Poor procurement has put patients at risk of harm © PA Images
Poor procurement has put patients at risk of harm © PA Images

NHS outsourcing contract was a 'shambles'

Will Green is news editor of Supply Management
25 July 2018

The outsourcing of NHS back office support services to Capita was a “shambles”, according to MPs.

In a report the Public Accounts Committee (PAC) said NHS England was in a “short-sighted rush” to cut running costs of £90m by 35% with the contract, which involved services to 39,000 GPs, dentists, opticians and pharmacists.

The PAC said: “Neither NHS England nor Capita understood the service that was being outsourced, and both misjudged the scale and nature of the risks. They ignored many of the basic rules of contracting, and, once problems emerged, did not do enough to stop the issues from getting worse.”

The report said Capita expected to make losses of £64m in the first two years of the contract, in order that NHS England could cut its costs. This provided the company with an incentive to close primary care support offices and reduce staff “as quickly as possible, in order to minimise those losses”.

Between December 2015 and November 2016, 35 of the 38 offices Capita inherited were closed and staff numbers were cut from 1,300 to 660, which meant the company “did not have the resources needed to deliver the services required”.

Service failures “put patients at risk of serious harm”, and 87 women were incorrectly notified they were no longer part of the cervical screening programme. The PAC said NHS England is “currently assessing an incident to identify whether there has been actual patient harm”.

The report said Capita accepted it was a mistake to carry on closing offices, and because it had to spend more than it expected to support failing services, its losses in the first two years were in fact £125m. MPs said Capita had apologised for mistakes and committed to improve services.

The seven-year £330m contract began in 2015 and covered services including payments to GPs, sending letters to those eligible for cervical screening and processing patient registrations.

PAC chair Meg Hillier said: “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.”

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