Despite the implementation of performance improvement plans, services delivered by Capita for opticians on behalf of NHS England have regressed, a damning report from the National Audit Office (NAO) has said.
While the report found that primary care support services for some of the 39,000 GPs, dentists and pharmacists had improved, opticians were still receiving a payment service that was ‘inconsistent and unreliable,’ with some business owners forced to take out loans when payments were not made.
The NAO was critical of NHS England’s decision to contract with Capita, both to run existing services, but also to transform them simultaneously, describing it as ‘high risk’.
In August 2015, NHS England entered into a seven-year, £330m contract with Capita to deliver primary care support services. NHS England aimed to reduce its costs by 35% from the first year of the contract and provide a ‘high-quality’ and standardised service. Capita expected to make a loss of £64m in the first two years of the contract, which it planned to recoup in later years, said the NAO.
Capita was incentivised through the contract to close existing services to minimise its losses but the interaction between running, closing and transforming services was more complex than Capita or NHS England had anticipated.
Meg Hillier, the chair of the public accounts committee, said the report showed parliament was right to be concerned over the health of the sector. ‘Trying to slash costs by more than a third at the same time as implementing a raft of modernisation measures was over-ambitious, disruptive for thousands of doctors, dentists, opticians and pharmacists and potentially put patients at risk of serious harm.’
Performance issues began to emerge in 2016 shortly after Capita started closing primary care support offices and making other changes to the portfolio of services. Capita acknowledged it made performance issues worse by continuing to close support offices in summer 2016, even though it was aware the customer service centre was struggling to meet demand at that time.
The report said Capita closed 35 out of 38 support offices across the country, cutting staff from 1,300 to 650, resulting in a loss of local knowledge. NHS England intervened in September 2016, serving default notices on Capita and increasing the numbers of staff. In July and August 2016, just months after Capita secured the NHS contract, over a quarter of payments (27%) to opticians required correction.
In addition, the report identified potential risks to patients through problems with the performers list of GPs, dentists and opticians practising in the NHS.
Although no harm to patients was found, NAO auditors found 87 women were notified incorrectly that they were no longer part of the cervical screening programme.
Aggressive closures
The NAO report said NHS England was contractually unable to stop Capita’s ‘aggressive’ office closure programme, even though it was having a harmful impact on service delivery.
‘Neither NHS England nor Capita fully understood the complexity and variation of the services being outsourced,’ said Amyas Morse (pictured), head of the NAO.
‘As a result, both parties misjudged the scale and nature of the risk in outsourcing these services. While NHS England has achieved financial savings and some services have now improved, value for money is about more than just cost reduction.
‘It is deeply unsatisfactory that, two-and-a-half years into the contract, NHS England and
Capita have not yet reached the level of partnership working required to make a contract like this work effectively.’
The savings made by NHS England were in line with expectations – £60m in the first two years of the contract. The bulk of the financial risk through increased costs lay with Capita, that had made a £125m loss during the same period.
To date, NHS England has deducted £5.3m from payments to Capita as penalties for poor performance but the NAO said it may have to pay up to £3m in compensation to primary care providers.
According to the NAO, NHS England has not yet secured all the benefits it wanted to achieve as Capita’s transformation programme was halted while it focused on operational issues. NHS England remained concerned about three of the services – the national performers lists, payments to opticians and GP payments and pensions, but said some of the issues with them pre-dated the contract with Capita.
Current service
The report said Capita had reported one severe failure, which was for not notifying opticians that they had submitted an invalid payment claim within 30 calendar days. However, the Local Optical Committee Support Unit (Locsu) issued advice to practitioners recently that stated further delays were expected during May.
Locsu and the Optical Confederation said they had raised ‘severe concerns’ with NHS England about Primary Care Support England’s (PCSE) and Capita’s failure to make payments on time again and were awaiting a full explanation of the cause of the issues. Locsu said recent meetings with the Optical Confederation, PSCE and senior managers at NHS England had seen assurances given that lessons had been learned from payment delays in March.
‘Clearly the steps taken have not been sufficient to ensure on-time payments this month, so the sector needs urgent assurance that further appropriate action is being taken by PCSE to guarantee future payments are made on time,’ said Locsu.
The future
The NAO’s recommendation was that NHS England should now determine whether all current services within the contract were best delivered through that contract or be should taken in-house by NHS England.
Optician asked the Optical Confederation if the time was now right for this happen. ‘We are pressing NHS England very hard on all of this, and have asked whether the GOS backlog reconciliation exercise at least could not be taken away from Capita while they focus on getting current services back on track,’ said a Confederation spokesperson.
‘Our aim throughout has been to get the best service for optical businesses, practices and practitioners with minimal disruption and cost for practices. We warned NHS England about all the errors identified by the NAO and it is to be hoped they have learned their lessons. £60 million savings for NHS England have been made on the backs of primary care.
‘However, we also have to strike the balance and make judgements at any given time between further disruption, the quality of Capita recovery plans and especially the calibre of new management there, and the availability of others who could take on the work with the further transition issues this could entail. There are also three contractor professions involved in this contract, not just us, so we have to work together.’
Among the other affected professions, the tone of the messages to NHS England and Capita was more convincing. ‘NHS England needs to take ownership over the grotesque mismanagement at Capita,’ said Henrik Overgaard-Nielsen, the British Dental Association’s chair of general dental practice.
‘Hundreds of NHS dentists have been unable to provide care for patients – or support their families – because officials were fixated on quick savings. There can be no excuses, and no buck-passing. A professional in-house team was laid off, and NHS England set the terms and the targets for Capita’s tenure. Today NHS primary care providers across England are still smarting because of their reckless and wholly unnecessary choices.’
NA0 report in numbers
- £330m is the estimated value of NHS England’s seven-year contract with Capita for nine primary care support services (approximately £47m a year)
- 35% intended reduction in NHS England’s costs across all primary care support services from day one of the contract agreed by Capita
- 39,000 primary care practitioners are supported by Capita’s primary care support services
- Five of Capita’s primary care support services, out of nine, were placed in a formal process under the contract to rectify services by NHS England in September 2016
- £5.3m in contract penalties that were applied by NHS England between January 2016 and April 2017
- £60m in savings NHS England has made to primary care support services in the first two years of the contract
- 41 out of 45 performance indicators that Capita considers it met in February 2018 when factors that Capita considers outside its control were taken into consideration
- Seven severe service failures against performance indicators in February 2018