• Major outcomes based contract collapses after being deemed ‘financially unsustainable’
  • £800m Cambridgeshire and Peterborough deal was one of the largest ever tendered by the NHS
  • New older people’s service only went live in April
  • NHS-owned ‘lead provider’ consortium will hand contract back to commissioners

One of the biggest contracts ever put out to tender by the NHS has collapsed just eight months after going live, after commissioners and the provider consortium agreed it was not “financially sustainable”.

It has been announced today that UnitingCare Partnership has handed an £800m, five-year contract to provide older people’s care for Cambridgeshire and Peterborough back to Cambridgeshire and Peterborough Clinical Commissioning Group.

UnitingCare began running the services at the beginning of April this year.

The company is a limited liability partnership established by Cambridgeshire and Peterborough Foundation Trust, and Cambridge University Hospitals FT.

The deal is one of the largest ever tendered by NHS commissioners, and has also attracted attention for being an early, highly ambitious example of “outcome based contracting”, in which an element of payment depends on achieving agreed clinical outcomes.

A joint statement issued by Cambridgeshire and Peterborough CCG and UnitingCare today said: “Patients and frontline staff will see services remain despite a contractual arrangement between Cambridgeshire and Peterborough Clinical Commissioning Group and UnitingCare Partnership LLP ending.

“Unfortunately both parties have concluded that the current arrangement is no longer financially sustainable.

“We are clear that the innovative model of care for older people and people with long term conditions brings benefits for patients and the whole health and care system and we are all agreed that we wish to keep this model of integrated service delivery.

“The CCG will be working with providers of services in the coming days to ensure that there is a smooth transition for all concerned.”

HSJ revealed last year that the contract cost Cambridgeshire and Peterborough CCG over £1m to set up.

During the design and tender process the CCG had been advised by the NHS Strategic Projects Team – the unit which oversaw private provider Circle being brought in to run Hinchingbrooke Health Care Trust, as well as the abandoned procurements for George Eliot Hospital and Weston Area Health Trust.

The Strategic Projects Team is currently advising commissioners in South Warwickshire on a tender for community services.

The CCG was also supported by the COBIC consultancy, which has advised other CCGs seeking to bring in outcomes based contracts, including in Oxfordshire, Bedfordshire and Croydon.

A number of private providers, including Capita and Circle, initially expressed an interest in the Cambridgeshire and Peterborough tender but withdrew during the process because of the steep financial efficiencies required by the contract.