Next meeting of DCC Health Scrutiny meeting: SOHS suggests action

SOHS suggests the following action following receipt of a letter from Martin Shaw Independent East Devon Alliance Cllr for Seaton and Colyton.

SOHS:

Please email the councillors on the Devon Adult Care Scrutiny Committee insisting that they discuss this and vote to stop implementation due on 1 April.

sara.randalljohnson@devon.gov.uk
nick.way@devon.gov.uk
hilary.ackland@devon.gov.uk
john.berry@devon.gov.uk
paul.crabb@devon.gov.uk
rufus.gilbert@devon.gov.uk
brian.greenslade@devon.gov.uk
ron.peart@devon.gov.uk
sylvia.russell@devon.gov.uk
philip.sanders@devon.gov.uk
richard.scott@devon.gov.uk
jeff.trail@devon.gov.uk
phil.twiss@devon.gov.uk
carol.whitton@devon.gov.uk
claire.wright@devon.gov.uk
jeremy.yabsley@devon.gov.uk
pdiviani@eastdevon.gov.uk

“Devon’s two Clinical Commissioning Groups (CCGs) are pushing ahead with far-reaching, highly controversial changes to the NHS in the County from 1st April – without alerting the public or even the public watchdog, the Health and Adult Care Scrutiny Committee at Devon County Council.

“The changes will turn the Sustainability and Transformation Plan – which itself grew out of the misnamed ‘Success Regime’ which closed our community hospital beds – into a more permanent Devon Accountable Care System. The first phase, in the first part of the financial year 2017-18, will develop integrated delivery systems, with a single ‘strategic commissioner’ for the whole county.

However the real concern is the next phase, which will lead to the establishment of Accountable Care Organisations. These will lead to services being permanently financially constrained, limiting NHS patients’ options for non-acute conditions, and pushing better-off patients even more towards private practice.

“Large chunks of our NHS will be contracted out for long periods, probably to private providers. The ‘toolkit’ for this fundamental change talks about ensuring ‘that there are alternative providers available in the event of provider failure’. In the aftermath of Carillion, do we really want most of our NHS contracted out to private firms?

“Devon’s public are not being consulted about this change – unlike in Cornwall where the Council has launched a public consultation – and there is no reason to believe that they want a privatised, two-tier health system.
“Devon’s CCGs have pushed the change through without publicity, and it is only because I have put it on the agenda that Health Scrutiny will have a chance to discuss in advance of April 1st. I have written a 7-page paper for the Committee outlining what we know about the ACS and posing eight questions which they should ask about it.”

Top construction companies not accepting fixed-price PFI deals

The new NHS Accountable Care Organisations are relying on fixed-price PFI contracts for their savings.

“Bosses of top construction and outsourcing companies have warned ministers they will no longer accept fixed-price PFI deals after the collapse of Carillion.

The threat is a blow to the government’s £600bn infrastructure programme, which is already struggling to attract bidders. Last week the National Audit Office said there was little evidence that private finance initiative deals offered value for money for taxpayers.

Carillion plunged into insolvency last week with just £29m cash in the bank. Its threadbare finances were undone by failings on a string of PFI contracts, which left it unable to access hundreds of millions of pounds.

Balfour Beatty, Britain’s biggest construction company, has been moving away from fixed-price PFI contracts, which leave the winning bidders vulnerable to big losses if the projects encounter unexpected problems. The £2bn company is emerging from a disastrous spell of contract problems, which led to seven profit warnings.

Galliford Try — Carillion and Balfour Beatty’s partner on the Aberdeen bypass PFI contract — is also refusing to consider new fixed-price deals.

Rupert Soames, chief executive of the outsourcing giant Serco, said contractors would refuse to bid if too much risk were piled on them.

“Government would say, ‘You signed the bloody contract.’ But it’s not in anyone’s interest if you consistently get suppliers making huge losses. That’s no way to encourage a vibrant market. Both sides need to learn lessons from this,” said Soames, whose company’s government contracts include running prisons.

Balfour Beatty said in a report: “We need to move away from the position where fixed-price contracts, risk transfer, lowest-cost tendering and adversarial relationships are the norm.”

Carillion’s crisis was exposed in July when it admitted that contracts to build the bypass, Birmingham’s Midland Metropolitan Hospital and the Royal Liverpool Hospital were to blame for a large chunk of an £845m writedown. All three deals were public-private contracts, which left Carillion to foot the bill for cost overruns. There were unexpected problems in Aberdeen and Liverpool.

Despite this, the government wants contractors to bear all the risk on two huge PFI projects: a £1.6bn tunnel to bypass Stonehenge in Wiltshire and the £1bn Silvertown tunnel in east London.

Stephen Rawlinson of the analyst Applied Value, said: “The government has become more and more of a bully and transferred risk that the private sector cannot cope with.”

