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

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

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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.

 

Time for the NHS to come clean on its tax avoiding bosses

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An amazing piece of evidence revealing that they were up to 2,400 off pay roll people in the NHS was slipped into an inquiry by the House of Lords by the Department of Health last week.

The findings published today in a report by Exaro News reveals that as many NHS staff as Whitehall staff were avoiding paying tax and national insurance at source – bringing the total in government to nearly 5000 in 2012.

Now no doubt some people on short-term contracts can justify this but what is becoming increasingly clear from the evidence submitted by the Department of Health ( see page 91 onwards) that many do not.

The worst offenders appear to be high earners at the top of NHS Foundation Trusts – where over a third -51 out of 147 – had someone at the top avoiding paying tax and national insurance at source. Someone was even off pay roll and claiming a full pension from the taxpayer as well!

 Monitor,the regulatory authority for NHS Foundation Trusts, is currently conducting an inquiry into exactly who is benefiting – and as a result numbers are shrinking.

 But we don’t know yet whether Monitor is going to name and shame the trusts and the people taking advantage of this tax loophole. Well if the organisation  has got any teeth it should be like the National Audit Office  and publish a full and detailed report. Avoiding tax while working for the cash strapped NHS is particularly nasty and greedy and should be stamped out. Let’s see if Monitor is going to do its job.