Control of community care in Nottinghamshire falls to controversial US company

“NHS Protectors’ worst fears are being realised as USA’s Centene is likely to control Greater Nottingham Accountable Care System, by taking over the NHS Commissioner’s role in a £206m community services contract.

At the very time that its discredited subsidiary Ribera Salud – which is being kicked out of Spain by the Valencia Green/Podemos/Socialist government – has appointed former New Labour Health Secretary Alan Milburn as a Director and has sent lots of executives to UK to help Centene UK with its plan of buying primary care and mental health companies.

The UK subsidiary of Centene – a US sub-prime health insurance profiteer that has got rich off managing Obamacare’s publicly-funded Medicaid programmes which provide health insurance for people on a low income – is likely to take over the NHS commissioner’s role in the £206m, 7 year contract for out-of-hospital community services, that Nottingham City Clinical Commissioning Group recently awarded to Nottingham City Partnership Community Interest Company. …”

This seems to bear out NHS protectors’ worst fears that Accountable Care Systems or Organisations are Trojan horses designed to import US companies into key controlling positions in these new types of local NHS and social care services.

Centene UK, assisted by executives from its discredited Spanish subsidiary Ribera Salud, is also studying the acquisition of primary care and mental health companies in the United Kingdom, according to recent reports from Valencia Plaza.

Ribera Salud recently appointed the former New Labour Health Secretary Alan Milburn to its Board of Directors, to help it “continue with its expansion plans.” In addition, during the recent visit to Valencia of the United Kingdom’s ambassador to Spain, Simon Manley, a British manager of Ribera Salud contacted him to explain the company’s plans. …

Nottingham City Clinical Commissioning Group will become part of the Nottinghamshire/Greater Nottingham Accountable Care System. This will be:

“a single risk bearing entity to managing [sic] the entire care continuum. The successful provider must form part of the ACS and…will be expected to help shape and deliver its part of the single risk bearing entity.”

This sounds like the Accountable Care Organisation contract – which NHS England is not approving now and which is the subject of two Judicial Reviews in the Spring and a public consultation at some unspecified point in time.

The contract notification says that when the Accountable Care System is implemented, this will require a contract variation which:

“will require the successful provider to provide its consent to the potential future transfer of the CCG’s role under the contract.”

This contract variation will mean transferring the contract from Nottingham Clinical Commissioning Group to another provider, or the Care Integrator (Centene UK).

It seems that Nottingham City Clinical Commissioning Group has taken a gamble on the likelihood that NHS England will be approving the Accountable Care Organisation contract by the time the Sustainability and Transformation Partnership has figured out its business case to consider the options for partner organisations in managing the Accountable Care System components and has secured legal and procurement support to advise on this.”

Privatisation: consultants hire more consultants to bail them out (maybe)

(The final paragraph gives some perspective to the Capita boss’s upbeat message!)

The embattled outsourcing giant Capita is plotting a £700m fire sale of assets alongside a heavily discounted rights issue intended to raise a similar sum.

The new chief executive of the former FTSE 100 favourite is understood to be working on a more aggressive than expected review that could lead to the sale of six or seven businesses.

Jonathan Lewis, who overhauled the oil services company Amec Foster Wheeler, admitted in January that Capita needed a rescue cash call.

Delivering a profit warning that almost halved the market value to £1.1bn, Lewis said Capita had underinvested and relied on acquisitions to fuel growth.

The company has contracts ranging from army recruitment to customer services for Tesco Mobile [and BIG contracts with local authorities such as Barnet where they run just about everything]. It is wrestling with a debt pile that totalled £1.2bn at the end of last year and a reported £381m pension deficit.

Capita has hired the consultancy McKinsey & Co to work on its strategy and Bain & Co to help scythe through costs.

Lewis said in January that two businesses would be sold — Constructionline and ParkingEye — as part of non-core disposals. It is understood Capita has now identified six or seven businesses, worth up to £700m, that could be sold in stages. With the rights issue, this would allow Capita to raise up to £1.4bn of fresh capital. The company has had more than 120 approaches from potential bidders interested in its offshoots.

Capita has delayed publishing its 2017 results until it finalises the rights issue, which could be launched within weeks. Lewis is expected to reveal a cost-cutting plan that will strip hundreds of millions of pounds from its overheads.

The turnaround drive comes amid a toxic climate for outsourcing companies, illustrated by the collapse of Carillion in January.

Interserve is trying to refinance its £513m debt. The share price leapt last week on hopes that a deal with lenders may be agreed within days.

