NHS procurement slammed after £800 million contract collapsed
NHS procurement slammed after £800 million contract collapsed
The Public Accounts Committee has concluded that the NHS lacked proper procurement expertise and said that a "catalogue of failures" led to the ruin of an £800 million contract to outsource the care of mentally ill and elderly people.
The Commons spending watchdog delivered scathing remarks about the deal between the UnitingCare Partnership and the Cambridgeshire and Peterborough Clinical Commissioning Group (CCG). The contract was supposed to last for five years but fell apart after just eight months.
The Committee said: "The procurement exercise was undermined from the start by poor commercial expertise, a lack of realistic pricing and weak oversight.”
Referencing the two trusts that comprise the UnitingCare Partnership -- the Cambridge University Hospitals NHS Foundation Trust and the Cambridgeshire and Peterborough NHS Foundation Trust – it continued: "The CCG accepted the lowest bid on the table without seeking proper assurance that the two trusts, which had combined to form the UnitingCare Partnership, could deliver for that price.
"It was then grossly irresponsible of the trusts and the CCG to rush ahead with the contract without having resolved significant differences in their understanding of the contract price or indeed the scope of services that were included in that price."
The Committee also requested that NHS England and NHS Improvement establish safeguards in order to prevent the occurrence of similar situations during a wave of proposed changes. Health managers across England have been told to produce sustainability and transformation plans (STPs) that detail their strategies for lowering costs, improving care and changing services in the wake of the NHS’ record deficit of £2.45 billion.
In addition, the Committee’s report said that the UnitingCare collapse showed that the NHS does not have the necessary expertise to effectively procure patient services. It expressed concern that untested or entirely new contracting terms for local transformation and sustainability initiatives may continue to involve CCGs.
The Committee stated that because the NHS is operating on a stretched budget, it is likely to attempt using innovative solutions in order to ensure financial sustainability. Failures such as the collapsed deal can only be avoided in future by improved supervision of contract negotiations on the part of NHS Improvement and NHS England, the Committee concluded.
