Wednesday, December 26, 2012

Hinchingbrooke - a (very minor) correction

Mr Birrell has, correctly, pointed out that I was mistaken in saying that the Public Accounts Committee had condemned the franchising arrangements at Hinchingbrooke Hospital. In fact, the Committee has yet to issue a final report. I should instead have said that members of the Committee had condemned it. I was thinking, in particular, of the closing comments of one of their members in their report of evidence taken: “I have to say, this should never ever happen again, because it is a financial disaster for value for money and for taxpayers.
I should also have mentioned the report into the franchising by the National Audit Office, which was the basis of the Committee’s hearing. Although measured in its wording, concludes that “The Authority should work with the Department to undertake a formal lessons learned process before agreeing any further franchise agreements.” This is on the basis of a long catalogue of problems, including a lack of clarity about transfer of risk and what measures of success were being used. One of the Committee members, used to reading these reports, describes it as “probably the worst report of financial incompetence in the NHS that we have seen. The chair noted that “I haven’t read a Report as bad as this on the health service. This is probably the worst.”
The views of the members suggest a fairly consistent tone of incredulity, such as “this report is chock-a-block full of people saying, "Never before anywhere in the NHS has this level of savings been achieved." McKinsey, who are probably the consultants who are around the NHS more than anybody, say that they think it is unachievable. We accept that it is early days. We know from Mr Parsa that they have not got to where they planned to be when they put the bid in to you. We know from the document here that they added 25% savings in at the last minute to give you a viable bid that you could accept. You seriously sit here and think that that will be achieved? You are seriously doing that?
Of course, as the evidence presented to the Committee and the NAO report indicate, there are many serious concerns about the franchising process, and not just the fact that Circle has a get out clause if it racks up excessive losses. But then, maybe this is unsurprising, given the description of the calculation of risk in public-private partnerships as "pseudo-scientific mumbo-jumbo".
I do hope that this has put the record straight. The Committee has not yet reached a considered conclusion on the Hinchingbrooke franchise but, I would suggest, it is already pretty clear what it is likely to be.

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