This article gives an overview of the failures that have taken place when non-NHS organisations (private and not-for-profit) have been awarded contracts to run NHS services. Failures have taken place across the full range of NHS services – from hospitals to community care to mental health services. What is behind these failures varies, but often the need for a private company to make a profit to satisfy shareholders or the owners of the business is implicated. This need for profit can lead to cost-cutting, such as not employing adequate numbers of staff, or having adequate infrastructure in place to carry out the contract. There are also issues of communication between a non-NHS organisation and the NHS that come in to play.
Failures of contracts between the NHS and non-NHS organisations have happened over many years, but the Covid-19 pandemic, took problems with non-NHS organisations and contracts with the NHS to a whole new level. Some of the issues are outlined here, but also check out our section on Covid-19 contracts with the private sector and the article Test & Trace – a major failure of contracts with private sector.
There are numerous examples of contract failures, too numerous for this single article, but if you search ‘contract failure’ on this website you will find many more examples.
Covid-19 contracts
The Covid-19 pandemic, which began in March 2020, has proved to be a major opportunity for private sector involvement in health care in the UK. In March 2020 several months of intense contracting activity began by government departments. By end-September 2021, the UK government had awarded £41.3 bn worth of contracts and by February 2022 £45.7 bn worth of contracts related to the coronavirus crisis to private companies, according to data collected by Tussell, a data provider that tracks state contracts across all areas of public services.
In March 2020, the government brought in the use of emergency procedures for contract awards, under which no competitive tender process had to take place. This meant the process of awarding the contracts became opaque. The government departments involved, however, still had to publish the final award notice either on the Contracts Finder database or the TED (Tenders Electronic Daily) database, both accessible to the public, within 90 days of the award. Despite these rules, many award notices were not published within this time period.
It is fair to say that the whole process of awarding contracts for Covid-19-related services has been full of failures. In November 2020, the National Audit Office (NAO) published two damning reports on the government’s buying and outsourcing procedures since March 2020. The reports criticised the use of ‘VIP’ channels for companies that had connections with MPs, the Conservative party and its contacts, and also the massive amount of money wasted on buying PPE. A summary of the reports can be found here.
Many of the contracts that have been highlighted in the media as having problems, some of which are now subject to legal challenges. The contracts relate to products and services, with many contracts covering PPE that was unusable by the NHS. The full table can be found here.
One of the biggest contract failures of the Covid-19 pandemic has been the test and trace system. Although often referred to as the NHS test and trace system, the NHS has had little to do with it, with the vast majority of contracts given to private companies, in particular Serco.
Serco was awarded a contract to recruit thousands of people to carry out contact tracing for the tracking and tracing operation vital for controlling the virus outbreak. In May 2020, it was found that Serco had already managed to share the email contact details of 300 new recruits for contact tracing. This incident is a matter for the Information Commissioner to investigate as a breach of data protection legislation.
By August 2020, many stories had emerged of how poorly the test and trace system run by Serco and the company Sitel was performing. One of the major criticisms is that although a big fanfare was made of the recruitment of 20,000 contact tracers when the system launched in May, many call-handlers came forward to say that they have had little work to do. Contact tracing is a specialist skill that needs tact to obtain sometimes sensitive information from sick individuals, but the contact tracers recruited by Serco and Sitel had little or no experience and were given minimal training when hired on near-minimum wage.
It was revealed in August 2020 that just 56% of close contacts handled online or by call centres run by Serco and Sitel were being reached. In contrast, the local council’s contact tracers in the Blackburn with Darwen area managed to contact 90%, one of a growing number of councils that set up their own systems due to frustration with the centralised Serco/Sitel system.
In October 2021, the Public Accounts Committee produced a damning report on the test and trace system in which it stated that the system had failed to achieve “its main objective” to cut infection levels and help Britain return to normal despite being handed an “eye-watering” £37bn in taxpayers’ cash.
The privately run test and trace system is full of failures and a full overview can be found here.
Mental Health Services
The NHS has a large number of contracts with private providers for mental health services, both residential and in the community. The last few years have seen a succession of highly critical reports by the Care Quality Commission (CQC) on residential mental health services with many rated “inadequate” and others closed completely or to new patients.
The three leading companies, The Priory, Cygnet Healthcare, and Huntercombe Group (now Active Care Group) have all had to close wards as a result of damning CQC reports, and St Andrews Healthcare the leading not-for-profit in the sector has had severe limitations put on its services due to CQC reports.
In September 2019 the CQC published a report on residential mental health, noting that it had found 28 mental health units run by private companies to be “inadequate” in the past three years. The Royal College of Psychiatrists was so concerned about the poor standards of care that it wrote to the secretary of state urging him to commission a public inquiry led by a high court judge.
But despite the numerous reports of serious incidents, including suicides, bullying and abuse, the NHS is so short of capacity for mental health patients, that it has continued to use these private companies.
In November 2017, the CQC reported that people with drug and alcohol addiction are being put at risk of harm at many independent residential rehabilitation units. The CQC report found that nearly three-quarters of private clinics were failing to hit regulatory standards of care. The report was based on inspections of 68 independent services providing residential detoxification services over the last two years. The CQC required 49 providers (72%) to make improvements because they had breached regulations of the Health and Social Care Act 2012 and failed to meet fundamental standards of care. The CQC took enforcement action against eight providers.
