UnitingCare Cambridge Health Collapse – The Questions That Need Answering

Last week, we featured the collapse of the UnitingCare Partnership contract to deliver services for older people in Cambridgeshire, in the East of England. The commissioners, Cambridgeshire and Peterborough CCG, will now take over the service, working directly with the sub-contractors (who were actually delivering the services) now that UnitingCare have pulled out after just eight months of the contract, saying it is “no longer financially sustainable”.

UnitingCare was  structured as an LLP (limited liability partnership) formed by Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust, two public bodies themselves. Ironically, those two Trusts will no doubt still be involved in service delivery as they were also sub-contractors individually to the LLP!

This raises many questions, as we said last week. Here are some that immediately come to mind.

  • Should the warning signs have been seen in terms of the fact that so many bidders dropped out during the lengthy procurement process, including the “giants” of public service outsourcing? This report from Health Investor explained that Serco felt there was not enough funding to achieve the goals of the contract; less available than was previously being spent. Whatever you might think about firms such as Serco and Capita, they are pretty smart when it comes to knowing whether to bid for a contract.
  • The Strategic Projects Team, the NHS support organisation that ran the procurement, was also behind the Hinchingbrooke hospital contract failure. Whilst no-one would question their capability to run a very complex procurement and ensure it is EU regulations compliant, is there an issue in that they don’t have long-term “skin in the game”? They don’t have to manage the contracts and are not responsible for service delivery once the procurement is done – note the same would apply to any “consultants” in a similar situation.
  • Does this also suggest there are fundamental problems with public sector bodies contracting in a pseudo-commercial manner for public contracts? Clearly, the LLP here was not prepared to carry on taking risk or presumably delivering a contract that was losing money. Serco and Capita no doubt have some contracts that are loss making – but they grin and bear it generally. The irony is that “save the NHS” campaigners are worried about private sector firms just walking away from unprofitable NHS contracts, which is exactly what the public sector provider has done here!
  • The LLP structure also seems to have allowed the two partners to walk away from the contract remarkably easily. Are they liable for any termination penalties or payments? If so, that will be two NHS bodies paying money to another NHS body, which is a little odd. If they are not liable, was that a fault of the contract, making it too painless for a provider to pull out?
  • We understand this was an outcome based contract – that is another approach that is fashionable in health contracts at the moment. But did that contribute to the problems here? The idea is that approach will encourage the provider and reward them for success; but did the outcomes prove simply too difficult to achieve? If so, was that a fault of the specific contracting mechanism here or is it indicative of a more systemic problem?
  • The commissioner has said they want to continue with the model of integrated care that UnitingCare was implementing. So if the commissioner can make that work themselves without a “prime contractor”, then what exactly was the point of the UnitingCare contract in the first place? Was the £1 million procurement cost money wasted?
  • Or will the integrated care model prove to be simply too expensive to fund? There is a view in the NHS that this approach will lead to better outcomes and value for money, but that theory is unproven yet. This is not a good argument in favour, that’s for sure.
  • What was the governance process through which the two Trusts within the UnitingCare venture got approval to proceed with what turned out to be a very risky venture? If I was a non-executive on those two Boards, I might be asking myself some tough questions!

So, many immediate questions that really need to be addressed quickly, as other contracts of a reasonably similar nature are going through the procurement process in the NHS right now. We know that Spend Matters has regular readers in the National Audit Office (as well as in many parts of the Department of Health and NHS) – we hope NAO might put a review of this failure right at the top of their priority list.

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