Manchester NHS Contract Causes Some Controversy

It’s no exaggeration to say that this might just be one of the most significant contracts for the health of the nation – and of the UK’s NHS – ever let. Manchester’s health leaders have launched a tender process, they want a “local care organisation” to provide of “out of hospital” health and care services across the city under a contract worth nearly £6bn – almost certainly the largest NHS services tender ever advertised.

Now the current provision no doubt involves many different organisations, some NHS, some private and some voluntary sectors. So this will be presumably a “prime contractor” type arrangement, with someone managing those various providers to actually deliver the front-line services. Now that isn’t necessarily a model that is wrong, but it does raise some obvious questions, even more so when budgets are getting tighter. There is also the question of whether Manchester has the capability to manage the tendering process, and indeed to the manage the provider effectively.

We asked for a comment from a friend who is a genuine and deep expert when it comes to what is going on in the NHS. He pointed out that the closest comparators are the elderly care contract that collapsed in Cambridge (UnitingCare),  the Circle Hinchingbrooke contract (also collapsed), a cancer care contract in Staffordshire that NHS England paused last year (not sure on the latest on that one). So there is a track record that does not inspire confidence!  Virgin Care has won contracts to provide community services, but nothing on this scale.

Our source says that the likely bidders are NHS organisations (acute trusts or community trusts) or large private sector health providers such as United Healthcare, and the objectives will be around providing an integrated health pathway, and shifting resources towards public health and prevention (and hence saving money in the long run).

It will almost certainly be an outcomes-based commissioning venture, which is fine in theory, but we saw how that can go wrong in some of those other cases. If the “financial envelope “is very tight, who will be able to deliver the outcomes that are being sought, take on the real risk of not hitting the targets, and settle for what might not be very generous returns even if all goes well?

Roy Lilley, another real expert, hates the whole idea (see his article here). We’ll keep an eye on this anyway, and it raises again the question of the role of Cabinet Office and the government Chief Commercial Officer, Gareth Rhys Williams. Does he have any remit over this or is it too distant from Westminster for people there to worry about? What we can say is that it is far more significant to the taxpayer, the citizen – and perhaps the government’s own future – than any contracts for “common goods and services” being let by the centre. Does that suggest something about allocation of skilled commercial resource? It’s a tricky one …

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  1. Stephen Heard:

    As Peter knows I spent some time at the old OGC Buying Solutions before moving into the NHS and becoming involved on the fringes of the Hinchinbrook procurement as a participant in the beauty parade of potential providers when at the old Cambridgeshire PCT. I was also right in the middle of the Cambridgeshire fiasco later when acting as an interim representing two NHS Community Trusts working with Care UK in the consortium that came third.

    My view of this is that the deal is probably already done in principle with the new enlarged Manchester acute hospital just as it was in Cambridgeshire with the in house bid from the shadow Addenbrookes organisation that was Uniting Care. If this is the case then they should come clean and stop wasting the huge amounts of public money, in excess of £10m in bid costs at least if Cambridgeshire is anything to go by, and integrate the whole system. It will not work if the Manchester acute hospital bids and doesn’t win as they will be critical to the success of the whole thing.

    It is also likely that the whole provider/commissioner split will be abolished during the process, which incidentally will not happen in the proposed time frame, so why not accept the inevitable. Roll on retirement.

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