How the NHS wasted £16m of your money on a botched privatisation that collapsed within months


Meg Hillier MP:,chair of the Commons Public Accounts Committee, condemned the failings in the scheme


New ways of  helping the elderly and mentally ill survive in the community and not continually end up in hospital is a cornerstone of government policy.

So when a limited liability partnership offered a cash strapped  NHS commissioning group an initiative which promised better services for these people and could save them £178m over five years it sounded too good to be true.

The trouble is it was. As a devastating report from the National Audit Office reveals today the £800m scheme  ran into trouble just four weeks after it was launched and collapsed seven months later. You can read the full story on the Exaro website.

The scandal of the £800m scheme run by UnitingCare Partnership for Cambridgeshire and Peterborough clinical commissioning group may not be an isolated instance.That is why sources at the National Audit Office have highlighted it in their report – because it exposes an alarming lack of financial expertise inside the NHS and a flawed system to monitor whether projects like this are financially feasible  andcan  be properly checked.

The promised aim of the project was to establish  tapering payments to the partnership – with £152m up front and less money later, ¬ so that the financially challenged commissioning group could put money to better use.

But within four weeks of starting the contract the partnership was asking for an extra £34m, blaming a delay by the commissioning authority in starting the work. When the money was not forthcoming the scheme collapsed after eight months and the NHS was forced to provide services directly.

The NAO report reveals that despite employing reputable financial companies and lawyers, basic errors were made – including a failure to realise that sub-contractors could not recover the VAT from the partnership – a cost that had not been factored into the contract.

Auditors also report that nobody had overall oversight of the contract.

No wonder both Amyas Morse, the head of the NAO, and Meg Hillier, the Labour chair of the Commons Public Accounts Committee have been withering in their criticism.

Amyas Morse said: “This contract was innovative and ambitious but ultimately an unsuccessful venture, which failed for financial reasons which could, and should, have been foreseen.”

Meg Hillier said: “The result is damning: a contract terminated before the ink had even dried out, at an unnecessary cost of £16m.”

What is disturbing is that the NAO point out that Monitor, the body which checks health bodies, had no locus to check whether the scheme was viable and NHS England were too remote to act.”

The report says: ““No organisation was responsible for taking a holistic view of the risks and benefits of this approach, or considering whether the anticipated longer‐term benefits were sufficient to justify additional short‐term support.“

What is really disturbing  is that £16m was wasted -plus £8.9m  on setting up a complex tendering operation and start up costs.

Far better to have spent this extra money on patient and community care – instead of throwing our money down the drain on a scheme that anyone would have thought to be too good to be true.


6 thoughts on “How the NHS wasted £16m of your money on a botched privatisation that collapsed within months

  1. Does that mean that CCGs can do what they like with public money? If things go wrong is anyone supposed to be held accountable anywhere?

    “Monitor … had no locus to check whether the scheme was viable”? What about its responsibility to ensure continuity of services for patients?;

    Click to access Monitor-regulating-nhs-foundation-trusts.pdf

    “5 Monitor is an increasingly important part of the health system. Its responsibilities now stretch beyond regulating individual NHS foundation trusts to ensuring continuity of services for patients. Along with the other main regulator, the Care Quality Commission, Monitor is vital to making the reformed health system work effectively and giving the Department assurance in its stewardship role for the health system.”


    • Owen I am afraid it does.
      This is the relevant paragrapgh from the National Audit Office report:
      “Neither the Department of Health, nor NHS England, nor Monitor was responsible for holding a holistic view of the contract, or assessing whether the anticipated benefits would merit continued support of this innovative approach.
      CCGs and foundation trusts have significant statutory freedoms to make their own decisions. The regulators and oversight bodies acted in accordance with their statutory roles but, ultimately, regulatory checks on individual bodies’ risks did not ensure that the contract was viable. Monitor took assurance from UnitingCare Partnership’s actions to limit its financial contractual liability and assessed that the risk taken by Cambridgeshire
      and Peterborough NHS Foundation Trust was reasonable.
      The effect of the additional clauses was that the CCG bore more of the financial risk of the contract, without comparable scrutiny from NHS England. Each body acted within its defined role but no organisation held a holistic view of remaining risk in the system. The cost to the CCG and trusts of the set-up, bid and termination costs of the contract was £8.9 million.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.