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Doubts emerge over value for money of private firm scheme

By Tony Lithgow

The Government's controversial drive to use the private sector to help spend NHS cash is faltering, with the first project struggling to make the expected savings.

A PCT evaluation has warned its deal with BUPA to provide commissioning support is not delivering the desired savings and the project may not deliver value for money.

BUPA's contract with Hillingdon PCT is seen as a key test of the flagship programme – known as the framework for procuring external support for commissioners (FESC).

Ministers believe use of the private sector can improve the efficiency of commissioning, but critics say it is the most extreme example yet of NHS privatisation.

Hillingdon PCT's audit committee last month expressed serious doubts about the three-year project, which was given the final go-ahead in February.

Minutes of the meeting, obtained by Pulse, said: ‘Early indications are that it will not achieve projected savings. Current negotiations with acute providers may lead to some savings but this is not yet clear.'

The report said committee chair Nigel Foxwell was doubtful about the scheme, noting: ‘At this time he could not see how these projects would result in value for money on performance to date.'

The warnings will raise fresh questions over the future of FESC. Northamptonshire PCT last month became the second area to sign a FESC deal with US giant UnitedHealth.

A spokesperson for Hillingdon PCT said it was confident its target savings of £3m would be made: ‘Initial assessment by the audit committee was that initial progress under the contract had not been as expected. However, the PCT has addressed some of the issues raised by the committee and has confirmed that at present, BUPA has identified indicative savings of £1.4m. It was agreed to update the

audit committee on further progress in six months' time.'

A spokesperson for BUPA insisted it had an ‘extremely positive' relationship with Hillingdon PCT – but that it was up to the trust to negotiate savings.

‘In the initial six months of its three-year contract with Hillingdon PCT, BUPA commissioning has identified savings in line with original projections and will continue to meet and exceed the targets set by the PCT,' she said.

‘It is the responsibility of Hillingdon PCT – not BUPA – to negotiate and realise these savings with its providers.'

GPC negotiator Dr Chaand Nagpaul said: ‘It doesn't surprise me the espoused benefits are not being met – and that the reality is not matching the political aspirations – because FESC is not based on any policy evidence. It seems designed purely to save money – and it's not even doing that.'

How private firms are being given the reins How private firms are being given the reins

oct 07- Department of Health unveils list of 14 approved companies that can help PCTs commission services – including BUPA, UnitedHealth and Dr Foster

feb 08-BUPA signs first FESC deal with Hillingdon PCT

mar 08-Ministers signal major expansion of FESC, allowing all PCTs to seek commissioning advice

jul 08- UnitedHealth wins contract to advise Northamptonshire PCT on commissioning.

Doubts have emerged over value for money of FESC Doubts have emerged over value for money of FESC

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