Lewis has insisted Capita is not in the same position as Carillion, pointing out it has £1bn of cash and bank facilities. Its shares closed last week at 168p. A year ago they were trading at 518.6p.

● Advisers to Carillion were handed £6.4m just before its collapse. Law firms including Clifford Chance and Slaughter and May and the investment bank Lazard were among the firms that were paid fees on January 12, an inquiry by MPs has found. Carillion went into liquidation 72 hours later.”

Source: Sunday Times (pay wall)

Government gave special treatment to failing private training provider

“The government gave England’s largest commercial further education provider ‘special treatment’ even though its performance was declining, a group of MPs concluded.

A Public Accounts Committee report out today has criticised the government’s continued commitment to its multi-million pound contract with Learndirect.

The report shows that the Education and Skills Funding Agency and its predecessor the Skills Funding Agency gave Learndirect almost £500m in the academic years from 2013-14 to 2016-17.

However, the PAC also notes that the quality of Learndirect’s apprenticeships have been in steady decline – Ofsted gave it a rating of ‘good’ in March 2013 but downgraded this to the lowest possible rating of ‘inadequate’ in March 2017.

Learndirect instigated a legal challenge challenging the ‘inadequate’ rating, which delayed the publication of Ofsted’s inspection report.

The Department for Education would normally cancel an ‘inadequate’ provider’s contract and withdraw funding immediately, but Learndirect warned that this would impact its 75,000 learners.

The government has since said it is ending Learndirect’s contract to provide apprenticeships and adult education.

Learndirect received £121m from central government in 2016-17 and is expected to get another £105m in the current financial year, the PAC pointed out.

PAC chair Meg Hillier said: “It cannot be right that individual contractors should command such large sums of public money regardless of their performance.

“No commercial provider should be allowed to become so essential to the delivery of services that it cannot be allowed to fail.”

She added: “Government has a duty to manage taxpayers’ exposure to risk diligently and we urge it to act on the recommendations set out in our report. … ”

Privatisation: Network Rail assets likely to be sold off to billionaire equity funds

“Private equity firms, including Guy Hands’ Terra Firma, have emerged as contenders to take over Network Rail’s commercial property business, fuelling further dismay over the forced sale of assets to fund the budget shortfall.

The US investment giant Blackstone is understood to be another bidder for the rail property arm, which includes about 5,500 premises across England and Wales and is estimated to be worth £1.2bn.

According to Sky News, about 20 parties are expected to table preliminary bids on Friday, including Telereal Trillium, owned by the billionaire Pears family, and also funds linked to the Wall Street bank Goldman Sachs.

Much of the property is in urban areas under railway arches, and often let to small businesses such as bars, garages and hairdressers. The portfolio generated a large proportion of Network Rail’s total rental income of £293m in 2017. Network Rail has said existing tenants will retain their leases under the new landlords.

The involvement of Guernsey-based Terra Firma was revealed a month after a scathing report from the National Audit Office found the government had lost up to £4.2bn in a previous sell-off to part of Hands’ private equity group. The Ministry of Defence sold 57,400 army homes for military families for £1.66bn in 1997 to Annington Homes, and then rented them, which the public accounts committee chair, Meg Hillier, described as “a rotten deal for taxpayers”.

Terra Firma has also attracted attention for its management of the crisis-hit Four Seasons Health Care, whose care homes look after 17,000 elderly people in the UK and which is seeking a rescuer.

The sale of Network Rail assets, including some depots but no stations, was agreed as a condition of George Osborne (who was then the chancellor) releasing more funds in 2015 to continue promised infrastructure work. Network Rail hoped to raise £1.8bn towards a £2.5bn shortfall. A host of rail upgrades in a five-year plan from 2014-19 were cancelled after the budget for electrifying the Great Western mainline alone overran by approximately £2bn. …”

Unions and campaigners condemned the sale. Mick Cash, general secretary of the RMT union, said: “This is the same old bunch of chancers, speculators and asset strippers queuing up to make another killing at the expense of our public services. These property assets make a decent income for Network Rail and once they are gone they are gone, smashing another gaping hole in the rail infrastructure budget.” …

… Cat Hobbs, of the campaign group We Own It, said: “Railway land belongs to all of us – we don’t want it parcelled up and sold to the highest bidder. This is an asset which generates millions every year, money which should be returned to the public purse not disappear into private profits.”

Privatisation: the Carillion Comedy Show!

This sounds like the sort of “comedy” Ricky Gervais might write! Except that these people were being paid hundreds of thousands if pounds while bringing the company to its knees.

“Carillion’s former chairman Philip Green had only a “tenuous grasp” on the crisis in the construction firm’s finances, and was working towards an “upbeat announcement” to the City just five days before unveiling a £845m writedown, board minutes of the collapsed group reveal.

