Capita Medical Support Contract – Running Into Problems

Supplier issues and contractual problems in the public sector are often like volcanoes or perhaps hot springs. First of all, there is a bit of a rumbling or gurgling, but nothing too obvious. That means a few articles on specialist websites, muttering from the people involved as users or employees involved with the contract and supplier.

Then you start seeing quite detailed discussion on industry and related sites, journals, maybe even the odd mention. That’s the point at which the rumbling really gets quite obvious. Then suddenly WHOOOSH! It’s on the national news, the front page of the Daily Mail, and the politicians are saying “something must be done” in their debates. To most of the population, this will be the first they know of the issue, but others will say “we’ve been going on about this for ages”!

We at Spend Matters are sometimes part of that initial bubbling (remember Alix Partners in MOD; or conflicts of interest in clinical commissioning?) In the case of the Capita contract for Primary Care Support, I suspect we are now at the serious rumbling stage, and fully expect to see this hitting national prominence shortly.

Capita won a contract worth around £400m to take over provision of primary care support services in 2015. NHS England outsourced the administrative support service with the hope of cutting costs by tens of millions of pounds a year – the aim of saving 40% a year was mentioned at the time. The services include providing forms to GP practices, managing payments and transferring patient records between practices.

But now doctors are claiming there has been a “systematic failure” with Pulse website suggesting doctors should be compensated for the extra workload that has been dumped on them. Patient records have also gone missing, and the Information Commissioner is getting involved as stories about records being found in car parks, or lost altogether, are hitting the medical press. The courier service for records transfer appears to have been particularly chaotic.

So yet again, we wonder what went wrong with the procurement process? Capita, and their partners in the bid, City Sprint Couriers, presumably put a proposal forward that was evaluated as being appropriate and won them the contract. In practice, they appear so far to have failed to deliver against that proposal and to meet the requirements defined in the tender (we assume).

That raises one of the most fundamental issues in procurement generally. How do we know that the prospective supplier can actually do what they tell us when we are in the procurement phase? How could NHS England have known that Capita and City Sprint were incapable – at least initially – of meeting their promises outlined in their proposal?

We wonder whether the cost comes into it too. The driver here was cost savings, pure and simple. So was the proposal a “cheap and cheerful” solution, that has proved to be just a little too cheap and cheerful?

It is also a problem was outsourcing unique services. Capita has grown to some extent by taking on service delivery from the public sector where there was no existing external market exactly because it was a unique public service. The firm basically offers to take on the work, and determine quickly how to do it better / cheaper. Often they succeed. But there is no prior track record or market so it is hard to evaluate the robustness of their proposal. No bidder here for instance could say that they had an existing track record in moving sensitive medial records between GP surgeries.

Anyway, it is clearly not the finest hour for NHS England or Capita / City Sprint, and we suspect at some point we will be commenting on the almost inevitable National Audit Office report on the events here. We’ll keep an eye on progress in the meantime.

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