The government watchdog described the handling of a contract to provide primary care services as putting patients 'at risk of serious harm'
The Public Accounts Committee (PAC) has attacked the “short-sighted rush” by the NHS to cut costs by outsourcing the provision of primary care support services.
The NHS attempted to cut by more than a third the £90m cost of providing services to 39,000 doctors, dentists, opticians and pharmacists, including administering payments to healthcare professionals, confirming that doctors, dentists and opticians were suitably qualified, and processing patient registrations and de-registrations. It entered into a seven-year, £330m contract with outsourcing company Capita to take over these duties.
The committee took evidence from Simon Stevens, chief executive of NHS England; Jonathan Lewis, the Chief Executive of Capita plc; and Stephen Sharp, the Executive Officer of Capita Government services. In examining the nature of the contract it found that Capita’s bid depended on closing a number of local primary care support offices and ‘delivering a major transformation of services’ to meet NHS England’s budget constraints. It found that neither NHS nor Capita ‘fully understood the service being outsourced, including the volume and scope of services, and the ways in which services were being delivered differently across the country’.
It also found that both parties ‘ignored many of the basic rules of contracting, and, once problems emerged, did not do enough to stop the issues from getting worse’. It criticised them for engaging in protracted disputes over basic aspects of the contract and criticised the NHS in particular for ignoring previous information provided by the PAC, negatively impacting both patients and practitioners.
The PAC recommended that the NHS should evaluate the way it handled contracts and report back to the committee in January 2019. It urged the NHS to look at existing outsourcing projects that work well and set appropriate performance measures. While acknowledging that Capita apologised for its mistakes, it criticised the company for failing to gather the necessary information and for not identifying the many potential problems inherent to the project before signing the contract.
In examining the contract it found that the company expected to make losses of £64m in the first two years of the contract and was strongly incentivised to close offices and reduce staff as quickly as possible. In the 11 months leading up to November 2016 it closed 35 of the 38 offices it inherited, resulting in the loss of local support and expertise and affecting patients. Despite these actions, Capita made a loss of £125m in the first two years and no longer expects to make a profit from the contract.
Committee chair Meg Hillier MP criticised both parties for the way that the contract was handled, describing the situation as a ‘complete mess’ and saying that it is ‘clearly unacceptable that poor procurement should put patients at risk of harm and undermine the ability of GPs, dentists, opticians and pharmacists to do their jobs’.
‘NHS England needs to rethink its approach to outsourcing and invest time in getting its contracts right. That means listening to concerns from the frontline and properly considering the impact changes will have on services and public health. But it also means establishing an effective relationship with the supplier.’
Capita, which handles a large number of government contracts, issued profit warnings in January and announced plans to sell off a number of non-core businesses. At the time Jonathan Lewis described the company as ‘too widely spread across multiple markets and services’.
Reported by James Bunney