricky, Parkes said, because losing just two or three key customers could tip it into unviability, whereas a bigger CSU can deal with short-term difficulties like that. 

The fact that CSUs have turned out to have to be so large to be viable would have surprised those writing the guidance for them in 2013, when the NHS Commissioning Board, as NHS England was still then known, decided that 23 CSUs were all “viable in terms of scale”. 

Specialised offer 

The CSU offers a number of core services to its clients, including finance and HR, communications, continuing healthcare, business intelligence, data management, and transformative work on new models of care. 

It also hosts two nationally-important organisations: Solutions for Public Health, and the Strategic Projects Team (SPT). 

The SPT, whose director Andrew MacPherson sits on NHE’s editorial board, has been responsible for a number of major procurement exercises across England, and also played a driving role in the creation and national roll-out of the Friends & Family Test. 

Both the SPT and Solutions for Public Health are “important to us”, Parkes said, allowing the CSU to offer expertise in “really interesting specialised areas”. 

Relationships 

On its website, Arden & GEM CSU also promotes its “key supply chain partners” across the fields of business support, transformation and redesign, procurement/provider management, and communications and engagement. These include charities and social enterprises, as well as SMEs, but also giant private companies like Capita, Optum, KPMG, McKesson, Deloitte and Mott MacDonald – some of which have a place on the LPF in their own right. 

Parkes told us: “For us to put in a successful bid in another part of the country, we might need to be able to do that with somebody else, to give us the capacity or some additional capability. 

“In some areas, we would also like to be able to co-bid with some of our NHS CSU colleagues; again, perhaps, to give more capacity that we might need to move into a different area.” 

Sometimes that pressure to work with commercial partners comes from CCG clients too, he added, allowing his CSU to ultimately be “even more responsive to customers”. 

Understanding customers and building relationships is vital, Parkes explained – not just the current challenges they’re facing and what they’re passionate about, but also their history, infrastructure, IT system and so on. 

Trying to get on top of all that detail with potential new clients is one challenge when deciding whether or not to bid for work that comes up via the LPF, he suggested. 

‘We are part of the NHS’ 

Parkes and his team now operate in a resolutely competitive world, and cannot fall back on government funding or expect a bail-out if they fail to compete. 

“Nobody gives us any money – we literally have to win work. And having won the work, we have to obviously meet the customers’ expectations, whilst also generating a profit, or margin – some people struggle a little bit with the notion of us having to make a profit. But the reality is that the ‘profit’ we make is reinvested into the NHS.” 

Asked if he felt part of the NHS, he told us: “Both personally and for the majority of the staff, they are passionate about being part of the NHS. We are part of the NHS: we uphold the NHS Constitution and public sector values. All of those elements I think are, and always will be, really important.” 

Generating ‘profit’ within the NHS creates funds that can be used to either develop new services and products, or to develop and invest in staff, Parkes said. The fact that the money the CSU makes is reinvested into the NHS “is something that the staff absolutely can buy into and understand”.

“I’m not saying that if your profit goes to shareholders it’s the end of the world, but it is a very different model to the one that I think most of my colleagues would be able to completely empathise with.”

FOR MORE INFORMATION

W: www.ardengemcsu.nhs.uk

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