The board also rejected advice from its brokers that the company would be unable to raise emergency funds, describing their pessimistic view as “not credible” and then hiring alternative advisers.

The details are contained within the company’s board minutes, which were released on Wednesday by a joint select committee investigating the construction group’s collapse in January.

The business, energy and industrial strategy (BEIS) committee, along with the work and pensions committee, have been publishing extracts of the official Carillion corporate record each day this week.

Frank Field, the chair of the work and pensions committee, said: “Carillion’s chair appeared to lack even a tenuous grasp on the reality of the company’s situation. Five days before the profit warning that heralded the firm’s public spiral into insolvency, Philip Green stands like the mayor of Pompeii – smoke billowing from the volcano behind him, lava cascading down the slopes – trumpeting the forthcoming revelries of the village fete. It is difficult to believe the chairman of the company was unaware of its position, but equally difficult to comprehend his assessment if he was.”

Rachel Reeves MP, the chair of the BEIS committee, added: “Philip Green’s assessment of Carillion as ‘a compelling and attractive proposition’ shows either a woeful lack of leadership or no grip on reality.”

The minutes of the board meeting of 5 July 2017 record Green, who had been chairman since 2014, stating that the company should continue to work “toward a positive and upbeat announcement for Monday [10 July], focusing on the strength of the business as a compelling and attractive proposition, and mentioning the self-help and disposal position”. Five days later, Carillion announced the £845m profit warning that marked the beginning of the company’s death spiral.

The meeting was also partly attended by Peter Moorhouse of the investment bank Morgan Stanley, which was an adviser to Carillion. He told the meeting that the bank was “not able to underwrite the proposed equity issue” and had withdrawn as sponsors.

The Carillion directors rejected his view, the minutes show, concluding that it had “discussed the rationale given by Mr Moorhouse, reflecting that it was not credible”.

Green did not return phone calls.”

Privatisation: National Audit Office calls out academy schools

“The National Audit Office has issued a report questioning the Department for Education’s ability to continue converting large numbers of maintained schools to academies.
The watchdog said that the DfE was “taking longer than intended to convert a sizeable proportion of the underperforming schools it believes will benefit most from academy status”.

At January 2018 the Department had converted 6,996 maintained schools to academies. The process has cost it an estimated £745m since 2010-11, of which £81m was spent in 2016-17.

The NAO report – Converting maintained schools to academies – highlighted how a much higher proportion of secondary schools than primary schools were academies. Some 72% of secondary schools, including free schools, were academies compared with 27% of primary schools.

“This leaves local authorities with responsibility for most primary schools and specialist providers, but few secondary schools. In areas where a high proportion of secondary schools are academies, it is more difficult for local authorities to take an integrated, whole-system approach to the education of children in their area,” the NAO warned.

The watchdog also found significant geographical variation in the proportion of schools that were now academies. This varied across England, from 93% in Bromley to 6% in Lancashire, Lewisham and North Tyneside. There were 23 local authorities (15%) that had 150 or more maintained schools, while 55 local authorities (37%) had fewer than 50 maintained schools, it said.

The report also found that:

Almost two-thirds of schools rated as inadequate by Ofsted and directed to convert, with the support of a sponsor, took longer than the nine months the DfE says it should take to open as academies. The NAO estimated that, at January 2018, there were 37,000 children in maintained schools that Ofsted had rated as inadequate more than nine months before but that had not yet opened as academies.

The Department had found it difficult to find sponsors for some of the most challenged schools. “In particular, small, sometimes remote, primary schools can find it challenging to attract local sponsors and integrate into multi-academy trusts.” There were 242 sponsored academies that were more than 50 miles from their sponsor. …”

NHS and Social Care Privatisation on all our doorsteps – Devon 111 service outsourced to company with BIG ideas

“The Company is engaged in delivering its ‘buy and build’ expansion strategy, adding to the range of services provided by the Group through working with organisations that share its vision.

Focused on out of hospital healthcare worth in excess of £20bn per year – the NHS is moving non-acute care components out of hospitals and closer to home

Buy and build consolidation strategy fitting with NHS trend towards outsourcing and outcome based commissioning

Targeting attractive companies in the UK health sector that share Totally’s vision for integrated and cohesive out of hospital healthcare
Build and develop a high-quality diversified group through organic and acquisition based growth

Become one of the leading out of hospital healthcare providers in the UK
This strategy is supported by ambitious management who have identified public-market outsourced health services as an attractive prospect and have developed a plan to fully develop this opportunity.”