Cambridge Health Provider Collapse Cost CCG £10 Million

We featured here the story of the collapsed contract for health services in Cambridge, triggered when the “supplier” – UnitingCare, a joint venture between two NHS Trusts – pulled out of the contract seemingly because it was uneconomic for them to continue, only 8 months into the contract period. In that article, we also asked a whole range of questions that need answering about the fiasco.

Whilst we await the results of various investigations into what happened and why, it has become clear that this has been very costly for the commissioner of the service, the Cambridgeshire and Peterborough Clinical Commissioning Group. In a recent report to the CCG governing body, the chief clinical officer Dr Neil Modha (who has resigned) said that the CCG now has a £14.8m deficit, caused to a large extent by costs of £9.97m costs from the termination of its contract with UnitingCare. Those costs come from the CCG having to contract directly with replacement providers, although those are in the main the same providers who would have been working in the UnitingCare supply chain.

This brings us right back to some of the key questions. Why did the CCG accept such a large amount of risk in the contract? It is hard to believe that if the supplier had been a private sector firm (Virgin or Serco maybe), they would have been allowed to walk away so easily and dump responsibility back onto the CCG. Did normal commercial and contracting good practice get ignored because it was an NHS provider, or because there was such as strong desire to “do the deal” that those risks seemed acceptable?

These issues will also throw the focus back onto the Strategic Projects Team, the internal NHS consulting group who have been involved in a number of controversial contracting processes, including the Hinchingbrooke Hospital fiasco as well as this example. And indeed the law firm who were advising the CCG might feel a little vulnerable; let’s hope for the sake of their reputation that they properly identified the contract risks to the CCG.

The Guardian also reported that Monitor, the NHS Regulator, had doubts about the contract and “only gave it the go-ahead the day before the launch. There were 34 outstanding issues remaining to be negotiated ...” they reported, based on papers submitted to Cambridgeshire county council’s health scrutiny committee

How can you go ahead with 34 issues still to be negotiated? There’s yet another question that will need to be answered, particularly in the case of the independent NHS England review. We look forward to publication with great interest!

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