Ricketts: CSU privatisation 'doesn’t fit with NHS values'

At its board meeting in London last week, NHS England ruled out selling CSUs, setting them up as new independent organisations within the health service, and allowing other NHS bodies, such as foundation trusts, to host them.

Meeting papers reveal that CCGs’ lack of support for a sale to the private sector. The paper says: “Engagement with CCGs, as the largest customers, has indicated that this would not win their support, and without the support of customers a CSU would not have a sustainable future.”

Another reason to avoid a wholesale sell off is that, as the market is immature and its value uncertain, there is a risk that the NHS “would be giving away value to the private sector buyer”, the paper says.

Although making it clear that the current hosting arrangements cannot last beyond 2016, the papers include a relaxation of the timetable for “autonomisation”.

The policy had been to make CSUs autonomous by March 2016. Now, NHS England says it will have to happen “during 2016”.

NHS England board will consult nationally on four options for the “autonomisation” of CSUs this year. CSUs will then consult locally on which form they want to take, before submitting their autonomisation proposals to NHS England in late 2015 or early 2016.

The four options will be:

a social enterprise;

a staff owned mutual;

a “customer controlled social enterprise”, in which CCGs retained a stake; and

a joint venture company limited by shares.

The fourth option could include a mix of financial investors, private providers of support services, councils, or a CSU’s staff. NHS England would be likely to retain a stake in such a company, but would not decide whether this would be a controlling stake until it considers specific bids.

Where CSUs opt to become a joint venture company, NHS England would seek to “ensure that extra safeguards are in place to deliver value to the taxpayer”, the board papers say, to “protect the interests of customers, patients and taxpayers from unacceptable financial outcomes”.

Bob Ricketts, NHS England’s director of commissioning support strategy and market development, told HSJ that privatisation was ruled out because it “it doesn’t fit well with NHS values”.

He said social enterprises and mutuals had to reinvest profits in their defined “social purpose”. For CSUs that chose this route to independence, this would be defined as “developing an excellent NHS commissioning system”.

Joint ventures, meanwhile, could have restrictions imposed on how privately owned stakes can be sold on, or could be subject to a requirement to return to customers any profits made above the amount needed to reinvest in the business. There could also be restrictions on executive pay.

Proposals for a private joint venture partner to have a controlling share would be judged by NHS England against possible risks. “We would want to retain a significant degree of control, certainly in the short to medium term… we’re not interested in private sector participation in its own right,” Mr Ricketts said. “We’re interested in private and voluntary sector participation where that can lever up the quality and value for money.”

In a customer controlled social enterprise, CCGs would control the CSU’s strategy and make any “major decisions”. Mr Ricketts said NHS England could also be a co-owner if it uses the CSU to supply support services for its own direct commissioning functions. As long as the entity received 80 per cent of its income from its owners, the controlling customers would not have to go to procurement.

Although CSU leaders would be drawing up proposals for autonomy, Mr Ricketts said NHS England would check that CSUs had enough support from their CCG customers to remain viable.