A report claiming that social enterprises run by staff might not deliver better services or produce financial savings, has sparked a row between the Department of Health and the National Audit Office.

The NAO said last week that although primary care trusts approved proposals to spin out their provider arms because they expected them to perform better, “they did not generally contract for them to deliver these additional benefits”.

“There is a risk that if cost savings and benefits achievable through separating the commissioning function… are not enshrined in contracts, they will not be delivered,” the NAO report said.

It also warned that the DH does not have a set of criteria against which the Right to Request scheme, which is used in establishing social enterprises, is judged.

As a result the NAO claimed it will be “difficult to assess the success, or otherwise, of the programme and whether the resources devoted to [it] are value for money”.

The auditors found that social enterprises would deliver £900m worth of NHS services by the end of 2011, but said it was too early to draw firm conclusions about the costs brought about by staff spin-outs.

The DH attacked the study, arguing that the NAO had “failed to understand the point of this initiative”. HSJ understands the DH’s view is that it is against the principles of NHS competition to offer social enterprises different contracts to any other provider.

A DH spokeswoman said the Right to Request had delivered “clear benefits”, because spin-outs were led by the people best placed to deliver the best services for local communities.

But an NAO spokeswoman said: “The DH signed off the report, which means they agree with it.” She claimed the department had not disputed any of the report’s conclusions.

Social Enterprise Coalition chief executive Peter Holbrook questioned why a value for money assessment had been conducted when only four out of 47 Right to Request spin-outs had completed the process.

“It is very difficult to draw any accurate or fair conclusions based on the evidence,” he said.