National Audit Office slams Capita performance
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- Published: Thursday, 17 May 2018 07:34
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The National Audit Office (NAO) says in a new report that NHS England and Capita misunderstood the risks in outsourcing primary care support services resulting in services to 39,000 GPs, dentists, opticians and pharmacists that were a long way below an acceptable standard. Widespread failures are still being experienced by primary care practitioners.
Amyas Morse, the head of the NAO, said today: “Neither NHS England nor Capita fully understood the complexity and variation of the services being outsourced. As a result, both parties misjudged the scale and nature of the risk in outsourcing these services.”
Henrik Overgaard-Nielsen, the BDA's chair of General Dental Practice said: “NHS England needs to take ownership over the grotesque mismanagement at Capita. Hundreds of NHS dentists have been unable to provide care for patients - or support their families – because officials were fixated on quick savings. There can be no excuses, and no buck passing. A professional in-house team was laid off, and NHS England set the terms and the targets for Capita’s tenure. Today NHS primary care providers across England are still smarting because of their reckless and wholly unnecessary choices.”
In August 2015, NHS England entered into a seven-year, £330 million contract with Capita to deliver primary care support services. NHS England aimed to reduce its costs by 35% from the first year of the contract and provide a high-quality and standardised service. Capita expected to make a loss of £64 million in the first two years of the contract, which it planned to recoup in later years.
NHS England’s decision to contract with Capita both to run existing services but also simultaneously to transform those services, was high risk. Capita was incentivised through the contract to close existing services to minimise its losses but the interaction between running, closing and transforming services was more complex than Capita or NHS England had anticipated.
Performance issues emerged in 2016 shortly after Capita started closing primary care support offices and making other changes to the service. Capita acknowledges that it made performance issues worse by continuing to close support offices in summer 2016 even though it was aware the customer service centre was struggling to meet demand at that time. NHS England was contractually unable to stop Capita's aggressive office closure programme, even though it was having a harmful impact on service delivery.
Users continue to experience poor delivery with seven severe service failures in February 2018. A number of organisations have contributed to underperformance as Capita relies on other organisations to provide some services.
NHS England has made savings, in line with expectations, of £60 million in the first two years of the contract, as the financial risk of increased costs sits with Capita who have made a £125 million loss over this period. To date, NHS England has deducted £5.3 million from payments to Capita as penalties for poor performance but it expects it may have to pay up to £3 million in compensation to primary care providers.
NHS England remain concerned about three of the services - the national performers lists, payments to opticians and GP payments and pensions but recognises that some of the issues with them pre-date the contract with Capita.
Two and a half years into the contract basic principles are still not agreed, which limits NHS England’s ability to hold Capita to account. NHS England and Capita have still not agreed how to calculate 11 performance measures, and how these data should be used to calculate payments owed to Capita for delivering the services.
The NAO recommends that NHS England should determine whether all current services within the contract are best delivered through that contract or be should taken in-house by NHS England.
Link to NAO report: https://www.nao.org.uk/report/nhs-englands-management-of-the-primary-care-support-services-contract-with-capita/
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