Embattled firm blames ‘onerous’ NHS contracts

Totally plc’s contract to run UTC services at four locations in north west London came to an end in January, triggering concerns from investors.

Chief executive Wendy Lawrence said in a presentation this week that “walking away” was “absolutely the right thing for the business” and “what’s been asked of us is above and beyond what should be expected”.

At the time the contract was cancelled, a joint statement from North West London Integrated Care Board and Totally plc said the contract was nearly at an end anyway. But Ms Lawrence has now said “legal discussions” with NWL ICB “had now ended”.

The contract was put out to tender in November last year and followed concerns about performance.

An ICB report last summer cited “system wide actions to understand and address weaknesses in UTC performance”, while another in October said a “remedial action plan” was in place “submitted by Totally plc in July 2022, which includes specific actions on staffing performance and re-direction initiatives”.

The company still provides UTC services at St Mary’s and West Middlesex hospitals in north west London, and runs centres elsewhere.

A Totally plc spokeswoman said: “We mutually terminated contracts for four NWL UTCs earlier this year as we believed them to be onerous in relation to what we were being asked to deliver in the context of increasing patient demand. Patient safety is of paramount importance and we need to ensure that services can be properly staffed to enable us to achieve the ‘95 per cent seen within four-hour target’ that as a provider we are contracted to meet.

“These contracts were originally procured in a pre-pandemic world on the basis of lower levels of patient demand. We always work with commissioners to ensure we are doing everything we can to deliver against contracted KPIs. Unfortunately, in the face of significantly increased demand we did not believe it was possible to guarantee that targets were met.”

An ICB spokesperson said: “All parties agreed that the termination of the contract was by mutual agreement under clauses set out in the contract.

“These terms cover all UEC contracts with NHS NW London that the company held. No additional payments were made by NHS NW London to terminate the contract.”

The company’s most recent financial results, published this week, showed a turnover of £98.8m and a profit margin of 17.6 per cent in its urgent care division.

Chief financial officer Lisa Barter said that when the company took over the contracts margins had increased from around 12.5 per cent.

The urgent care division comprises roughly three-quarters of its turnover, down from two years ago, following the acquisition of Pioneer Healthcare, which has seen growth in demand for its elective services.

Totally plc’s share price has fallen 71 per cent in the last year, from 42.25p on 14 July 2022 to 12.25p when the market closed on 13 July 2023.

In response to a question about share buy-back, Ms Lawrence said: “The share price remains a concern for us, none of us like to see what’s happened to the share price recently.”

Closing the Q&A session with investors, Ms Lawrence said: “We will take back our market share.”

There have also been performance concerns about urgent treatment centres run by a different independent provider in North East London.