Sylvia Davidson, Paul Evans & Molly Dawson.
On average Clinical Commissioning Groups spend around 15% of their expenditure purchasing healthcare from non-NHS organisations, but an NHS Support Federation survey of 2019/20 annual accounts also shows 18 CCGs spend around 20% and the highest spending CCGs allocate 26% to non-NHS organisations.
Who? The non-NHS organisations that are receiving money to run NHS services include private companies, community interest companies (also known as not-for-profit companies), and charities.
What’s not included? CCGs record their spending on GP surgeries separately, some of this will include APMS contracts signed with companies paid to run local GP surgeries such as those with AT Medics and Virgin Care, therefore the true amount of spending will be higher.
What care are they buying in? Of the top ten CCGs for non-NHS spending a common factor was the large scale outsourcing of community healthcare – services that are not covered by the GP contracts or carried out within hospitals. These large contracts often also cover public health services, which are funded by local councils.
Top of the list? Bath and North East Somerset CCG (now merged to become Bath, North East Somerset, Swindon and Wiltshire CCG) topped the list of non-NHS spending at 26% of its net expenditure in 2019/20.
This comes as no surprise, as in November 2016 it awarded Virgin Care a seven year contract worth around £700 million (with an option to extend for three years) for provision of over 200 community health services in the area. This contract crosses over into social care, and includes adult social care, continuing healthcare, children’s community health, public health nursing, and speech and language therapy. This is a prime provider contract with Virgin Care directly delivering and coordinating services, but with the option to subcontract to other providers where appropriate.
Another high spender on non-NHS services at 22%, West Lancashire CCG, also has a large contract with Virgin Care for community health services and urgent care services. Virgin Care was awarded the two five-year contracts together worth £65 million in December 2016 and they began 1 April 2017. The services include district nurses, community matrons, IV therapy, end of life teams, GP out of hours and walk-in centres.
The remaining high spenders in the top ten have in common a large number of contracts (or just a single large contract) with a Community Interest Company. Many CICs were spun out of primary care trusts (PCTs) in 2008. CICs have to be run as any other company, but any surplus is plowed back either into services or through a charitable arm of the organisation.
Mid Essex CCG at 26% non-NHS spend, has major contracts with Provide, a community interest company (CIC), that provides community services, including district nursing, speech and language therapy, podiatry, community hospitals, community stroke and rehabilitation services, but also has a contract with the private company Integrated Care 24 for integrated urgent care (including NHS 111 and out-of-hours GP services).
Greater Huddersfield CCG and North Kirklees CCG, at 23% and 21% of net expenditure on non-NHS organisations, respectively, both have contracts for a large number of community health services to be provided by Locala, a CIC.
Other high-spending examples include North East Lincolnshire CCG, at 23% non-NHS spend, with a contract with the CIC NAViGO covering all community mental health services; Hull CCG, 22% non-NHS spend, where community health has been outsourced to City Health Care Partnership CIC; Medway CCG, with 22%, where community health care is provided by Medway Community Healthcare CIC; Nottingham CCG, at 22%, where community healthcare services have been outsourced to Nottingham CityCare Partnership CIC; and East and North Hertfordshire CCG, 21% spend, where Herts Urgent Care CIC provides urgent care and NHS 111 services in the area.
In 2019/20 East Surrey spent 20% on non-NHS services. The CCG’s community health services are provided by First Community Health & Care CIC and in November 2019 the CCG renewed its contract with FCHC for another three years from April 2021, without a competitive tender process.
The Sirona contract
The best example of the dominance of a CIC in community health is in the Bristol, North Somerset and South Gloucestershire CCG area. In 2019/20 this CCG was a high spender on non-NHS organisations at 23%, but this is likely to rise even higher in 2020/21 following the awarding of a ten year £1.06 billion contract to Sirona CIC, which began 1 April 2020.
