How not to save £700m
If December is the time of goodwill to all men, the New Year is often the bringer of bad news. In January 2018 Carillion collapsed, with £1.5bn in debts, and the National Audit office estimating a cost of £148m to the UK taxpayer. The impact on the NHS was profound, with eleven and a half thousand inpatient beds under their services and several high-profile hospital construction projects.
A year later and fellow outsourcing giant Interserve is still struggling. Interserve is one of five companies piloting the concept of ‘living wills’.
Capita was tasked with reducing the cost of national services to GP practices by forty percent, whilst delivering a profit for its shareholders, unifying and standardising what had previously been disparate regional services, and ensuring cervical screening letters arrived.
If ever you needed proof that our approach to procurement in the NHS focusses too much on price, and not enough on sustainable quality, look no further.
Less than a month after the publishing of the NHS Ten Year Plan, which promises £700m in back office function savings, Interserve’s announcement acts as a timely reminder that parcelling off complex and gigantic sections of public services to companies who operate on tiny margins, and are, as the banking crisis reminded us ‘too big to fail’, might not be the best way to find bang for your buck.
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