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A lack of accountability

There are a number of issues surrounding accountability, or rather a lack of accountability, for the non-NHS organisations that win contracts.

Freedom of Information

NHS organisations – trusts, CCGs and NHS England itself, are all subject to the Freedom of Information regulations, in contrast, non-NHS organisations are NOT subject to the freedom of information regulations. Once the contract has been awarded, then it is virtually impossible to get information as a member of the public.

Commercial confidentiality

Commercial confidentiality is often cited by NHS organisations and councils as a reason for not disclosing full and detailed information on contracts between the NHS and non-NHS organisations. This makes it extremely difficult to find out what costs are involved and what the companies have been contracted to carry out.

Walking away from contracts with no consequences

Once contracts have been awarded, there is also a lack of accountability and consequences for companies that just walk away from contracts or parts of contracts if they can’t get what they want or no longer make the profit they thought they would. In many cases notice is given by the companies, but in the case of companies going bankrupt then contracts are often abandoned at short notice.

In October 2018, Virgin Care handed back part of a £280 million seven-year contract in East Staffordshire to provide services for the frail and elderly. The company had been awarded this fixed-price contract in March 2015, under which it could sub-contract the work to other organisations.

The contract has been dogged by contractual and financial issues. In March 2017, CCG board papers seen by the HSJ revealed that Virgin Care and East Staffordshire CCG were in dispute over contractual arrangements. In October 2017, HSJ reported that Virgin Care was demanding more money from the CCGs. No amount was officially confirmed, but HSJ noted that it was about £5 million. According to HSJ in October 2018, the CCGs did not provide an extra £5 million to Virgin Care and as a result the company terminated parts of the contract; the company will no longer act as a prime provider commissioning services such as hospital-based services, 111 and out-of-hours services. Virgin Care will, however, continue to provide the community services, which it has direct responsibility for, including specialist nursing, community nursing, care coordination and care navigation. The CCGs involved told HSJ that they will contract directly with the services beginning May/June 2019, instead of Virgin sub-contracting.

The financial instability of many non-NHS organisations has meant that over the years many contracts have been abandoned at short notice, with local government, CCGs, and NHS trusts having to pick up the pieces. The owners or shareholders of the organisations are never held accountable and no compensation is paid.

A recent example of this is the urgent care provider Primecare and its parent company Allied Healthcare, one of the UK’s leading homecare providers. In November 2018, the CQC issued a report on the financial status of Allied Healthcare; Allied Healthcare was due to make a large loan repayment at the end of November 2018 but there appeared to be insufficient funds. The report noted that the company might not continue trading after the end of November 2018. A letter to all councils and CCGs advised them to make contingency arrangements in the event of the company withdrawing from contracts.

The company’s Primecare subsidiary has contracts for out-of-hours (OOH) and urgent care throughout the midlands. CCGs and GPs have been sent letters advising them to find new providers of these services by the end of November. The CCGs and GPs had very little notice, including GPs at 20 Birmingham practices who had to find replacement OOH cover with just 10 days’ notice from Primecare. Allied Healthcare has sought to sell or transfer its homecare contracts.

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