Hospitals run by the Huntercombe Group (now Active Care Group) have received critical reports after inspections by the CQC. In October 2022, an investigation by The Independent and Sky News found that there had been a decade of “systemic abuse” of patients at hospitals owned by The Huntercombe Group. Patients who came forward spoke of being “treated like animals” , with the use of “painful” restraints, being held down for hours by male nurses, being stopped from going outside for months and living in wards with blood-stained walls. They also allege they were given so much medication they had become “zombies” and were force-fed. As a result of the revelations the DHSC launched an investigation into the allegations of 22 young women who were patients in units run by The Huntercombe Group.
The company’s hospital in Maidenhead, which provides NHS-funded mental healthcare for children, was put into special measures by the CQC in February 2021 after an inspection raised serious concerns over the apparent over-use of medication to sedate patients, among other issues. It has since received a further warning notice. However, the HSJ reports that multiple concerns were being raised about the hospital for several years before it was rated ‘inadequate’.
Five former patients and four parents have told HSJ of poor care and practices at the unit between 2016 and 2020. Two of the families raised concerns directly to Huntercombe, as well as NHS England, local authorities and the local community provider, Berkshire Healthcare FT.
In December 2018, an inspection by the CQC of the company’s hospital for children and adolescents in Norwich found serious concerns. The CQC took immediate action to protect those using the service, including enforcement action to remove the registration for the hospital. The Huntercombe Group then closed the service and the patients had to be found places elsewhere.
Earlier issues with the company’s hospitals, include in September 2017, Watcombe Hall, being closed indefinitely after the local NHS hospital raised concerns about the number of young patients being admitted from the unit suffering from malnutrition and dehydration and in 2016, the company’s hospital in Stafford was placed in special measures and told to urgently improve in 24 areas.
Cygnet, a specialist mental health provider which operates more than 150 facilities across the UK, which between them have more than 1,000 beds, has been repeatedly criticised by the CQC. Such was the level of failures that in April 2021, a letter was sent to Cygnet management by Claire Murdoch, the national mental health director, and John Stewart, national commissioning director, which HSJ reported warned Cygnet that “patients deserve better” and they will “not hesitate to take further action” if improvements are not made. The letter noted their concern and disappointment with regard to the repeated service failures and that they are not decreasing in number. The letter also noted that NHS England had been meeting with senior management in Cygnet since February 2020 to address the issues. Cygnet’s CEO is Tony Romero and the company has an advisory board that includes former Royal College of GPs chair, Clare Gerada, and Lord Patel of Bradford, who chairs England’s social work regulator.
There have been at least 21 deaths of patients at Cygnet hospitals across the UK since 2011, according to the organisation Inquest. In March 2022, an inquest concluded that the death of Emma Pring at Cygnet’s Maidstone hospital in April 2021 could have been prevented by the hospital, with the jury finding there had been an “insufficient level of observation, and a misjudgment of Emma’s actual risk”. Pring was not placed on one-to-one observations which might have prevented her death. An inquest following the death of 17-year-old Chelsea Blue Mooney at a Cygnet hospital in Sheffield in April 2021, found that “insufficient care” at the hospital had led to her death.
In June 2021, the CQC published a review of how Cygnet Healthcare was performing in terms of management – also known as a ‘well-led assessment’. The review followed-up on a 2019 review triggered by the Whorlton Hall scandal (although Cygnet did not own this hospital at the time of the scandal).
Some of the most damning conclusions to come from the 2021 review once again concerned the management within the company. The CQC found that the company did “not have a longer term strategic plan” and “members of the senior leadership team were not able to articulate which groups of service users they were planning to support in the future and how they would ensure they had the appropriate estate and skilled staff to meet their needs. ” A consequence of this management approach, noted the report, was that “Cygnet had continued to close and ‘repurpose’ services and at times this took place with short notice and in response to serious concerns,” which had an adverse impact on the care of service users and caused distress to patients.
From January to September 2019, mental health units run by the company were found to be inadequate by the CQC six times. From October 2018 to January 2020, 10 of Cygnet Healthcare’s hospitals were rated “inadequate”. However, in 2021 alone the CQC has rated seven of Cygnet’s facilities as ‘requires improvement’ and three as ‘inadequate’, plus Cygnet Appletree Hospital in Durham, which has not received a rating but was given an urgent enforcement notice and restricted patient admissions.
Three of the most recent ‘inadequate’ ratings were in September 2021 Cygnet Views, the company’s hospital in Matlock Cygnet Hospital Hexham in July 2021 and in August 2021, Cygnet Wast Hills. The latter hospital was placed in special measures, but despite Cygnet saying improvements were in progress, the hospital was rated ‘inadequate’ again in early 2022. Among the criticisms from the CQC, was that the hospitals’ leadership had a “poor oversight” of the hospital environment. Overall the CQC said that the hospital was “not suited to modern day psychiatric care”.
There have been many more reports of poor practice and hospitals being rated “inadequate” by the CQC and more detail can be found on our profile of the company on this website.
The Priory, the country’s leading provider of mental health services, owned by Waterland, a Dutch private equity group, has been the subject of several reports of failures in care in recent years, including patient deaths.
In November 2020, the CQC downgraded the company’s hospital in Middleton St George, Darlington from outstanding to inadequate and placed it in special measures. The CQC made an unannounced inspection in September, prompted by whistleblowing and notifications from the service indicating high levels of self-harm among patients. The CQC found that the service had insufficient levels of permanent staff and was highly dependent on agency workers who did not always have the correct training. Governance and recordkeeping was also criticised and did not always comply with policies.