● Richard Adam, Carillion’s former finance chief, has quit the board of the warship designer BMT. Adam, 60, oversaw a huge expansion in debt at Carillion before his departure at the end of 2016. He joined BMT only eight months ago. He has recently left the boards of the developer Countryside, estate agent Countrywide and transport company First Group.”

Source: Sunday Times (pay wall)

Hunt asked to pause Accountable Care Organisations – but will he?

“Thank you for signing the petition STOP the new plans to dismantle our NHS, please share this!

https://you.38degrees.org.uk/petitions/stop-the-plans-to-dismantle-our-nhs

Great news! Sarah Wollaston MP, Chair of the Health Committee has written to Jeremy Hunt asking him to “delay the introduction of the new contract for Accountable Care Organisations until after the Health Committee has taken the opportunity to hear evidence on the issues around the introduction of accountable care models to the NHS”

People are beginning to wake up to the possibility that the NHS is about to be privatised and are not happy about it. Has something worried Sarah Wollaston enough to take this step?

The Judge giving permission for the 999 Call for the NHS into the lawfulness of the Accountable Care Organisation contract to be heard and setting capped costs because of the importance and huge public interest, gave us all a sense of hope. Their case is due to be heard in Leeds in April and they are still crowdfunding for that.

The doctors and academic’s Judicial Review with regard to lack of public consultation and Parliamentary scrutiny which was joined by physicist Stephen Hawking created more publicity.

Now this news published today (Friday). We believe Accountable Care Organisations have huge implications for patients.

Let’s share the petition and make it huge. Together we can win this.”

https://you.38degrees.org.uk/petitions/stop-the-plans-to-dismantle-our-nhs

EDA Councillor Martin Shaw on the next threat to our local NHS

PRESS RELEASE:

“Devon’s two Clinical Commissioning Groups (CCGs) are pushing ahead with far-reaching, highly controversial changes to the NHS in the County from 1st April – without alerting the public or even the public watchdog, the Health and Adult Care Scrutiny Committee at Devon County Council.

The changes will turn the Sustainability and Transformation Plan – which itself grew out of the misnamed ‘Success Regime’ which closed our community hospital beds – into a more permanent Devon Accountable Care System. The first phase, in the first part of the financial year 2017-18, will develop integrated delivery systems, with a single ‘strategic commissioner’ for the whole county.

However the real concern is the next phase, which will lead to the establishment of Accountable Care Organisations. These will lead to services being permanently financially constrained, limiting NHS patients’ options for non-acute conditions, and pushing better-off patients even more towards private practice.

Large chunks of our NHS will be contracted out for long periods, probably to private providers. The ‘toolkit’ for this fundamental change talks about ensuring ‘that there are alternative providers available in the event of provider failure’. In the aftermath of Carillion, do we really want most of our NHS contracted out to private firms?

Devon’s public are not being consulted about this change – unlike in Cornwall where the Council has launched a public consultation – and there is no reason to believe that they want a privatised, two-tier health system.

Devon’s CCGs have pushed the change through without publicity, and it is only because I have put it on the agenda that Health Scrutiny will have a chance to discuss in advance of April 1st. I have written a 7-page paper for the Committee outlining what we know about the ACS and posing eight questions which they should ask about it.

Martin Shaw
Independent East Devon Alliance County Councillor for Seaton & Colyton”

Accountable Care Organisations: what the former Medical Director of the NHS thinks you should know

Dr Graham Winyard is a former medical director of the NHS and deputy chief medical officer. This is his view on “Accountable Care Organisations” one of which is planned for Devon:

“Brexit’s dominance of media coverage and parliamentary time is providing the perfect cover for controversial reform of the NHS by stealth.

Jeremy Hunt and NHS England’s latest big idea is Accountable Care Organisations (ACOs). These bodies would be allowed to make most decisions about how to allocate resources and design care for people in certain areas.

At the moment, that’s done by public bodies whose governance is regulated by statute, set up by parliament after wide consultation and sometimes fierce debate. ACOs, by contrast, can be private and for-profit bodies. They are not mentioned in any current legislation and would have no statutory functions. They are not subject to the statutory duties imposed on other parts of the NHS.

Although NHS England plan to get several ACOs up and running this year, no detailed policy proposals have been presented to parliament or the public. Indeed, details are so sparse that the House of Commons library briefing is forced to use definitions provided by the King’s Fund, a health think tank.

Hunt is planning to lay a raft of secondary legislation – which doesn’t require a full parliamentary vote – in February, so that the first ones can be up and running by April 1st.

The ACOs are going to be given long-term commercial contracts of between ten and 15 years. We know these are difficult to get right and expensive to get out of. Think of Virgin and the East Coast Main Line or the private finance initiative, which has left the NHS paying hundreds of millions to offshore finance companies for hospitals that cannot now be afforded. Warnings about risks of PFI were once brushed aside as alarmist, often by the same people who now dismiss criticism of ACOs in similar terms.

