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Who is accountable for Hinchingbrooke disaster?

Circle became the first private company to run an NHS hospital when it took operational control of Hinchingbrooke Health Care NHS Trust in February 2012. However, in January 2015, Circle announced that it intended to withdraw from the contract, just three years into the 10-year franchise.

Whilst this was an innovative – but ultimately unsuccessful – experiment, we are concerned that none of those involved in the decisions has been properly held to account.

Despite our warnings about the risks, oversight of the contract by the various parties who had a role was poor and inadequate and no one has been held accountable for the consequences.

As we warned in 2013, the taxpayer has been left exposed by the failure of the Hinchingbrooke franchise. Circle was not able to make the Trust sustainable and the NHS Trust Development Authority did not take effective action to protect the taxpayer.

It was clear at the time the franchise was let that the Trust would only survive if it secured substantial savings, but the savings projected in Circle’s bid were overly optimistic and unachievable.

The Department later told us that it was confident of success and played down the high degree of risk involved in this novel contract.

However, the total deficit incurred during the franchise will be well above the level that Circle is contractually committed to cover, leaving the taxpayer to pick up the rest of the bill.

We want to know the total cost to the taxpayer due to the failure of the franchise, including the costs of transition arrangements and the total cost of covering the financial deficits incurred during the franchise.

The Care Quality Commission inspected the Trust in September 2014 and gave the Trust an overall rating of ‘inadequate’. The Trust and Circle have challenged the Commission’s assessment, although Circle has acknowledged that Hinchingbrooke did have areas to improve.

We were not given a satisfactory explanation as to why the inspection rating was inconsistent with previous assessments of care quality at Hinchingbrooke. The contradictory assessments risk confusing commissioners, the public and others about the actual quality of care being provided.

We are also concerned that lessons on awarding and managing major contracts will not be learnt from this venture. The Department told us that no trusts are currently considering an operating franchise model, but the NHS continues to award major, high value contracts.

Public bodies will not achieve value for money from their contracts until they become more commercially skilled – both in letting contracts in the first place, but also in ongoing contract management.

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