NHS contract fiasco cost taxpayers an astonishing £16m

PUBLISHED: 15:26 26 July 2016 | UPDATED: 15:36 26 July 2016

What a waste! £16m worth of taxpayers' money down the drain in failed NHS partnership contract.

What a waste! £16m worth of taxpayers' money down the drain in failed NHS partnership contract.

ILIFFE

Could this sheer waste of cash have been avoided?

"Limited oversight and a lack of commercial expertise led to problems that quickly became insurmountable"

Amyas Morse, head of the NAO

Millions of taxpayers’ cash was squandered on a failed NHS contract to deliver care for elderly and mentally ill patients throughout Cambridgeshire.

A report by the National Audit Office (NAO), who investigated the doomed contract, said a ‘limited oversight and a lack of commercial expertise’ were among the chief reasons behind its collapse.

The contract was abandoned after just eight months and the NAO investigation discovered a catalogue of errors between the Cambridgeshire and Peterborough Clinical Commissioning Group and UnitingCare Partnership.

UnitingCare, an NHS consortium of Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust, pulled out of the £800m contract in December 2015 after realising it was not financially sustainable.

It had been the largest deal in NHS history and was aimed at linking together hospital, mental health services and community care for adults and older people throughout the county.

But the damning report said several costs were not factored in, with some critics arguing the cash set aside for redesigning services was insufficient. Clauses in the contract also provided “significant financial risks” for the CCG.

Amyas Morse, head of the NAO, said: “This contract was innovative and ambitious but ultimately an unsuccessful venture, which failed for financial reasons which could, and should, have been foreseen.”

“Limited oversight and a lack of commercial expertise led to problems that quickly became insurmountable.”

UnitingCare Partnership agreed to begin the contract from April 2015 even though they had yet to clarity the full implications of the cost.

One month into the contract, they requested £34 million of extra funding for the first year - some 21 per cent more than the contract price for that year.

But when the CCG said it could offer no further advance funding it led to the collapse of the deal and a £16m bill for unfunded costs.

The CCG paid half this cost and the trusts split the difference. But in addition to that hefty overspend was another £8.9 million bill to the NHS for the setting-up of the contract, bid and its termination costs.

Meg Hillier, Labour MP and chairwoman of the Public Accounts Committee, said the report ‘details an astonishing array of errors’ in implementing service changes.

She added: “Significant weaknesses were obvious from the start and yet the UnitingCare Partnership, clinical commissioning group, Foundation trusts and other bodies were content to continue.

“Despite drafting in specialist expertise from the private sector and the NHS, the assumptions underlying the contract’s cost structure were not tested.

“Instead, the contract - which was not remotely ready - was rushed through without due regard for protecting taxpayers’ money.

“The result of this is damning: a contract terminated before the ink had even dried out, at an unnecessary cost of £16 million.”

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