An inspection of the company’s Keston Unit, part of Priory Hospital Hayes Grove, in September 2020 led to the CQC telling The Priory that it must make urgent improvements. The unit caters is a specialised mixed gender unit for adults who have a diagnosis of Autistic Spectrum Disorder (ASD) with psychiatric co-morbidities, people with ASD and mild learning disabilities. Previously in January 2020, a CQC inspection rated the unit inadequate and placed a condition on
the provider’s registration, preventing it from admitting patients to the Keston Unit until improvements had been made. In September, inspectors found that the unit had failed to make sufficient progress since January and that the quality of care and treatment provided remained unsafe and compromised people’s privacy and dignity. The Priory Group has now decided to close the Keston Unit by the end of 2020.
Also in 2020, The Bristol Cable published an expose of The Priory Group’s hospital in Bristol. In July 2020, the Cable reported that Banksy ward in the hospital was closing down less than three years after opening because of staffing problems. The patients had to be transferred to the nearest ward of its kind 100 miles away in Maidenhead.
Allegations from staff and former staff include that staffing levels on the ward were too low to deal with incidents, such as self-harm, and the high needs of the patients. There were physical attacks on staff and the high number who left meant that the hospital had to rely heavily on agency staff.
Admissions to the ward were halted in Autumn 2019 after an internal investigation by the Priory. The ward was reopened to new patients a few months later, but following discussions with NHS England, has now closed. The police are investigating a serious incident on the ward in June 2020.
In July 2019, the CQC placed two of the company’s hospitals in special measures – Priory Hospital Blandford in Dorset and Kneesworth House in Royston, Hertfordshire. The hospitals were found by the CQC to be unsafe and uncaring and rated them both as inadequate. The hospitals have been given up to six months to show improvement or face closure.
Earlier in the year in February, the Priory’s hospital for children with learning disabilities in High Wycombe was closed, following a CQC report that gave the unit an overall rating of ‘inadequate’. The hospital had only opened in April 2018 and catered for children aged 13 to 17 with learning disabilities and/or autism.
In 2018, two of the company’s hospitals – Southgate, North London, and Roehampton – were rated “requires improvement” overall by the CQC.
In 2016, an inquest ruled that the death of a 14 year old Amy El-Keria at a Priory hospital in 2012 was as a result of months of serious failings at the hospital, including staff failing to pass on the fact that she had spoken of wanting to end her life. Also in 2016, the family of 17-year-old Sara Green, who died in the Priory Royal in Cheadle in 2014, called for the company to have its NHS contract cancelled. In March 2016, the Priory and Solent NHS Trust admitted liability for the death of 15-year-old George Werb, who had been a patient at the Priory Hospital Southampton.
There are numerous examples of failures in hospitals run by other companies. In April 2022, the private Shoen Clinic in York, which treats eating disorders was put into special measures by the CQC due to multiple failures. The clinic which treats NHS patients has six months to improve or face closure. In June 2019, St Andrew’s Healthcare’s hospital in Northampton was rated “inadequate” by the CQC. The watchdog had found that adolescents were kept in unsafe seclusion rooms for excessive amounts of time and without beds, blankets or pillows. It was reported that some patients had been in seclusion for years and earlier in 2019 the BBC’s Victoria Derbyshire programme was given footage of a teenager reaching their arm through a door hatch to enable contact with their parents during a visit to the hospital.
In October 2021, the CQC ruled that two Staffordshire hospitals, John Munroe Hospital in Rudyard and Edith Shaw Hospital in Leek, run by the company John Munroe Group, can no longer admit patients without permission from regulators, after inspectors flagged multiple instances of poor care, including patients being pushed and laughed at by staff. The hospitals were rated “inadequate” for a second time.
Long-term Care
Long-term care and intermediate care sector covers services provided by residential nursing/care homes and care provided within your home. After 30 years of a policy of privatisation in this sector, service provision is almost exclusively by the private sector.
The privatisation of social care was supposed to lead to better care and more choice for people; what it has led to is a system of declining care standards, widespread financial instability, poorly paid staff, and money siphoned off to tax havens. The long-term care system is on the brink of collapse and one could say that the entire system is an example of a massive contract failure. More details can be found on our Sector overview of Long-term Care.
In March 2022, Care England CEO Professor Martin Green OBE warned that the country had reached a “pivotal point” in determining the future sustainability of adult social care, adding the government’s plan for reform was “largely underfunded”. He called on Chancellor Rishi Sunak to address social care underfunding ahead of the Spring Budget on 23 March 2022; social care underfunding was not addressed.
The failure of Southern Cross in 2011 is one of the most well-known contract failures in long-term care. CHPI notes that the company struggled with debt and reduction in income there was a “reduction in property maintenance, which in turn led to lower occupancy; loans attracting higher interest rates because the company no longer had properties against which to secure loans; a fall in market confidence and the share price; and poor management and quality of care, which led to adverse inspection reports and further decreases in occupancy levels.” As it was a private company, the local authorities had no control over the situation, all they could do was try and pick up the pieces after its final collapse.
In March 2017, an investigation by OPUS, Company Watch and BBC Panorama found that care firms have cancelled contracts with 95 councils, saying they cannot deliver services for the amount they are being paid. The research also found that 69 home care companies had closed in the preceding three months and one in four of the UK’s 2,500 home care companies is at risk of insolvency.
