NAO: Major contract collapse reveals 'significant risks' to patients

The NAO has delivered a highly critical verdict of most of the organisations involved in the UnitingCare Partnership fiasco, including the NHS’s controversial Strategic Projects Team, which had a lead advisory role.

Commons public accounts committee chair Meg Hillier said the report detailed an “astonishing array of errors” leading to the collapse of Cambridgeshire and Peterborough Clinical Commissioning Group’s ambitious outcomes based contract.

The NAO’s investigation, published on Thursday, is the latest of several critical verdicts on the processes around the collapse of the UnitingCare Partnership contract. It follows revelations in March that the contract collapsed when the provider demanded to be paid substantially more than had been agreed in the deal. It collapsed in December, just eight months into a five year deal.

The report is critical of the regulatory system, largely established by the Health Act 2012. It says while “each body acted within its defined role… no organisation held a holistic view of remaining risk in the system”.

It warns: “Without closer joint working or a more holistic view, there are significant risks for the sector that individual oversight decisions will not lead to the best outcomes for patients or for the system as a whole.”

Ms Hillier said: “As a committee we want to know who is accountable for this outcome. It is clear that there was insufficient overlap between the various parties tasked with overseeing the contract, and it is patients’ welfare that falls through the cracks when things go wrong.”

The report reveals the Department of Health, NHS England and NHS Improvement are “currently developing their approach to overseeing similar models”, apparently to mitigate these concerns.

The report is critical of the CCG; UnitingCare, which was owned by two Cambridgeshire NHS trusts; regulators; and other external advisers.

Its criticism of the in-house NHS advisory team, the Strategic Projects Team, is particularly significant because the NAO cites it as the main adviser “responsible for marshalling the different advice and writing a summary evaluation for the CCG”.

The report says: “There were important gaps in the specialist procurement advice to the CCG. The CCG engaged the SPT, as procurement advisers for the contract, as well as specialist financial and legal expertise from Deloitte and Gowling WLG.”

The report explains how the CCG’s legal advisers’ evaluation report “had highlighted a need to secure performance guarantees in the contract (which include parent guarantees)”, a problem also highlighted in an audit for the CCG published in March.

The new report adds: “This advice was attached to the Strategic Projects Team’s summary report evaluating the bids. However, it was not mentioned in the text, nor were the implications drawn out in the summary report or advice. The CCG did not seek such a guarantee in its contract…

“The CCG’s failure to secure a parent guarantee from UnitingCare Partnership left it vulnerable to having to fund any contractual losses.”

When its role was criticised in the Match audit, the SPT defended its management of the procurement, saying it welcomed “the report’s findings that the procurement process and financial evaluation was robust”.

The SPT has faced significant criticism in recent months. It has been involved in several other controversial projects, such as the franchising of Hinchingbrooke Health Care Trust and the East of England pathology services reconfiguration.

It is currently advising commissioners on contracts in Staffordshire worth a combined total of £1.2bn, although the procurement process for these was paused following the collapse of the Cambridgeshire contract.

The STP is part of the NHS Arden and Greater East Midlands Commissioning Support Unit, which is hosted by NHS England.

UPDATED on 14 Jul, 12:55pm

The SPT has responded to an invitation to comment from HSJ. A statement said: “We welcome the publication of the NAO Report in respect of, which we have today sighted and acknowledge its findings.

“SPT provided procurement advice in conjunction with legal and financial advisers to the requirements of the CCG. The contract was intended to be innovative and to produce substantial benefits to the CCG and as a consequence the parties agreed specific measures to reflect the need for this innovation.

“Specific mention is made of:

1. “ The procurement advisors conducted a limited assessment of United Care Partnership’s bid” and :
2. “There was no mention of the need to secure performance guarantees in SPT’s Evaluation Report”

Dealing with each in turn:

1. SPT acted as advisors to the CCG, we did not conduct an assessment of the Bids, the evaluation was undertaken by the CCG representatives together with GPs, patient groups, Health and Wellbeing Boards and local authorities. Legal and financial evaluations were undertaken by the respective advisors. SPT co-ordinated the evaluation and assisted where required.
2. As the Report states the potential need for performance guarantees was included in the legal evaluation report, but not specifically mentioned in SPT’s. The CCG were made aware by the inclusion in the legal report, non inclusion in our report did not preclude the CCG consideration of the need or otherwise for performance guarantees.