Essential insight into NHS matters in the North West of England, with a particular focus on the devolution project in Greater Manchester. By Lawrence Dunhill

Outsourcing lessons

There was a warning from Cheshire last week for NHS trusts considering whether to outsource their corporate and back office services.

While Lord Carter, in his review of NHS efficiency, didn’t quite go as far as recommending services be farmed out to private providers, there was certainly a heavy suggestion that this could reap rewards.

Many trusts have already tried this of course, to varying degrees of success, and the example of East Cheshire Trust shows some of the issues that can arise.

The trust was told it would have to stump up an extra £2.4m a year – more than double the current annual charge of £1.1m – for outsourcing firm Arvato to continue running its outsourced human resources department.

Arvato declared its contract was no longer commercially viable, and the trust, which ended 2015-16 with a deficit of £24m, will transfer 45 staff back in house in April 2017. The Arvato deal had started in 2013.

Unsurprisingly, both the trust and the company were unwilling to elaborate in any detail on all this, or explain why the service is now deemed unviable, so we don’t know the details.

Concerns around the outsourcing of NHS services usually focus around “privatisation” fears, and company directors lining their pockets with cash that could have been spent saving lives.

But without speculating on the factors involved in the Cheshire case, sources in the outsourcing world tell me the real problem in recent years has been the impact of the financial squeeze on these sorts of contracts.

With trusts increasingly desperate to find savings, bidders will often race to the bottom on price, and then find themselves struggling to offer the service standards that were promised. Uncertainty and turbulence can then follow.

While Lord Carter might want trusts to team up and outsource their desk-based staff, the potential providers are increasingly wary of the risks involved, and may opt to keep their powder dry until the offerings get more generous.

Turkeys and Christmas

The emerging “hospital chain” being developed in Greater Manchester looks somewhat messier than imagined by Sir David Dalton and NHS England.

There are likely to be two categories of members – with Salford Royal Foundation Trust and Pennine Acute Hospitals Trust relinquishing a greater degree of sovereignty than the acute trusts in Wigan and Bolton.

Perhaps predictably, it comes down to self-preservation, or as Andrew Foster, chief executive of Wrightington, Wigan and Leigh FT put it: “Turkeys not voting for Christmas”.

He takes the pragmatic view that the chain needs to attract more trusts to join, not least to secure investment in areas such as IT, and the surrounding fiefdoms will be far less interested if it means overhauling their management structure and giving up power.

Pennine Acute is of course now under Sir David’s control, making it somewhat more malleable than under the previous leadership.

It’s clear there were, and probably still are, differing views on how the chain should function, but the two chief executives seem to have found a third way that can work for the time being.

Bad timing

Well done to Greater Manchester West Foundation Trust, which has been given an overall good rating by the Care Quality Commission.

The good rating is likely to strengthen the trust’s case to take over Manchester Mental Health and Social Care Trust, which is set to be acquired by either GMW or Pennine Care Trust after a procurement process.

However, the CQC’s timing was pretty unfortunate, as it came the day after a big inquest story in the Manchester Evening News, in which the coroner raised concerns about communication failings at the trust.

This rather took the gloss off the paper’s subsequent coverage of the regulator’s inpsection, with the newspaper highlighting negative comments in the report and declaring in its headline on Saturday: “Mental health trust slammed by family over man’s death is rated ‘good’ by inspectors”.

North by North West takes an in-depth weekly look at one of the NHS’s most challenged and innovative regions. There will be a particular focus on the devolution experiment in Greater Manchester, but my scope will also include Merseyside, Lancashire, Cheshire and Cumbria.

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