PCTs failing to decommission services

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Two out of three primary care trusts failed to decommission any services last year, showing the extent of the challenge they face to become world class commissioners.

HSJ surveyed PCTs for details of services decommissioned or moved to another provider in 2007 and their financial values. The total value of services decommissioned across the 60 trusts that responded was £14m - a tiny fraction of the £70bn PCTs spend each year.

The vast majority of decommissioned services were in primary and community care. This probably reflects the additional capacity PCTs were building into the acute system to hit the 18-week treatment target and their guaranteed volume contracts with the independent sector.

Reasons for decommissioning ranged from concerns over quality, effectiveness and value for money to discovering that services were not primarily health related.

Warrington PCT found one provider had switched focus to delivering music groups and social clubs.

Heart of Birmingham teaching PCT had ended nearly £2m of contracts and appointed new providers, including undertaking tender processes in two cases.

In one case, it decommissioned its own provider arm because of concerns over its ability to "recruit and retain staff" and meet specified outcomes.

Immediate savings

Westminster PCT had decommissioned the highest value service of the PCTs that responded, ending a contract worth more than £5m for intermediate care beds and recommissioning elsewhere at a saving of more than £1.6m.

But the majority of trusts - 40 out of 60 - said they had not decommissioned anything.

World class commissioning requires PCTs to demonstrate that they can "stimulate the market", "manage the local health system" and "make sound financial investments". There are questions over whether this can be achieved without decommissioning.

Senior Department of Health and strategic health authority figures said the lack of activity was not yet cause for alarm but warned it was important PCTs begin to scrutinise contracts more closely.

National clinical director for primary care David Colin-Thome said he was not disappointed with the lack of decommissioning as "some PCTs had made quite a good start" and disinvestment was difficult. But he said: "I'd like some of the work on disinvestment to become more intense over the next few years."

World class commissioning

NHS North West chief executive Mike Farrar said he expected the first round of world class commissioning assessments to push PCTs into becoming "more forensic" about which services were delivering the best return. "You should be able to explain the pattern of services you're commissioning and be on top of the economics of what you're buying," he said.

Mr Farrar predicted PCTs would have to start managing contracts more actively next year as budgets were squeezed.

Islington PCT decommissioned £700,000 of services last year, including pregnancy termination, alcohol dependency and mental health services.

Director of strategy and commissioning Will Huxter said PCTs could not prove they were managing markets competently unless they were decommissioning. "How can you possibly do that if you're not decommissioning services?" he said. "You need to be doing all parts of the [commissioning] cycle and that includes decommissioning, otherwise you're saying 'we're stuck with the providers and pathways we've always had'."

Derbyshire County PCT assistant director of commissioning Paul Carney said he expected to see more pressure to strengthen decommissioning next year. He said his PCT, created in the restructuring two years ago, was developing its decommissioning plans for 2009-10 and beyond. "It's arguably something everybody should have been doing already. With the world class commissioning drive, it will be a major strand of effective commissioning in the future."

But Hull teaching PCT chief executive Chris Long said the challenge lay in commissioners working with providers to improve services. "I think the work is much more about how you drive the variation out of the system, rather than just chopping and changing providers," he said.

HSJ SURVEY RESULTS

• 40 out of 60 PCTs had not decommissioned any services

• Of those that had, total value of contracts for decommissioned providers: £14m*

• Average value of contracts decommissioned per PCT responding: £700,000

• Highest value contract decommissioned: £5,204,822 (Westminster PCT)

*Two trusts were unable to supply values for terminated contracts

See Calm before the storm as PCTs prepare to flex their muscles