Private NHS contract 'farmed out to the lowest bidder', Public Accounts Committee finds

MPs warned the NHS against abdicating its responsibilities and said patients would suffer

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NHS contracts are being “farmed out to the lowest bidder without due regard for the interests of patients”, an influential committee of MPs have warned.

In a scathing report  Public Accounts Committee blamed failures in the NHS’s private procurement processes on the collapse of an £800 million contract to provide social care in the east of England.

The local NHS entered into the contract, in Cambridgeshire and Peterborough, in a “failure of commercial acumen”, the committee’s chair said.

The arrangement, with the UnitingCare Partnership, collapsed after just eight months after starting in April 2015 because the NHS and the private company could not reach a deal on costs.

A £16 million cost overrun shared between the local NHS commissioners and hospitals meant that reduced services were available for patients immediately following the debacle. 

The MPs’ inquiry found that the local NHS commissioning group “tried to outsource its own responsibility to commission local health services” – and recommended that this should not be tried again.

Meg Hillier, Chair of the PAC, said: “It beggars belief that a contract of such vital importance to patients should be handled with such incompetence.

“The deal went ahead without parties agreeing on what would be provided and at what price – a failure of business acumen that would embarrass a child in a sweet shop, and one with far more serious consequences.

“Services for patients are likely to suffer and we will be expecting the clinical commissioning group to come clean about precisely how much damage has been done in terms of future service provision and finances.

 She added that it was “understandable that those responsible for providing services will explore new ways of doing so” because of cost pressures. She however added:

“What is not acceptable is for services to be farmed out to the lowest bidder without due regard for the interests of patients and taxpayers in general.”