Sirona has been providing community healthcare in the area under several smaller contracts for several years, often in partnership with the local hospital trusts and other CIC. But in 2019/20 Sirona increased its control of community healthcare – both adult and children’s. It will now also provide many of the public health services that are funded by the local councils.
The contract covers adult community healthcare services in Bristol, North Somerset and South Gloucestershire. The lead commissioners were the CCG, but the local councils were also involved as the contract covers some public health services and social care.
Sirona beat two rival CICs to the contract, Bristol Community Health CIC and North Somerset Community Partnership CIC. As a result of the award, both Bristol Community Health CIC and North Somerset Community Partnership have ceased trading.
Sirona has also gradually taken over children’s community health services in the area. Under a contract from 2017, Sirona runs children’s services across Bristol and South Gloucestershire as the lead in a partnership that included Bristol Community Health CIC (now ceased trading), Avon and Wiltshire Mental Health Partnership Trust and University Hospitals Bristol FT. The five year contract is worth £34.6m a year, and covers health visiting, school nursing, child and adolescent mental health, community paediatricians, and community nursing until 2022.
Then in January 2020, Sirona took over the contract for specialist children’s community health services in North Somerset. These services include community paediatrics, physiotherapy and speech and language therapy; as well as Child and Adolescent Mental Health Services (CAMHS). These services had all been run by Weston Area Health NHS Trust, but it decided to withdraw from the contract. This was reported by Bristol, North Somerset and South Gloucestershire (BNSSG) CCG as a transfer and no competitive tender process took place.
Under the £1.06 billion contract and other contracts, Sirona is listed as a prime provider, which allows the company to sub-contract services to other organisations, which could be the local NHS hospital trusts. Sirona has sub-contracted CAMHS to Avon & Wiltshire Mental Health Partnership NHS Trust (AWP), in Bristol and South Gloucestershire for a number of years and from April 2020 will sub-contract CAMHS in North Somerset to AWP.
Community Interest Companies (CIC), with their promises of reinvestment of profit and strong community-base, are often viewed as somehow having a more benign influence on the NHS than private companies, such as Virgin or Care UK, which are always seeking profit for their shareholders.
Yet Sirona in the last few years has exhibited behaviour that private companies have been criticised for in the past – Sirona has both asked for more money for contracts and walked away due to a contract being financially unviable. Virgin has been heavily criticised for actions such as these in the past.
In April 2019, the local CCG accused Sirona of “burying its head in the sand” over failures to assess vulnerable children across Bristol and South Gloucestershire. Sirona ran the contract to provide initial health assessments (IHAs) and review health assessments (RHAs) after a child has been in the area 12 months from 2017-2022.
Under the contract, the company was supposed to provide initial health checks for 90% of looked-after youngsters within 28 days of them moving into the area but it achieved just 7% — nine out of 123 kids — in the city over the last 12 months, according to its own figures. And in South Gloucestershire, the figure was just with 24% – 12 children out of the 50 who came under the local authority’s care in 2018/19 – assessed on arrival.
Sirona insisted that it needed more money as funding had been reduced and requested £155,000 for three extra specialist nurses. The Bristol Post, however, reported that the CCG dismissed the request after launching a “forensic review” of the service which confirmed that funding had not reduced and there had actually been a 4% drop in the number of children in care moving to Bristol and South Gloucestershire.
Sirona walked away from a contract that it said was not financially viable in 2019. In September 2019, Sirona gave notice on a contract for three Community Resource Centres (residential services) and five Extra Care services in Bath and North East Somerset. These have now been taken over by the council. Sirona claimed that the on-going provision was financially unsustainable. The company had been in dispute with its staff since 2018 over pay and conditions and there had been intermittent 24 hour strikes. In an effort to save money, Sirona had asked staff to move from paid to unpaid breaks when they work more than six hours.
An assessment of the annual accounts of CCGs in England has shown spending on services run by non-NHS organisations to be over double the percentage reported by central government, and possibly higher still if spending on GP services could be included. Privatisation is also not going away as the £1.06 billion contract with Sirona testifies.
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