I’m working with four colleagues to challenge these proposals through judicial review. Our case is not concerned with whether ACOs are a good or bad idea. That’s for parliament and the public to decide, not the courts. Our case is that such a radical and significant change cannot lawfully be introduced and implemented without public consultation, parliamentary scrutiny and primary legislation. The case was filed on December 11th and clearly struck a chord with the public. They’ve provided £176,000 through crowd funding in over 6,000 donations.

We are also deeply concerned that by using contracts instead of statute to allow ACOs to operate, the government is exposing the NHS to major risks.

We’re concerned that ACOs will be governed only by company and contract law, yet can be given “full responsibility” for NHS and adult social services. Because they span free health care and means-tested social care, ACOs will be able to decide on the boundary of what care is free and what has to be paid for. They can include private companies – including private insurance and property companies – which will make money from charging. Their accountability is unclear, in spite of their name, yet they will be given long-term contracts and be allowed to make “most decisions” about how to allocate NHS resources and design care for the local population. They will have control over the allocation of huge amounts of taxpayers’ money, yet their accountability for spending it and their obligations to the public would be under commercial contracts instead of statutes. The parallel with railway franchises seems inescapable. And by establishing them this way, it’ll be harder to exclude ACOs from free trade deals.

Lots of serious people are genuinely worried and object to their fears being brushed aside. If ACOs are not opening the door to greater privatisation of the NHS, why is their detailed documentation so explicit that they can indeed be private bodies?

We are not zealots opposed to change. We’re simply people who care about the founding principles of the NHS, have taken the trouble to read the small print and have the experience and knowledge to understand its implications.

If ACOs are now seen as being central to the delivery of effective health and social care, they should be set up as proper public bodies with clear democratic accountability. This would require a detailed explanation, proper public debate and the kind of parliamentary scrutiny that primary legislation demands.

https://t.co/wKr3bYTMEQ

Osborne and Carillion then and now

“George Osborne’s Evening Standard editorial on Carillion today: “Why has the state found itself so dependent on a few very large outsourcing firms? The failure to use a variety of smaller, mid-size companies undermines innovation and leaves services hostage when things go wrong.”

George Osborne, signing off on another Carillion contract as Chancellor in 2014: “It is great to see successful companies like Carillion winning contracts around the world. This deal, the first in a pipeline of many, will help us reverse the age-old trend of not exporting enough, boosting growth and creating jobs.”

He even wore their hat…”

https://order-order.com/2018/01/15/osborne-on-carillion-then-and-now/

Lessons to learn BEFORE Accountable Care Organisations are operating

Professor John Colley of Warwick Business School says Carillion was sunk by two serious mistakes:

“Too many contracts were taken at poor margins and terms, which prevented any subsequent profitability under competitive pressure. Some were allocated during the recession when it was win work at all costs.

“The other key issue is project accounting, which tends to recognise losses late in the project, effectively when the project starts to run out of money. There will no doubt be serious retrospective scrutiny of the accounting.”

and

Guardian columnist Simon Jenkins:

What the Carillion saga demonstrates is the rampant indiscipline in the contracts themselves. The company’s demise is attributable to favouritism, cost escalation, excessive risk, obscene remuneration and reckless indebtedness. Carillion and its bankers clearly thought it too big to fail. Whitehall behaved accordingly. It was like a pre-2008 bank.

There must now be a review of how privatisation is working. Its so-called parastatal companies are not true private entities. They depend on the state, and the state depends on them. Their lobbyists develop an unholy relationship with ministers and officials – witness the uncontrolled revolving door between Whitehall and the boardrooms.

and

Peter Kitson, Partner at law firm Russell-Cooke, says Carillion may have caused its own demise by pitching its services at an uncompetitively low rate – to win business.

”The procurement rules (the Public Contracts Regulations) which govern public sector procurement are central to understanding what has happened here. Almost all Carillion contracts have been competitively tendered under those procurement rules.

The rules require public sector clients to investigate and possibly to exclude any tenderer whose bid is ‘abnormally low’. One contributory factor here may be that Carillion has tendered at very low margins, possibly unsustainably low, in order to win these huge volumes of work.

If such bids have succeeded, that can only mean either than the Regulations themselves are ineffective or that public sector clients lack the confidence or the expertise properly to enforce those rules.

Following this morning’s announcement, I am sure that many of those public sector clients will be seeking advice on the extent to which those same procurement rules allow short term emergency replacement contracts to be let without formal procurement.”

https://www.theguardian.com/business/live/2018/jan/15/carillion-crisis-liquidation-last-ditch-talks-fail-business-live