UnitingCare Partnership contract collapse

An £800m, 5-year contract collapsed after 8 months when the NHS-owned ‘leader provider’ consortium revealed it would be handing it back to commissioners. On 3 December 2015, UnitingCare Partnership and Cambridgeshire and Peterborough Clinical Commissioning Group jointly announced that the contractual arrangements were ‘no longer financially sustainable’. The termination of the contract – for older people’s care in Cambridgeshire and Peterborough – had unfunded costs of £16m, which were split between the trust partners and the CCG.

Scrutiny from the NAO and PAC

In the aftermath of the collapse, NHS procurement processes came under scrutiny.

On 14 July 2016, the National Audit Office (NAO) published a report investigating the contract and events resulting in its collapse. It highlighted a lack of commercial expertise in contract design and price negotiation, as well as challenges to oversight and regulation. The remit of foundation trust regulator Monitor did not cover every part of the transaction and neither Monitor, nor the Department of Health, nor NHS England held a ‘holistic view’ of the contract.

Following the NAO’s report, the Public Accounts Committee (PAC) took evidence on the contract termination and published a report of this on 16 November 2016. It found that the NHS lacked the required commercial skills, there had not been enough clarity on costs and oversight was weak. It recommended that the NHS develop its commercial skills and NHS England and NHS Improvement improve the oversight and supervision of contracting arrangements.

The PAC emphasised the significance of the contract termination: ‘The contract collapse has wider implications for new models of integrated service delivery elsewhere in the UK, and NHS England has currently paused several other procurements with similar features.’

Government response

The government responded to the PAC report in February 2017. While it agreed with many of the report recommendations, it disagreed that with the conclusion that in awarding a commissioning contract involving a provider sub-contracting services under the contract, a CCG was abdicating its commissioning responsibilities.