It’s a been difficult week for supporters of an increase in social enterprise delivery of NHS services. First commissioners in Surrey awarded a £500 million contract to a private sector provider owned by Virgin rather than a flagship spin out, then a few days later Civil Society reported that plucky campaigners in Gloucestershire had succeeded in derailing their local PCT’s plan to hive off its delivery arm into a Community Interest Company (CIC).
In Gloucestershire, local resident Michael Lloyd, supported by the campaign group Stroud Against the Cuts, is bringing a legal action against NHS Gloucestershire apparently on the basis that they have failed to follow the correct process for transferring services out of the NHS. Following the commencement of legal proceedings, NHS Gloucester have temporarily halted the transfer of services to the new CIC, Gloucestershire Care Services, while they take legal advice.
Those with an ideological antipathy towards ‘privatisation’ who are tempted to see this result as a victory should probably take a closer look at the Civil Society report – particularly the bit of it where the spokesperson for Stroud Against the Cuts and Mr Lloyd’s solicitor (who are theoretically on the same side) put forward positions which are entirely contradictory in terms of the suggested outcome if the legal challenge is ultimately successful.
Caroline Molloy of Stroud Against the Cuts states that: “We have been advised that NHS Gloucestershire is acting unlawfully. It cannot just hand over all its NHS Primary Care Trust services to an unaccountable social enterprise or community interest company. It must either keep the NHS services itself, or have a proper process that would allow services to be provided by another NHS body. Both these options would keep our health services in the NHS, and accountable to the public.”
Mr Lloyd’s solicitor, Rosa Curling, while agreeing that the PCT has acted unlawfully, says nothing about allowing services to be provider by another NHS body. Instead she says: “If the PCT intends to enter into arrangements with a community interest company, it is first required in law to go through a process which allows other economic operators the opportunity of being awarded those contracts.”
The Transforming Community Services programme – which demanded that PCTs separate commissioning of services from provision – is practically the only bit of New Labour health policy that the coalition government’s incoming health secretary, Andrew Lansley, decided should carry on. Not least because, having ceased to be directly responsible for service delivery, PCTs would/will* find it easier to comply with his wish that they abolish themselves entirely by 2013.
It is not impossible that the result of Stroud Against Cuts’ campaign is that NHS Gloucestershire will choose to transfer its provision to a local Foundation Trust instead of a CIC – it’s not clear from the article whether there is a local Foundation Trust that’s interested in taking the services on. What’s at least equally likely is that if the PCT has to abandon the transfer to a CIC, it will initiate the open process that Ms Curling describes and that process – as was the case in Surrey – may be won be a large private sector provider.
If was a placing a bet, I think the most likely result in this particular case is that the legal challenge won’t succeed and that the PCT will ultimately go ahead with its plans for a CIC at the cost of a short delay and thousands of pounds of NHS budget spent on legal fees.
The danger for the social enterprise movement, or at least those bits of the movement that are particularly keen on NHS spin outs, is that this case may persuade other PCTs who had been considering spinning out their provider arms – or backing proposals from staff teams actively keen to set up spin outs – to choose instead to go for an open tendering process on the basis that this will not be subject to legal challenge.
Even many of us who are agnostic about the likely benefits of spin outs in a general sense would ultimately be far keener on a situation where PCTs give the social enterprise option a try rather than initiate open tendering processes in which private sector providers have a significant in built head start. Whatever ultimately happens to NHS Gloucestershire’s services, there’s a great danger that campaigners there may have inadvertently handed a significant boost to private companies hoping to break into NHS provision.
*MPs/Peers to delete as appropriate