COMMERCIAL: Bath and North East Somerset Clinical Commissioning Group plans to re-commission its community health and social care services on an unprecedentedly long contract of up to seven years.
The CCG said it had received advice from the Department of Health that a contract of this length would be appropriate if a competitive procurement process was followed.
The CCG and Bath and North East Somerset Council currently co-commission a community interest company, Sirona, to provide the services. Sirona has held the contract since 2011, when primary care trusts were required to hive off their provider arm.
The contract is due to end in March 2016, and the CCG says the value of the health element of the contract over the current five-year term is £123m. It estimates the annual value of the future contract would be in the region of £45m, of which £20m would come from the CCG.
The services will be tendered against a fresh specification and it is possible that new services, such as community mental health, will be included in the expanded contract.
When PCTs were forced to separate their commissioning and provider functions, most community services contracts were re-let on terms of between three and five years, so a potential seven year contract life represents a significant change.
Although many contracts are now approaching the end of their terms, few CCGs have begun re-tendering, and anecdotal evidence suggests many are looking to roll on the contracts.
Monitor chief executive David Bennett recently told HSJ the competition regulator was “closely” observing what CCGs were doing with the contracts.
New competition regulations set out in section 75 of the 2012 Health Act seem to have influenced Bath and North East Somerset’s decision to re-tender, with its deputy director Jane Shayler noting in the board papers that a renewal of the contract with Sirona would carry “significant risk of legal challenge”.
She adds: “Interested potential providers are starting to enquire when the council/CCG will tender community services and it is difficult to construct a robust rationale for renewing the contract rather than tendering the contract.”
The CCG and council will share equally the funding of the procurement process, which is expected to cost £100,000 over a two year period.
A decision will also be made at a later date whether to extend Sirona’s contract by six months.
9 January 2014