COMMERCIAL: A controversial mental health procurement could land commissioners with added expense by leaving the existing provider, which bid unsuccessfully for the contract, with stranded costs, according to an external review.
- New 0-25 mental health service could lead to higher costs elsewhere in the system
- Incumbent trust says it will lose £14.2m a year
- Provider and commissioners disagree over “out of area” beds
- New service now will not fully go live until April
Clinical commissioning groups in Birmingham have jointly tendered a service to integrate mental health services for children with those for adults aged 25 and under. The contract is worth £23.7m per year, and has been awarded to a consortium called Forward Thinking Birmingham.
According to Birmingham CrossCity CCG’s board papers, an external impact assessment, conducted after the contract was awarded, “reveals a potential cost pressure to CCGs and the need for further analysis… particularly in financial terms”.
The CCG is affected by the contract, although the tender was led by Birmingham South Central CCG.
HSJ understands much of this new cost pressure will arise from “stranded costs”. Birmingham and Solihull Mental Health Foundation Trust – the current provider of services for people aged 16 and over – says it will lose £14.2m a year in revenue as a result of the transfer but it may not be able to cut expenditure by the same amount.
As a result, it could be left with liabilities such as staff unable to transfer to the new provider, or estates costs related to wards it cannot close despite the loss of 16-25 services.
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This has prompted concerns locally about the viability of the remaining adult services as a result of the 0-25 contract. CCGs may have to spend more on adult services as a result.
Meanwhile, although Birmingham South Central CCG insists implementing the new contract has not been delayed, it has emerged that most of the new 0-25 service will not go live until April. In February, when the contract was awarded, the start date was given as October. Only a telephone line and an “access centre” will now open this month under current plans.
HSJ has also learned that commissioners in Birmingham are unhappy over Forward Thinking Birmingham’s plan to use beds in a Priory hospital in Cheadle, Greater Manchester. The consortium plans to use the site for female psychiatric intensive care patients. Commissioners would rather beds were found in Birmingham, but the provider argued that these patients are already treated “out of area”.
The consortium is led by Birmingham Children’s Hospital FT, which already provides mental health services for young people in the city, and also includes Priory Group, the Children’s Society, Beacon UK, and Worcestershire Health and Care Trust.
Information supplied to HSJ