In March 2017, Mitie sold its home care division to specialist healthcare investor Apposite Capital for just £2; Mitie bought the division for £111 million in 2012. Mitie blamed cuts to payments by local authorities and the increase in minimum wage.
More recently in November 2018, the CQC issued a report on the financial status of Allied Healthcare, one of the UK’s leading homecare providers; Allied Healthcare was due to make a large loan repayment at the end of November 2018 but there appeared to be insufficient funds. The report noted that the company might not continue trading after the end of November 2018. A letter to all councils and CCGs advised them to make contingency arrangements in the event of the company withdrawing from contracts.
Hospitals
The Covid-19 pandemic has given the private hospital sector major opportunities to work for the NHS. In March 2020 the government agreed a contract to block-book the entire capacity of all 7,956 beds in England’s 187 private hospitals along with their almost 20,000 staff. It is reported to have cost around £400m a month. The plan was for the private hospitals to treat covid-19 patients as well as providing Covid-19 free hospitals to carry out NHS elective surgery and cancer treatment, as the NHS hospitals began filling with Covid-19 patients.
However, in October 2021 the Centre for Health and the Public Interest reported that on 39% of days between March 2020 and March 2021, private hospitals treated no Covid patients at all and on a further 20% of days they cared for only one person. Overall, they provided only 3,000 of the 3.6m Covid bed days in those 13 months – just 0.08% of the total.
Prior to the pandemic, private hospitals undertook 3.6m NHS-funded planned procedures in 2019, that dropped to only 2m during the first year of the pandemic – a fall of 43%. The House of Commons public accounts committee, was shown two letters to the wider NHS explaining why the deal had been struck and what it would cover, which make it clear that it would include care for Covid patients with serious breathing problems as well as routine operations, such as hip and knee replacements. However, The Independent Healthcare Providers Network, which negotiated the deal on behalf of private hospitals, insisted that it was never intended to cover people with Covid.
Chair of the committee, Labour MP Meg Hillier, said the findings showed the government and NHS had got poor value for money from the very expensive deal.
“Taxpayers have covered an entire year of private hospitals’ costs in return for less treatment and care than before, and many of them now feel forced to pay those same private hospitals over again in the face of an NHS beset with lengthy backlogs.”
The most well-known contract failure in hospital services is that of Hinchingbrooke Hospital and the contract for its management with Circle. The ten year contract was awarded to Circle in 2013, but just two years later in January 2015, Circle pulled out of the contract.
The company pulled out just before the publication of a CQC report. The CQC found a catalogue of serious failings at the hospital that put patients in danger and delayed pain relief. The hospital was put in to special measures, the first time the CQC had had to do this. Circle cited financial reasons for pulling out: under the contract the company was allowed to withdraw if it had to invest more than £5 million of its own money in the hospital and it looked extremely likely that it was going to have to invest much more than £5 million.
In December 2013, Serco announced that it would be pulling out of its contract for running Braintree hospital in Essex before the end of the contract. In March 2014 the contract was handed back to the Mid Essex Hospital Trust nearly a year early. The company’s other major contract with the NHS for community care in Suffolk has not reaped the profits the company was hoping for and by August 2014, the company announced that it was withdrawing from the NHS clinical services market altogether.
In September 2015, when Serco handed over the community care contract in Suffolk to new providers, the company noted that the £140 million the company was paid for the contract was “not adequate” for the work. Serco estimates that it had made an £18 million loss on its three NHS contracts.
Surgery
The safety of NHS patients who have surgery carried out in the private sector has been a concern for many years, with questions over their lack of ICU beds, use of registered medical officers, lack of transparency, communication issues with the NHS, and even the use of individual rooms. The issue of NHS patient safety has been investigated by the Centre for Health and the Public Interest (CHPI).
CHPI conclude that NHS commissioners and clinicians would find it difficult to avoid blame, and possible legal consequences, if NHS patients are harmed in private hospitals. Particularly now that the risks are openly documented.
This raises the issue of the cost of these referrals, both in the short term and the long term. In the short term, the cost of treatment for NHS patients in private hospitals is much higher than it would be if they could be treated in NHS facilities. Moreover, if something is to go wrong and there are legal consequences then it is the NHS that may have to pick up the bill in the long term.
In another report, the CHPI also document the safety issues in private hospitals following the scandal whereby surgeon Ian Paterson wounded 500 women who underwent unnecessary breast surgery in private hospitals. They conclude that until the private hospitals have full liability for the patients under their care, then there will be no guarantee of safety.
The Paterson scandal led to a public inquiry that released a damning report in February 2020 stating that the private healthcare system he worked in was “dysfunctional at almost every level”. However, the government has yet to make the major changes in the report that would have improved patient safety in private hospitals. In November 2021, the safety of the independent hospital sector was once again under the spotlight in a report released by the HSIB (Healthcare Safety Investigation Branch) – Surgical Care in Independent Hospitals – triggered by the death of a NHS patient sent to an independent hospital for bowel surgery. The report made six safety recommendations, three to NHS England and NHS Improvement, one to NHSX, and two to the Care Quality Commission (CQC).
Circle was the private provider involved in the privatisation of Nottingham’s dermatology service, which in June 2015, was described by an independent report as “an unmitigated disaster”. Once part of a national centre for excellence at Queen’s Medical Centre, it is now much reduced, with some patients sent to a centre in Leicester. When Circle won the contract, several consultants refused to transfer from NHS contracts, leaving the dermatology service with few consultants and Circle had to employ locums.
