The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:
“It is disgraceful that the public had to rely on whistleblowers to find out that the out-of-hours GP service in Cornwall, provided by private contractor Serco, was short-staffed and substandard, and that service data was being manipulated, making the company’s performance look better than it was.
“The company responded in bullying and heavy-handed style, inhibiting staff from revealing the real facts about the out-of-hours service being provided to patients in Cornwall. The contractor launched its own internal investigations to identify whistleblowers and went so far as to search employees’ lockers. This made staff feel threatened and fearful of raising further concerns.
“Data was falsified on 252 occasions. The company had no explanation for this. The terms of departure of the staff in question included confidentiality clauses but again the company could not convincingly explain why they were needed. This committee can also see no justification for their use.
“The large private providers coming on to the scene are better at negotiating contracts than delivering a good, value for money service. The quality of the service Serco is providing in Cornwall fell short of national quality standards and declined significantly following the introduction in May 2012 of NHS Pathways, the new computer-based system for answering calls from patients.
“The primary care trust was deeply ineffective in managing Serco’s performance, and made some bonus payments despite the fact Serco’s performance was falling well short of what was required. Even when it knew that Serco staff had massaged the figures, the trust did not fine the contractor or terminate the contract.
“The failures in this contract matter, because the NHS will be making increasing use of private and voluntary providers to deliver NHS services. We must have confidence in the ability of NHS commissioners to contract effectively, to monitor rigorously, and to extract appropriate penalties and where necessary terminate contracts. None of these conditions were met in Cornwall.
The NHS must learn the lessons from this failure and ensure a step change in performance. The new clinical commissioning groups will need access to adequate procurement skills and advice, to ensure contracts are well-designed and secure value for money for the taxpayer.”
Margaret Hodge was speaking as the Committee published its 15th Report of this Session which, on the basis of evidence from Serco, the former strategic health authority, the former primary care trust and the clinical commissioning group, examined the provision of the out-of-hours GP service in Cornwall.
Out-of-hours services provide urgent primary care when GP surgeries are closed. In early 2012 whistleblowers raised concerns that the out-of-hours service in Cornwall was short staffed and that the contractor, Serco, had lied about its performance by altering data. Serco provides the service under a £32 million five-year contract with the primary care trust, NHS Cornwall and Isles of Scilly, until 31 March 2013, and since 1 April 2013 with Kernow Clinical Commissioning Group.
The primary care trust and the strategic health authority did not demonstrate they had the appropriate skills to negotiate effectively with private providers and hold them to proper account for poor performance. Serco, as a large provider of public services is able to win public sector contracts but has not in this instance proved capable of delivering a good service on the ground.
Evidence has confirmed that what the whistleblowers in Cornwall were saying was substantially true. However, Serco appears to have had a bullying culture and management style which inhibited whistleblowers from being open in the patients’ interest. The company responded to stories placed in the press by whistleblowers in a heavy handed way, launching internal investigations and searching employees lockers when issues were raised, and staff were fearful of raising concerns. Serco initially denied the concerns raised by whistleblowers and it was only after reports appeared in the press that it started to accept that things were wrong. Most concerning was the fact that Serco staff altered data on 252 occasions, resulting in Serco overstating the performance it reported to the primary care trust.
Serco could not explain what motivated the two staff concerned to act in this way. These two staff were not paid a bonus, but Serco conceded that the contract manager had been paid a bonus which was linked to performance. The staff have since left the company. The terms of their departure included confidentiality agreements, but Serco offered no convincing explanation of why this was necessary.
The quality of the service being provided by Serco in Cornwall is not good enough. People rely on out-of-hours services when they need urgent medical care in the evenings, at weekends and on bank holidays when regular GP surgeries are shut. Serco has struggled to ensure enough staff are available to fill all its clinic and car shifts, although it has increased staffing levels in recent months. It has consistently failed to meet the national quality requirements relating to the responsiveness of out-of-hours services and performance is still falling short. However, it is difficult to assess how Serco’s performance compares with other out-of-hours services, because benchmarking data is incomplete and performance against the national quality requirements, that all out-of-hours services are expected to meet, is not collated nationally.
Serco’s performance declined dramatically in the middle of 2012 following the introduction of a new system called NHS Pathways. The system allows call handlers to make an initial clinical assessment as soon as patients call the service. Serco underestimated the number of staff needed to operate the NHS Pathways system and performance against the national quality requirements for answering and assessing calls dropped sharply. There was also a substantial rise in the number of calls passed to the local ambulance service.
The primary care trust did not scrutinise Serco’s performance effectively. When these issues came to light, it did not penalise Serco, withhold payment or terminate the contract. The incentives in the contract were only loosely linked to achieving the national quality requirements, although the primary care trust could terminate the contract in the event of repeated failure to meet the requirements. Serco was one of only two bidders when the contract was let in 2011. Other potential bidders dropped out as they could not stay within the cost ceiling set by the primary care trust. Serco told us that it is currently making a loss on the contract.