Cambridgeshire's £800m NHS outsourcing contract 'wasted millions'

UnitingCare was a consortium of Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust

Millions of pounds of taxpayers' money was wasted on an NHS outsourcing contract, investigators have found.

Under the £726m deal, UnitingCare was meant to provide care for older and mentally ill people in Cambridgeshire.

But the consortium claimed the contract was not financially viable and pulled out of the deal in December.

A joint statement from the two organisations in the consortium said the National Audit Office's (NAO) findings provided "clarity".

Cambridgeshire and Peterborough Clinical Commissioning Group had been been in charge of care for older and mentally ill people but put these services out to contract because it was trying to save money.

The UnitingCare Partnership's business case estimated net savings of £178m to the local health economy by 2020.

'Astonishing array of errors'

But the NAO's investigation into the contract - which ended just eight months after it started - has criticised the planning and the lack of data setting out the true cost of the service.

The report found the consortium had not taken account of VAT costs and underestimated both the changeover and running costs of delivering the service in drawing up its bid for the contract.

The report also found negotiations between the CCG and the UnitingCare were continuing when the contract started.

As a result, one month into the contract UnitingCare asked for £34m in extra funding which triggered fresh negotiations.

The report said: "The wasted cost to the NHS of the contract set-up and bidder costs was £8.9m."

The report also found negotiations between the CCG and the UnitingCare were ongoing when the contract started

Amyas Morse, head of the National Audit Office, said: "This contract was innovative and ambitious but ultimately an unsuccessful venture, which failed for financial reasons which could, and should, have been foreseen.

"Limited oversight and a lack of commercial expertise led to problems that quickly became insurmountable."

Meg Hillier, chairman of the Public Accounts Committee, said the report "details an astonishing array of errors" in implementing service changes.

"Despite drafting in specialist expertise from the private sector and the NHS, the assumptions underlying the contract's cost structure were not tested.

"Instead, the contract - which was not remotely ready - was rushed through without due regard for protecting taxpayers' money."

A joint statement from the two organisations behind UnitingCare, the Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust, said: "We believe that the report is balanced and provides clarity on the reasons why the contract ended."

The CCG said: "It is clear that there was a wide disparity between the CCG's contract expectations and UnitingCare's expectations of income.

"The CCG recognises that there were too many outstanding issues at contract signature and that there were also gaps in the procurement advice the CCG has received."

It added there was "much too learn".