Private sector outsourcing giant Serco has been selected as preferred bidder to take over nearly all NHS community services in Suffolk in a deal worth £140m to the company over three years.

The listed multinational informed investors this morning that it had been selected as preferred candidate to take NHS Suffolk’s general adult, community equipment, and specialist paediatric services. It anticipated around 1,000 NHS staff would transfer to Serco under the contract.

If the deal goes through, it would see the firm running NHS services ranging from community and specialist nursing, to speech and language therapy, to the management of community hospitals in the county.

The only major NHS Suffolk out-of-hospital services not run by Serco will be general children’s services, which were transferred to Suffolk County Council in 2011.

The primary care trust put its remaining services up for open tender last year. Under the Transforming Community Services programme, all commissioners were expected to divest themselves of their healthcare provider services by April 2011.

Serco beat three shortlisted NHS organisations to win selection as preferred bidder. Its was the only shortlisted private sector bid to take on the services in their entirety.

NHS Suffolk chief executive Paul Watson said the bids were assessed on a “value-for-money” basis. All bidders had to attain a base score for quality, and were then ranked according to who achieved the highest points for quality for each pound spent.

“Serco were able to demonstrate a combination of very high quality bid and a very competitive price structure,” he told HSJ.

“It wasn’t necessarily the cheapest. It certainly gave the best value for money in terms of cost-per-quality point.”

According to Dr Watson, the value of the services tendered was £53.3m per annum, or £160m over the three-year life of the contract. The statement released by Serco this morning said the value of the deal was £20m less, at £140m.

Dr Watson added that NHS Suffolk had been “particularly impressed by the innovative approach [Serco] brought to service redesign” and plans to “provide a more coherent response to individual needs”.

Serco said it planned to work in partnership with a range of NHS and third sector organisations to “create a unique model of integrated service delivery for Suffolk”. Its statement added: “This will address local health and geographical needs by simplifying services and processes, and utilising new technologies to improve accessibility and address the rural needs of Suffolk patients.”

Dr Watson told HSJ that employees would be transferred on existing terms and conditions, and Serco had pledged to honour pension arrangements.

But he added that “like any” of NHS Suffolk’s providers, they would have to “make better use of resources”. “That will mean in some cases different ways of working, etc,” he said. “But that’s something the whole NHS is having to do. I didn’t have any evidence Serco were taking a blunt-edged approach to this, it seemed quite sophisticated. There’s was the kind of process we’d want our NHS providers to be taking.”

According to private healthcare market analysts Laing and Buisson, Serco’s UK health business includes primary care in immigration reception centres, prison health services, and GP out-of-hours services. It is also a partner in GSTS Pathology, a joint venture with London NHS foundation trusts Guys and St Thomas’s and King’s College.

The Suffolk deal follows the tendering of community services in Surrey, which saw Virgin Healthcare win preferred bidder status for £450m worth of NHS services.

Serco chief executive Christopher Hyman said: “This contract adds to our portfolio of services in the rapidly growing global health sector. We look forward to continuing our international track record for improving services for patients and other end users and delivering efficiencies for our customers.”

The three NHS organisations that bid and been shortlisted to take over all the tendered services were North Essex Partnership FT, Norfolk and Waveney Mental Health FT, and Norfolk Community Health and Care Trust. The latter later withdrew.  

The tender was managed by NHS Midlands and East’s strategic projects team, which also brokered the 10-year franchising of Hinchingbrooke Health Care Trust to private firm Circle.