NHS users should require mutuals to deliver more benefits than in-house, says NAO

By David Bicknell

The National Audit Office (NAO) has highlighted risks to value for money associated with the Department of Health’s programme aimed at enabling its staff to take the lead in leaving the NHS – or ‘spinning out’ – to set up health social enterprises or mutuals.

The NAO’s  Report recognises that, at this early stage of the ‘Right to Request Programme’, it is too early to assess its costs and benefits. But it makes the point that the Department of Health has not set measurable objectives specifically for the Right to Request Programme against which to evaluate its success. PCTs expect social enterprises or mutuals to deliver more benefits than other providers, but did not generally contract for them to deliver savings or any other additional benefits.

The NAO’s report points out that many risks and liabilities still reside with the PCTs and will need to be managed if value for money is to be achieved. In the last resort, the trust or its successors will be responsible for ensuring that essential services continue to operate. For a time, social enterprises will be highly dependent on work and cash flow from their respective PCTs. They will also be operating in an ‘increasingly competitive market’ owing to changes in health legislation currently going through Parliament. So PCTs or their successors will need to have a clear idea of how they will react if enterprises run into financial difficult or fail.

Amyas Morse, head of the National Audit Office, said, “There are many risks to be managed if the Department is to get value for money from the £900 million contracts awarded to social enterprises. The Department needs to reassess its approach, when contracting with social enterprises, of not requiring efficiencies over and above what would have been achieved if the services had remained within the Department.”

You can access the full report here

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