In June 2013, the NHS temporarily stopped referrals to BMI Healthcare’s Mount Alvernia hospital, in Surrey, following a Care Quality Commission report which found serious failings on patient consent, care, cleanliness, staffing levels and service quality monitoring. The report noted some staff had told inspectors breaches had been caused by initiatives designed to “save money” or for “logistical and financial reasons”
Provision of out of hours care
Urgent care covers the NHS 111 services, walk-in centres and out-of-hours (OOH) GP services. There have been a number of failures with contracts awarded to private providers.
In November 2018, Allied Healthcare, the parent company of the OOH provider Primecare, was found to be in financial difficulties. The Care Quality Commission, concerned that the company would have to suddenly cease trading, sent local NHS commissioners and GPs letters advising them to find new providers of these services by the end of November. Primecare gave GPs at 20 Birmingham practices just 10 days notice that they needed to seek replacement out of hours cover.
Primecare has had difficulties delivering services in other areas, even before the financial situation reached a crisis. In early September 2017, Primecare, which had been awarded one of the first integrated NHS 111 and GP out-of-hours services contracts, announced that it would be handing back the contract to the NHS. Initially this was to be in July 2018, but then in late September 2017 the company invoked a clause in the contract that meant it only had to give three-months notice; Primecare then left the contract in December 2017.
The contract began in January 2017, but after only seven months, Primecare was placed in special measures after its services in East Kent were rated “inadequate” by the CQC. Failings included not assessing risks to patients’ health and not having enough staff to meet patient needs.
Primecare provided OOH and urgent care services across a large swathe of the Midlands.
The company Vocare, began as a not-for-profit organisation, but in March 2017 converted to being private and was then sold to Totally plc. Vocare has been awarded several OOH and urgent care centre contracts across England.
In December 2017, Vocare’s urgent care centre at the Royal University Hospital, Bath, was rated ‘requires improvement’ by the CQC, which found inadequate equipment, including children’s oxygen masks, that had expired at least nine months before. The centre was also told to improve its leadership and effectiveness. Vocare has since lost this contract. Several of its other urgent care centres were heavily criticised by the CQC and rated ‘requires improvement’ in 2017/2018, including the Paulton urgent care centre, Wolverhampton Urgent Care Centre, St Mary’s Urgent Care Centre, and North Staffordshire urgent care centre.
In September 2017, Vocare’s urgent care service in Staffordshire, run under name Staffordshire Doctors Urgent Care, was given a ‘requires improvement’ rating by the CQC. Inspectors reported that the safety, effectiveness and leadership of the urgent care service was not up to standard, with lower standards at the weekends with under-pressure staff struggling to meet performance and response time targets.
In August 2017, Vocare’s out-of-hours GP service in Somerset was rated ‘inadequate’ by the CQC and it was put in special measures. The company struggled to get staff to run the service, particularly at the weekend. Vocare left the contract early in April 2018, reportedly by mutual agreement with the CCG.
In September 2016, Verita produced a critical report on Care UK’s urgent care contract in Ealing. The contract awarded by Ealing Primary Care Trust in 2011 was worth £3.9 million to run an urgent care centre in Ealing Hospital. The independent report by Verita was triggered following complaints of poor care made to ITV reporters. The report noted that there was a gap in the assurance process carried out by the CCG as well as problems with the staffing model used by Care UK, which “took no account of predictable peaks in demand”.
Care UK terminated a contract to provide NHS GP OOH services in April 2015. The contract was to provide care in conjunction with Portsmouth Health Limited (a group of local GPs), however the deal, which began in 2012, proved to be loss-making and so Care UK ended its involvement before the end of the contract.
Similar tensions around costs-cutting were reported to be at the heart of the difficulties experienced by the out-of-hours company Harmoni (now owned by Practice Plus Group) in London. In 2010/2011 several GPs complained about an aggressive cost reduction agenda that they felt put their patients at risk.
In May 2016 Central Nottinghamshire Clinical Services, the private company in charge of OOH services across the East Midlands, announced it was filing for administration. It stopped its services in Leicester, Leicestershire, Rutland and north Nottinghamshire and they were transferred to another provider. The company also ran care home support services and these were transferred to Nottinghamshire Healthcare Trust.
In December 2013 Serco announced that its contract to provide out-of-hours care in Cornwall for Kernow CCG would end 18 months early. The contract had been dogged with controversy; Serco had to admit that some of its staff had falsified data to make the company’s performance appear better than it was and whistleblowers had raised concerns about poor staffing levels. The Public Accounts Committee reported the service to be falling “unacceptably short” of essential standards of quality and safety. In 2013 Serco unsuccessfully tried to sub-contract the work to Devon Doctors, the GP consortium that had failed to win the original bid; Serco had won the bid as it was cheaper.
Provision of GP services
Private companies are closing GP practices in areas where it is difficult to make a profit, as well as leaving contracts due to management problems.
DMC Healthcare had a number of contracts for GP surgeries in the Medway area. However, when the Care Quality Commission (CQC) visited in mid-2019 it found serious concerns with the quality of healthcare. Enforcement action was taken against the company and DMC Healthcare was removed from running five surgeries and suspended from three others. This left the company actively running only one surgery in the area. DMC had taken over running the surgeries all within the last two years.
Following this move, DMC Healthcare notified NHS chiefs that it would be handing back its £4.1 million contracts in Medway as with only one surgery being actively run by the company it was no longer viable to continue the contract.
