A major issue with private companies being awarded contracts for the NHS is that private companies need to make a profit. The companies have owners and shareholders that demand a return on their investment. So its hardly surprising that if a private company can, it will cut costs to increase its profit on the contract.
One of the best examples of a private company cutting costs and ultimately making a mess of a contract is Capita and the primary care support contract.
Capita took over the coordination of primary care support services in September 2015. The contract with NHS England was designed to save £40 million per year by bringing together a previously fragmented service to a single national provider for Primary Care Support England (PCSE). Capita’s bid hinged on making a £21 million per year saving. The contract is worth £330 million over seven years. Capita immediately began centralising support services to three national hubs and implementing a single online ‘portal’ for practices to order supplies and ‘track’ the movement of patient records.
However, since the contract began there has been an never-ending series of problems – ranging from things as mundane as surgeries running out of prescription pads and syringes to far more serious problems with the secure transfer of patient notes around the country, with notes going missing or delivered to the wrong surgery, and women being dropped from the cervical cancer screening programme. The problems encompassed GPs, dentists, opticians and pharmacists. The most recent issue, which surfaced in mid 2018, was that Capita had failed to send out nearly 50,000 letters as part of the cervical cancer screening programme and although the company discovered this issue in August 2018, it neglected to inform NHS England of the issue for two months.
Finally, in May 2018 the National Audit Office (NAO) produced a report on the contract noting that patients had been “put at serious risk of harm” due to Capita’s failures. The report noted how both parties grossly underestimated the size and complexity of the task and the risks involved. The NAO report was particularly critical of NHS England and its inability to control Capita’s “aggressive” programme of office closures and redundancies, even when it became clear “it was having a harmful impact on service delivery”. In response NHS England highlighted the £60 million the contract had saved; the NAO report noted that the extent of harm to patients will not be known for some time to come.
In an excellent analysis of the contract by Richard Vize in The Guardian, he notes that the contract was “a textbook example of how to set up an outsourcing contract to fail. Pretty much everything that could have gone wrong went wrong.”
Under the contract Capita was expected to make massive losses in the first two years in return for later riches. Vize notes that “With a big upfront loss, Capita had a massive incentive to cut costs quickly, so by the end of 2016 it had shut virtually all the local offices it had inherited and halved the staff. Vital local knowledge was lost.”
Problems are still ongoing with the contract, the NAO notes that “users continue to experience poor delivery with seven severe service failures in February 2018.” In mid-2018 the issue of Capita’s failure to send letters as part of the cervical cancer screening programme came to light.
Serco in Cornwall
The scandal of OOH provision in Cornwall run by Serco. An earlier scandal in OOH provision involved Serco. The company was responsible for OOH care in Cornwall, but in December 2013 Serco announced that its contract to provide out-of-hours care in Cornwall for Kernow CCG would end 18 months early in May 2015. The contract was dogged with controversy – Serco had to admit that some of its staff had falsified data to make the company’s performance appear better than it was and whistleblowers had raised concerns about poor staffing levels. In 2013, Serco unsuccessfully tried to sub-contract the work to Devon Doctors, the GP consortium that had failed to win the original bid; Serco had won the bid as it was cheaper.
Serco
mental health providers
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