Significant Contract Awards 2015

Commissioners in the NHS, CCGs, Trusts and NHS England, have put out to tender a large amount of business in monetary terms. These are some of the large contracts that were awarded in 2015.

 

£1 billion for Primary Care Support Services

In September 2015 Capita took control of a contract worth £1 billion to be the provider of primary care support services in England. The contract is a sole provider framework contract and Capita has the option to sub-contract out the work. The contract is worth around £1 billion over the first four years, but the entire contract could be seven to ten years and worth around £300-400 million per year.

Under the contract Capita is expected to make significant cost savings, reducing the cost of the service by 40%.

Capita plans a phased closure of 29 offices by October 2016, putting 720 permanent jobs in doubt and leaving just two of the existing NHS facilities providing the service. The redundancy bill could be more than £30 million.

The deal was opposed by the British Medical Association; doctors fear that practices would lose the relationships they rely on with primary care support staff.

Primary Care Support services include medical records management, payments administration, and report services for screening. Capita’s track record working for the NHS is chequered; in February 2015, Capita was found responsible for a breach of NHS employees’ personal data during the time it was providing human resources services to nine trusts in Liverpool and in September 2014, West London Mental Health NHS Trust cancelled its contract for human resources services after Capita proved “unable to meet acceptable ‘time to hire’ targets,” particularly for nurses.

In 2015 Capita also won an £80 million, 10-year contract providing IT, finance and estate management services to the Central London Community Healthcare NHS Trust. With over 3,000 staff, CLCH is the largest community healthcare services provider in London. It provides care for more than one million people across Westminster, Kensington & Chelsea, Hammersmith & Fulham and Barnet.

 

£5 billion for the Framework Agreement for Commissioning Support Services

Several companies and commissioning support units (CSUs) were awarded places on this £5 billion four year contract in February 2015. The winners of places on the major part of the contract forc are eight CSUs, plus Capita, Optum (plus BT and KPMG) and MBED – a consortium of Mouchel, BDO, Engine and Dr Foster. Two CSUs, North West CSU and Yorkshire and Humberside CSU, were omitted from the framework and this has cast doubt over the future of the organisations and their 2,200 staff. Capita and Optum also won a share of the medicines management portion of the framework agreement along with several CSUs.

 

£280 million for the East Staffordshire elderly care contract

In March 2015, Virgin Care was awarded a £280 million, seven-year prime provider contract in East Staffordshire, to coordinate services for frail elderly patients, those with long term conditions and intermediate care. The contract, supported by 19 East Staffordshire GP practices, will come into effect from April 2016 and serve around 38,000 people with long term conditions as well as an estimated 6,000 frail older people. East Staffordshire CCG is reported to have chosen the prime provider model because of expected increases in demand and costs, which Virgin Care will have to absorb over the seven years. The CCG have also said that Virgin Care will coordinate services across providers to deliver agreed outcomes, although it has not published what these outcomes are.

 

£238 million for Community Services in Huddersfield and North Kirklees

In July 2015 the Community Interest Company Locala Community Partnership won a five year contract to run community services in the Huddersfield and North Kirklees area. The contract, worth £238 million, is part of the Greater Huddersfield and North Kirklees CCGs ‘Care Closer to Home’ initiative to reduce A&E admissions and hospital stays. The contract covers a wide range of enhanced care services, services over and above the previous community care services provided by Locala (and in its previous incarnation as Kirklees Community Healthcare Services). Locala was set up in October 2011 as a mutual company with membership of staff and local people and employs around. The contract could be extended for a further two years and is a prime provider contract, under which Locala can sub-contract to other service providers.

Although integrated care closer to home is an admirable aim, unfortunately the awarding of this contract for enhanced services to Locala will have a knock-on effect on the local hospital trust Calderdale and Huddersfield Foundation Trust, which is estimated to be losing about £5 million in income due to the loss of contract work.

This is bad news for the Foundation Trust as it is struggling with a mountain of debt due to the use of PFI to build the Calderdale Royal Infirmary under a 1997 contract; the hospital cost £65 million to build yet by the end of the PFI contract in 2058 the Trust will have paid £770 million. The PFI payments are financially crippling for the Trust and restructuring is underway to cope with its mounting debt. In January 2016 a decision was in the process of being made as to which A&E to close – Huddersfield or Calderdale. What appears to be the favoured plan is the closure of Huddersfield A&E and demolishing of the hospital.

A new hospital built in the area would not have A&E services. The Trust has for years been trying to negotiate its way out of the PFI contract to no avail. A clause which would allow the Trust to buy its way out of this 60 year contract for £200 million does not come into effect until 2038. There are also problems with negotiating with the complex ownership structure that owns the PFI debt.

 

£246.8 million for Community Care in North Essex

In December 2015, Anglian Community Enterprise was awarded a seven year contract for £246.8 million to provide community care in North Essex. The award by North Essex CCG is for a lead provider contract for what are termed “Care Closer to Home Services”, a model of care designed to reduce A&E visits and reduce hospital stays. ACE is a social enterprise, which also holds a number of APMS contracts for GP surgeries, the most recent of which was a ten year contract for the Caradoc surgery in Frinton-on-Sea awarded in December 2015, and runs weight loss schemes and the health visitor service in the area.

 

£120 million for Community Care in North Somerset

North Somerset Community Partnership (NSCP) was awarded a five year contract in October 2015 worth £120 million to provide community care services across North Somerset. The contract from North Somerset CCG will involve introducing a new model of community healthcare services, including the provision of almost 30 services covering adults and children. NSCP is a social enterprise that was formed in 2011, as such it does not make a profit. NSCP also has a business division Partner2Care, which is also run on a not-for-profit basis but provides paid-for services, such as podiatry, acupuncture and physiotherapy. A major target market for the business is people with personal health budgets.

 

£185 million for adult community health services in Wiltshire

In December 2015, Wiltshire CCG awarded Wiltshire Health & Care the £185 million contract to provide adult community health services in Wiltshire for the next five years. As of July 2016, the services currently provided by Great Western Hospitals NHS Foundation Trust, which include, among others, services such as Core Community Teams; Outpatient Department Services; diabetes and fracture clinics, will transfer to Wiltshire Health & Care. Wiltshire Health & Care is a new organisation formed by Great Western Hospitals NHS Foundation Trust, Salisbury NHS Foundation Trust and Royal United Hospitals Bath NHS Foundation Trust.

 

£64 million for child health services in Wiltshire

In October 2015 Virgin Care won a five year £64 million contract to provide community child health services in Wiltshire from Wiltshire CCG, Wiltshire Council and NHS England. As of April 2016, services including, children’s specialist community nursing, health visiting and speech and language therapy will transfer to Virgin Care.

 

£190 million for Mental Health and Learning Disability Services in York

In August 2015 the Tees, Esk and Wear Valleys NHS Foundation Trust was awarded a five year contract to provide mental health services in the Vale of York worth £190 million. There was, however, controversy with the award; Leeds and York Partnership Foundation Trust wrote to Monitor detailing concerns about the process run by the Vale of York CCG. The Trust was concerned that there was a conflict of interest as the CCG’s mental health lead, Louise Barker, was a member of the assessment panel despite her partner working as a consultant psychiatrist for Tees, Esk and Wear Valleys NHS Foundation Trust. The letter to Monitor claims Dr Barker’s scores for TEWV were higher than those given by other panel members, and the conflict of interest was not registered in every meeting where the procurement was discussed. Monitor, however, declined to investigate instead saying the CCG ‘could have done more to mitigate a conflict of interest’.

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