In late 2018, IMH (Integral Health Holdings) took over the management of five GP surgeries in Swindon and patients began to complain about difficulties in getting through to the surgeries, being unable to make appointments and of having appointments cancelled at the last minute. By August 2019 all five of the surgeries had received damning Care Quality Commission (CQC) reports and had been placed in special measures. In July 2019, IMH quit the contract and the CCG began the process of finding replacements to run the surgeries.
In Brighton and Hove, The Practice Group (now Operose) terminated its contract for five GP surgeries in the city at the end of June 2016, leaving 11,500 patients looking for a new GP. Over the years, The Practice Group, which runs around 50 GP surgeries, has also closed a surgery in Camden Road, London, the Maybury surgery in Woking, the Brandon Street practice in Leicester and the Arboretum surgery in Nottingham. All these surgeries were in areas of high deprivation, where it is difficult to make money. The Practice Group defended terminating the contracts and closing services, saying that loss-making activities were unsustainable.
The private limited company Danum Medical Services Ltd was set up in Doncaster by 23 local practices and had 63 individual shareholding GPs. The company held APMS contracts for six practices in the Midlands and Yorkshire. In March 2016, DMSL went into administration leaving individual GP surgeries in debt, with one surgery reported to be facing losses of £20,000.
In February 2014, the CQC criticised Virgin Care (now HCRG Care) over its use of non-medically trained receptionists to assess patients in its Croydon Urgent Care centre. CQC inspectors found the centre was in breach of four basic standards of care.
Over the years several GP surgeries run by Concordia have been thrown into disarray after contracts have run out, or where Concordia has pulled out early. In March 2017 in Merton, only three days before the end of a Concordia contract, almost 4,000 patients were left without a GP. In 2014 Concordia Health pulled out of a contract for a GP surgery in Dover, leaving less than a month from breaking the news to leaving the service. This left almost 3,500 patients with having to find a new GP. The company had pulled out of a similar contract in Broadstairs earlier in the year.
In October 2016, Greenbrook Healthcare announced its intention to hand back an APMS contract for five GP surgeries in west London nine months before the end of the contract. This puts around 27,000 patients at risk of losing their GP. Greenbrook Healthcare has been in discussions with NHS England since early 2016, however no additional funding has been offered. The company stated that due to rising demand and problems with GP retention the contracts have become “unfit for purpose”.
Horizon Health Choices Ltd was a private company set up by 54 GP surgeries in Bedford and the surrounding area. In November 2016 the decision was announced to liquidate the company due to problems with recruiting GPs and internal management issues. The liquidation of the company will lead to the closure of one GP surgery and the loss of thousands of pounds by the surgeries that had invested in the company.
Diagnostics
In early 2020 Bestcare Diagnostics went into voluntary liquidation leaving several staff unpaid. The company had provided sonography services across much of Greater Manchester – including in Rochdale, Wigan and Oldham – over the previous four years. Lead commissioner Salford CCG stepped in to stop the Stockport-based company from practising in December 2019 due to ‘concerns over the quality of the service being provided’.
Bestcare Diagnostics was suspended by Coastal West Sussex CCG in 2018 over “quality” issues, with a clinical harm review initiated in 2019. In April 2021 the review found that 29 patients suffered severe or moderate harm due to quality issues with ultrasounds carried out by the independent provider. The review examined scans of 1,800 patients carried out by two sonographers employed by Bestcare Diagnostics.
The two sonographers involved worked in West Sussex between April and August 2018 carrying out non-obstetric ultrasounds, meaning issues with the scans potentially happened three years ago. Bestcare held an any qualified provider contract with the CCG from April 2017, although it is only scans carried out by two sonographers which have been reviewed.
Pathology
In pathology the most widely reported problems have been with the company Viapath, established by Serco in partnership with Guy’s and St Thomas’ hospitals, In 2014, Viapath was found to have overcharged the NHS for diagnostic tests. The venture has also been dogged by allegations of cost-cutting and clinical failings. Internal documents showed amongst senior consultants who claimed that staff cuts and a lack of investment since privatisation left some laboratories close to disaster.
For failures in the pathology arena, see also the entire failure of the test & trace system for Covid-19.
Emergency care and ambulance services
One of the most controversial failures in ambulance services was the Coperforma contract in Sussex for non-emergency patient transport. This four-year contract worth £63.5 million was awarded in 2015 by seven CCGs in Sussex. Coperforma replaced the NHS’s South-East Coast ambulance service (SECamb) on 1 April 2016; it was then just a matter of days, before problems with the contract hit the headlines. By mid-April local and national press were reporting on a service in chaos, with crews not turning up to pick up patients leading to missed appointments and patients languishing for hours in hospitals awaiting transport home. Patients included those with kidney failure with appointments for dialysis and cancer patients attending chemotherapy sessions. The GMB union representing the ambulance crews said it was an “absolute shambles”. Finally, in October 2016, Coperforma were forced to give up the contract.
In 2018, Coperforma went into voluntary liquidation and in 2019 HSJ reported that the company had just a few thousand pounds in its bank accounts and owed £11.3m to unsecured creditors, including NHS organisations and suppliers of ambulances and staff. CCGs had launched legal proceedings to try and get back the millions owed. In March 2022, the CCGs finally got back a “significant” amount of money from a company called Sinocare Group Ltd, based in Hong Kong; this was one of the parent companies of Coperfoma.
ln September 2017, the private ambulance company, Private Ambulance Service contracted to run non-emergency patient transport from hospitals in Bedfordshire and Hertfordshire went into administration. The business, which ran 126 vehicles and employed 300 people, took over the contract in April 2017. Problems had been reported with the service, with Herts Valleys CCG issuing an apology after ongoing performance issues, including leaving vulnerable patients stuck in their homes or in hospital for hours waiting for transport.
