Major issues have come to light around the procurement process for a new mental health service in Mid and South Essex. A report from the Independent Patient Choice and Procurement Panel (IPCPP) found that the process, which led to the private company Vita Health being awarded the contract in May 2025 by Mid and South Essex (MSE) Integrated Care Board (ICB), had broken several commissioning rules.
Another troubling aspect of the procurement not dealt with by the panel is that at the time of the procurement process and contract award (March to May 2025) Vita Health was in severe financial difficulties, which culminated in its parent company, Totally plc, going into administration in June 2025.
MSE ICB had awarded a large and complex mental health services contract to a company that was on the brink of possibly not existing by the time the contract was due to start in August 2025.
The NHS services run by Vita Health and other subsidiaries owned by Totally, were only saved by a sale of the businesses in early June 2025 to PHL Group. PHL reassured those using the NHS services run by Totally and Vita Health, that they would continue without disruption and that 600 jobs would be safeguarded. PHL Group is part of the portfolio of Ethos Partners LLP, a private equity investment partnership.
The IPCPP, an independent oversight panel, has now told the MSE ICB that it should either publish a new contract notice and tender documents that address the issues identified by the panel or if it cannot do this without changing the key criteria or service specifications of the contract, then it will have to abandon the whole process and start again.
MSE’s contract notice was published 5 March 2025 and advertised a three year contract with an option to extend for two more years. It is worth £92.5m over the maximum timescale. On 7 May 2025, the contract was awarded to private company Vita Health.
MSE ICB currently has four providers of mental health services – Vita Health, Essex Partnership University Foundation Trust (EPUFT), Midlands Partnership University FT (MPUFT) and Hertfordshire Partnership University FT (HPUFT). These all serve different areas of the integrated care system (ICS) that align with the old CCG areas.
There were a number of inconsistencies between the contracts held by these organisations, including the amount spent per patient. The ICB is trying to consolidate the services under a single contract, with a single service specification and a revised lower budget.
The new contract is complex, however, as the provider that wins the contract provider will have to undertake a major overhaul of the current services, including setting up service locations, a new service specification and integrating clinical records into one record system. In addition, the provider will have to take on staff working at the current providers, but as the budget for the new contract is less than the combination of the previous four contracts, the new provider will have to reduce staff and undertake a redundancy programme.
Following the announcement of the award, the incumbent providers, Essex Partnership University Foundation Trust and Midlands Partnership University FT, complained to the IPCPP.
The panel reviewed the complaints made by the trusts and found that the ICB broke the Provider Selection Regime (PSR) regulations in six different ways. These include “denying itself the opportunity to evaluate key aspects of bidders’ proposals on a level playing field”, and breaching its obligation to act fairly, transparently and proportionately.
One of the issues highlighted by the IPCPP was the tight timescale for applying for the contract, considering its complexity and size. The potential providers had only 21 working days to submit bids and only a two day extension was added by the ICB.
IPCPP highlighted the confusion around the cost of moving staff eligible for TUPE from the old providers to new providers, the cost of which was only revealed part way through the process. Initially MSE gave incorrect information on the cost to the potential providers, but when pushed the ICB’s finance team reported that the cost would actually exceed the total budget for the first year of the service by around £2.2 million.
EPUFT and Vita Health both submitted proposals, but after initially engaging in the selection process, MPUFT did not submit a proposal. MPFT told the IPCPP that it was unable to submit “a fully costed and considered proposal that had achieved the required organisation sign-off” by the 3 April 2025 deadline.
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