• Review lays bare chaotic process which led to £750m contract collapse
  • Cambridgeshire CCG and its advisers blame each other for failure on key issues
  • Concerns raised about process and budget set by CCG to deliver deal
  • NHS England says it will scrutinise big contracts more closely in future

A review of the £750m UnitingCare Partnership contract debacle has laid bare the disjointed process undertaken by Cambridgeshire commissioners and its advisers, and the rows over who was to blame.

The PwC review carried out for NHS England raised concerns about every step of the process, from the budget set by Cambridgeshire and Peterborough Clinical Commissioning Group to how the CCG and advisers managed it.

The review, published today, says NHS England would “be scrutinising future local approaches in the light of these findings”. It is expected to set out new tendering rules shortly as a result of the contract collapse.

The latest in a string of post mortems of the project focused on the commissioner and its advisers that awarded the older people’s services contract, which collapsed just eight months into a five year deal in December 2015, to the UnitingCare Partnership.

UnitingCare, a limited liability partnership jointly owned by Cambridgeshire and Peterborough Foundation Trust and Cambridge University Hospitals FT, was wound down in the wake of the contract collapse and the services were handed back to the CCG.

The PwC report details how the CCG and advisers claimed fundamental issues underpinning the innovative prime provider contract were the responsibility of other parties, such as securing parental guarantees and crucial tax advice.

The “lack of clarity for collating, escalating, and monitoring emerging risks and issues” was a key reason for the demise of the partnership, the report says.

Much of the criticism focuses on the CCG. It says the group could have identified the financial pressures that toppled the contract earlier if it had retained advisers in a period when “fundamental negotiations” were taking place following the preferred bidder process.

The CCG’s view that the financial risk rested with the provider and not itself “was not a commercially sound position to take, given the limitations in the available financial information and the risks to the CCG of entering into a financially unviable contract”, it says.

“In our view the CCG did not fully consider the financial envelope risks or implications of bidder financial failure,” it adds.

Financial adviser Deloitte “noted significant limitations in the financial information provided for due diligence and recommended that further due diligence be undertaken but the CCG did not commission this”.

It also says the programme board the CCG put together to scrutinise the procurement process was “too large… and not an appropriate forum for challenging the details of the bidder submissions”.

The report highlights fundamental differences in opinion between the NHS’s internal commercial advisers the Strategic Projects Team, which is being shut down, and the CCG.

It says: “From the CCG’s perspective, the SPT were engaged as experts to handle the procurement process. In their view it was the role of the SPT to pull together the work of all the advisers, identify the cross-cutting risks and advise the CCG accordingly. When interviewed, the SPT team did not agree that this was their role.”

The other main advisers, Deloitte and legal advisers Wragge & Co, are also criticised.

On the key issue of securing parental guarantees, the report says Wragge & Co admitted that “the requirement of parental guarantees should have been included in the preferred bidder letter” it had drafted.

However, the report goes on to say that while the issue of VAT was “excluded from Deloitte’s scope, we might have expected the advisers to raise issues with the CCG prior to contract signature and we have not seen evidence that this occurred”.

It was “surprising” that VAT advice, had “not [been] raised and understood prior to contract signature”.

A previous investigation into the collapse, an audit by West Midlands Ambulance Service FT, found that one month into the contract the provider asked for an extra £34.3m for the year. This would have been worth 23 per cent of the £152m first year contract value.

This included £6m relating to the acuity of patients and £4.9m relating to additional VAT liabilities, which the CCG said were not relevant.

A NHS England spokesman said: “We commissioned these reviews to ensure trusts and CCGs learn the lessons from what happened in Cambridgeshire. NHS England and NHS Improvement will be scrutinising future local approaches in the light of these findings.”