In September 2015 the transport company Arriva was found to have wrongly claimed £1.5 million in bonuses on the contract to run non-emergency transport for NHS patients in Manchester.
Community Services
Community services, covers a wide range of services provided in the community, including many services that would previously have been provided in a local hospital.
In May 2021, the Care Quality Committee reported that patients have come to avoidable harm after the large private provider Healthcare at Home failed to deliver thousands of medicine prescriptions. Healthcare at Home provides NHS-funded care and medicine supplies to patients’ homes across the country, was rated “inadequate” and placed in special measures. CQC inspectors found more than 10,000 patients missed a dose of their medicine between October and December 2020 due to problems caused by the introduction of a new information system. Reviews have found some suffered avoidable harm as a result. Between April and October there were more than 13,000 incidents involving a missed dose of medicine.
DMC Healthcare won a contract for community dermatology in North Kent in 2019, which began in April 2020. However, in June 2020 the local CCGs saw data that made them so concerned about the way the service was being run that they immediately removed DMC Healthcare from the contract.
The service provided in Dartford, Gravesham, Medway, Swale and Swanley, covered treatment for skin cancer patients as well as care for a range of conditions including rashes, lesions and lumps. The data seen by the CCG indicated that at least 1,855 patients were “at risk” due to waiting times. The CCG had to put an alternative NHS provider in place in the form of the 18 Week Support team, made up of senior NHS consultants, who specialise in clearing existing backlogs.
In July 2019, the private maternity service One to One Midwives gave pregnant women just a couple of days notice that it was withdrawing the services it provides to the NHS. The company entered insolvency proceedings soon after. This left about 1,700 pregnant women, some due to give birth within weeks, having to find new midwives. The company, which provided midwifery services to women in Essex and the north-west of England, said the contracts did not pay enough to make the service financially sustainable.
This was the second midwifery company to collapse – Neighbourhood Midwives, which provided midwifery services to women in the south-east, closed in January 2019.
In May 2019, Concordia Specialist Care Services terminated a contract to provide community dermatology services in Essex two months early with just five days notice. The original contract was for five years, but the CCG announced in October it was being cut to two years and ending in July 2019. The cut in contract time followed a CCG inspection of the services the company provided in Fryatt Hospital, Dovercourt. The inspection found “standards of hygiene and cleanliness in a number of areas did not comply with national standards, medication was out of date, specimens were inappropriately stored in a medication fridge and Concordia staff were unaware of how to access organisational policies”.
Virgin Care (now HCRG Care) won a seven-year £280 million contract in March 2015 to provide services for the frail and elderly in East Staffordshire. Under this fixed-price contract, Virgin Care was to be the prime provider and could sub-contract the work to other organisations. The contract was dogged by contractual and financial issues.
In October 2017, Health Services Journal (HSJ) reported that Virgin Care was demanding £5 million more from the CCGs. As this was not provided by the CCGs, Virgin Care terminated parts of the contract. Then in April 2019, Virgin announced that it is to leave the contract entirely in April 2020, three years early. The reason given is that Virgin and the CCG were unable to come to a new financial agreement. Virgin stated that it is not able to run the service on the money provided by the CCG and it is not prepared to make up the shortfall.
The quality of service provided by Serco was investigated in Suffolk, where it was awarded a £140 million contract in October 2012 to run community services. The company was criticized for failing to meet key response times. In January 2014, a report from Serco to the council’s health scrutiny committee showed that Serco was not hitting three of its key performance indicators in community health response times. For example, it failed to meet urgent four-hour response targets – for nurses and therapists to reach patients at home 95% of the time (only achieving 89.3% in November 2013). Before Serco took over, the target was achieved 97% of the time. In September 2015, Serco relinquished the contract and an NHS consortium including Ipswich and West Suffolk Hospital Trusts took over the running of community services.
Support Services
Capita took over the coordination of primary care care support services in September 2015. The contract from NHS England was designed to save £40 million per year by bringing together a previously fragmented service to a single national provider for Primary Care Support England (PCSE). Capita’s bid hinged on making a £21 million per year saving. The contract, which could run from seven to ten years, is worth up to £400 million.
However, since April 2016 when Capita closed the local centres to leave just three national hubs and implemented a single online ‘portal’ for practices, there has been a growing number of reports of problems affecting GPs, community pharmacists and optometrists. These include major problems with the secure transfer of patient notes around the country, with notes going missing or delivered to the wrong surgery.
GPC (General Practice Council) chair Dr Chaand Nagpaul wrote to NHS England demanding practices be compensated for extra workload due to the ‘systematic failure’ of PCSE, and indemnified against any claims as a result of support service issues.
In November 2018, it came to light that Capita had failed to send out nearly 50,000 letters as part of the cervical cancer screening programme and although the company discovered this issue in August 2018, it neglected to inform NHS England of the issue for two months.
In March 2019, Simon Stevens told the Public Accounts Committee that Capita would be stripped of its contract to run the cervical cancer screening programme. In July 2019, Capita admitted to further administration errors within this screening programme. In response to this, BMA is pressing again for Capita to be stripped of its contract to provide GP support services. NHS England has said that the process of taking away the cervical screening contract is now underway.
