In December 2015 a five year contract, worth around £800 million between UnitingCare Partnership and Cambridgeshire and Peterborough clinical commissioning group collapsed after only 8 months because it ran into financial difficulties. The National Audit Office (NAO) recently examined the design, procurement and operation of the contract and the events that led to its termination.
This investigation examined the design, procurement and operation of the UnitingCare Partnership contract, and the events which led to the contract's termination. The NAO report also highlights accountability, governance and risk management factors behind the contract's collapse and establish the cost to the taxpayer of the contract's failure. The findings suggest that a number of factors contributed to the collapse.
These factors include:
- a lack of clarity in the expected costs of delivering the new services which led to a significant contract gap of about £30 million in the first year alone;
- optimism bias in the design of the scheme regarding the prospects and timing of cost savings; and
- a lack of commercial expertise, leading to poor risk management and an unwillingness to pause the introduction of the contract until all issues were resolved.
The relevant oversight bodies, whilst complying with their statutory roles, took a narrow view of the proposed arrangements and did not protect the system from failing in this case. The contract collapse has wider implications for new models of integrated service delivery elsewhere in the UK, and NHS England has currently paused several other procurements with similar features.