"The tail’s wagging the dog": How outsourcing is eroding NHS services

The battle over outsourcing for Suffolk’s community health services in Sudbury is a warning for the rest of the country - the future of the NHS is going to be fragmented.

 

The market town of Sudbury, Suffolk (population: 12,080) is not what you’d call a hotbed of political activism. It’s a pretty little place: fringed by the river Stour, the rolling countryside to its south is the setting for some of Gainsborough’s most famous works. But it’s been the epicenter for a battle that’s been quietly raging for several months. It’s a battle which tells us some rather disturbing things about modern government, the health service, and the challenges both will face in the years to come.

Have no doubt - the issue of outsourced medical services will be the only discussion point for years to come. Only this month, Sir Bruce Keogh, the Government's medical director, admitted that some of his colleagues have been using the NHS to further their personal interests. This came after a survey by the British Medical Journal found around a third of doctors in charge of the new clinical commissioning groups have interests in private medical companies.

Our story starts in March 2012, when Serco was awarded a contract, due to begin on 1 October that year, to deliver all of Suffolk’s community health services. For this, it was to be paid £140m for three years’ service. Sudbury WATCH, a local campaign group, understands that it bid £10m less than its rivals. Suffolk Primary Care Trust denied the contract had been awarded purely on cost: the contract stipulated that the original standard of service had to be maintained.

Four weeks after the contract had been awarded. Serco began a consultation, which was issued to its new staff. It was not sent to the county council’s Health Scrutiny Committee, nor to the Local Involvement Network (now Healthwatch). It proposed to cut staff numbers from 790 by 137, but without making any compulsory redundancies among clinical staff.

After receiving disturbing reports from whistleblowers, campaigners began to believe the company was trying to get rid of higher band nurses and therapists. It would leave less experienced therapists doing complex work. They wrote to the Chief Executive of NHS Suffolk in November, and said:

“[It is not] any consolation that job losses will take place through “mutually agreed resignation” or MARS – just another clever way of getting rid of people at minimal cost [...] we are told that staff who refuse to agree to MARS are likely to be given jobs which will require them to drive all over the county as and when required, as well as work to new shift patterns into the evening – an impossibility for staff with young families. This is nothing short of; blackmail’.”

The campaign group received an anonymous letter suggesting that after the contract was awarded to Serco in March 2012, it was subsequently renegotiated over the next few months, in a manner favourable to Serco in breach of procurement rules, and that a substantial sum of money had been paid in September 2012, before the contract started to run in October.

The letter also noted that the company registered with CQC to run Suffolk health services (not Serco but a sub-company called Integrated Clinical Services) was set up a month before the contract was awarded. And that Serco had no track record in running community health services, so NHS Suffolk should have scrutinised the bid more carefully. It claimed the decision was politically driven by the Strategic Health Authority.

In December, Sudbury WATCH took action. It instructed solicitors to issue legal proceedings if NHS Suffolk did not halt the consultation. It argued that, as it involved patient care, the consultation should involve the public. Peter Clifford, the group’s head, told the Suffolk Free Press that he was “not prepared to see Sudbury’s health services wrecked again”. He added: “Combined with the cuts to occupational therapist numbers, community nurses, specialist and district nurses, general health workers and physiotherapists, the end result will inevitably be a serious reduction in the quality of rehabilitation and general care of the elderly.”

Serco claims that the 137 positions has been reduced to 95. However, a spokesman for Sudbury WATCH says: “The number is a red herring. This is about getting rid of experienced professionals. One thing that is for sure is that staff are demoralised. In fact, we understand that at present the company has received too many applications for voluntary redundancy.”

The Acting Chief Executive for NHS Suffolk responded to Sudbury WATCH at the end of last year in a bid to allay concerns. He said: “The CCGs will have the same priority for ensuring good patient care and value for money. Local scrutiny and public input will continue through the usual channels, through the emerging Healthwatch, the Health Scrutiny Committee and the Health and Wellbeing Board. In addition, Serco, like all providers, will be required to carry out regular patient experience surveys to help improve and shape services.”

It did not work. Today the WATCH spokesman tells me: “The legal action against NHS Suffolk and Serco has run into the sand at present because we are up against so much secrecy, fudge and obfuscation. Plus a lack of accountability: NHS Suffolk telling us to ask Serco, Serco telling us to ask NHS Suffolk.”

And all of this is deeply relevant at a national level. First there is a question of how “efficiency” is measured. Serco has already been caught out once this year after the National Audit Office reported it had fiddled its data when reporting to the NHS on targets it failed to meet with its out-of-hours GP service in Cornwall.

Time and again I have blogged on how the target-driven culture of outsourcing contracts doesn’t take into account the human element. In Suffolk Serco claims efficiency savings will be generated through hand-held computers. Sudbury WATCH claims that while there’ll be increased assessments they’ll be carried out by less experienced staff, and so the quality of interaction will diminish. The group says that the company is ultimately relying on crude activity analysis of dubious and unreliable statistics gathered in Suffolk in the past couple of years.

And for the umpteenth time we see a clear issue over the lack of transparency surrounding the outsourcing process. Sudbury WATCH’s spokesman says: “Our biggest problem has been securing information. Before the work was outsourced, the PCT’s job was to consult publicly. They could be challenged, but now commercial confidentiality laws mean It’s been very hard for our lawyers to pin them down over their decision making. There’s a real sense you’re dealing with a private company, not the NHS. Freedom of Information requests are met with commercial confidentiality defense, and Serco isn’t even subject to the act. The tail’s wagging the dog.”

And those who have heard about the Government’s stated aims of increasing integration would be right to wonder at how it’ll work in practice. At present a patient might be welcomed to one of Suffolk’s acute hospitals, then be sent to a non acute bed commissioned by the Clinical Commissioning Group (which has replaced the PCT), which is situated in a care home run by The Partnership in Care (another private business), and then be visited by nurses now working for Serco. Is this the fragmented future of public health?

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In response to the claims put forward in the anonymous letter received by Sudbury WATCH, a spokesman for NHS Suffolk told the New Statesman:

“The process to find a new home for community health services in Suffolk was led by a project board. This board consisted of members of the NHS Suffolk board, local GPs, Suffolk Community Healthcare staff, members of patient representative groups, a staff union representative and an NHS Strategic Projects Team.

“Serco was named as the preferred bidder in March 2012 and was chosen as being the organisation that would deliver the best level of healthcare for patients, good opportunities for staff and value for money for the taxpayer.

“The procurement process was run in an entirely proper, appropriate and normal fashion. This process adhered to the guidelines set out by the Cooperation and Competition Panel, which include a formal complaints and appeals procedure. No formal complaints or appeals have been received.

“After being named as the preferred bidder, Serco and NHS Suffolk went through the standard procedure of due diligence and contract finalisation with a schedule of contract payments being agreed. Payments began at the end of September 2012 and have been running regularly ever since.

“Integrated Clinical Services is a company that was established by Serco with the agreement of NHS Suffolk, NHS Pensions and Suffolk Community Healthcare staff as the appropriate vehicle for employing staff and ensuring they retained their proper NHS pension rights.

“Community health services are still being provided by the NHS, delivered free to patients and are subject to the same high standards of patient care and excellence.”

The celebration of the NHS during Danny Boyle's Olympics Opening Ceremony last year. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.