There was further issues in May 2019, when Capita incorrectly archived 130,000 patient records, instead of sending them to the patients new GPs when they registered.
In 2013 Interserve signed a contract with Leicestershire Partnership NHS Trust, University Hospitals of Leicester NHS Trust and the Leicester City, Leicestershire County and Rutland Primary Care Trust Cluster to improve estates and facilities management services across the cities and counties. The contract was seven years long, worth around £300 million and was expected to save the NHS a significant amount of money. Interserve were to be in charge of catering, cleaning, maintenance and security across more than 550 NHS buildings and properties.
However, in April 2016 this contract was scrapped four years early due to major problems and poor standards. These included patients in one hospital receiving meals up to three hours late and the merging of cleaning and catering services meaning around 100 people lost their jobs. It later came to light that the ex-Interserve staff were getting paid half what the NHS contracted staff were being paid.
The Health Service Journal reported in February 2017 that Carillion, which won a £200m, five-year estates and facility contract in 2014 with Nottingham University Hospitals Trust, would be stripped of the contract by April 2017 and the contract (including the staff) transferred back to the NHS. The company was warned in 2016 about its poor standards after reports that nurses at the trust were having to clean wards as the cleaners were failing to maintain standards. By early 2017, however, Carillion had failed to make sufficient improvements, hence the loss of the contract.
Commissioning and planning
In November 2015, an investigation by the BMJ and The Times into England’s CCGs showed that many of them are commissioning services from organisations in which their own board members have an interest. The study found that CCGs in England have awarded hundreds of contracts worth at least £2.4 billion to organisations in which their board members have a financial interest. The findings follow a previous investigation by The BMJ in April 2013 which found that more than a third of GPs on the boards of CCGs had a conflict of interest resulting from directorships or shares held in private companies.
Cambridgeshire and Peterborough CCG awarded a contract worth £700 to £800 million over five years – for the provision of older peoples’ services. Private companies were initially interested in the contract, including Circle, Virgin Care and Capita, however they withdrew, reportedly due to the steep financial efficiencies. Eventually in November 2014 Uniting Care Partnership, a consortium of NHS organisations was awarded the contract. The contract began in April 2015, but just eight months later Uniting Care announced that it was handing back the contract as it was not financially viable. The Public Accounts Committee published a damning report describing the handling of the contract as a “catalogue of failures.”
In April 2017, CCGs in Staffordshire finally abandoned the procurement of a ten year contract for cancer and end-of-life services worth £687 million. The whole process began in 2013 and has cost the four CCGs over £840,000. The tender process was paused in 2015 following the collapse of the UnitingCare Partnership contract in Cambridge and Peterborough. However, after restarting several months later in November 2016, a single final bidder emerged. This was a consortium of Interserve and two hospital trusts. Speaking on behalf of the CCGs, Andy Donald, chief officer at Stafford and Cannock Chase CCGs, said: “The remaining bidder couldn’t convince us they could deliver with the resources available.”
In September 2014 Coastal West Sussex CCG awarded the contract to BUPA and social enterprise CSH Surrey. However, pressure from the public and Western Sussex Hospitals Trust, forced the CCG to employ an auditor to assess the effect the contract would have on other NHS services in the area. The auditors concluded that the cumulative impact of loss of MSK services would result in the trust falling into deficit over the next five years. Western Sussex Hospitals had also warned that the loss of the contract could destabilise its trauma services. BUPA and CH Surrey withdrew from the process in January 2015 prior to signing the final contract.
Staffing
In September 2017 The Department of Health abandoned its plan to sell its majority stake in NHS Professionals – the health service’s in-house temporary staffing agency. NHS Professionals, which was set up by the last Labour government and supplies doctors, nurses and other staff at much cheaper rates than those charged by profit-making NHS staffing firms, saving the NHS £70m a year that would otherwise go to private firms. The plan was dropped after a period of intense of public criticism, but in the process of planning the sale the Department of Health spent £2m on advice from lawyers and consultants.
Management of NHS hospitals
In 2012 Circle won a ten-year contract to run the NHS Hinchingbrooke hospital, but pulled out after only two years following a lack of financial success and damning reports from Care Quality Commission (CQC). The CQC raised serious concerns about care quality, management and the culture at the hospital. It found a catalogue of serious failings that put patients in danger and delayed pain relief. The hospital was put in to special measures; the first time the CQC had taken this step. Circle cited financial considerations when announcing its withdrawal, but conceded that the CQC report had also been a factor in its announcement.
In December 2013 Serco announced that it would be pulling out of its contract to run Braintree hospital. In March 2014 the contract was handed back to Mid Essex Hospital Trust, nearly a year early. The company’s other major contract with the NHS for community care in Suffolk, did not produce the profits the company was hoping for. By August 2014, the company announced that it was withdrawing from the NHS clinical services market altogether.
In June 2014, the process to find an organisation to acquire or merge with the debt-ridden George Eliot Hospital NHS Trust was abandoned; the process began in September 2013. An article in the HSJ notes that £1.8 million had been spent on the entire procurement process by NHS organisations prior to its abandonment. A similar procurement process, this time to find an organisation to take over the running of the Weston General Hospital was terminated in October 2014, after very little interest; only one NHS Trust remained interested in the contract – the Taunton and Somerset Foundation Trust
