Derailing the NHS

On 17 October 2000, four people were killed and 70 injured in the Hatfield rail crash. A high speed train derailed because of metal fatigue in a section of track that had been tagged for replacement months earlier. Railtrack, the company which had managed the permanent way since British Rail was privatised in 1994, never recovered. In 2001 it went bankrupt, more than £3 billion in debt. In October 2002, responsibility for maintaining railway infrastructure was essentially renationalised with the formation of Network Rail.

A final report from the Office of Rail Regulation in 2006 concluded that fragmentation of the rail industry following privatisation was partly responsible for the Hatfield crash. By contracting out maintenance to Balfour Beatty instead of relying on their own engineers, Railtrack lost control over the condition of the track, over the quality of maintenance, and over costs.

When Railtrack went bankrupt, Christian Wolmar cited Shoji Sumita’s history of Japanese rail privatisation, which argued that Railtrack could make a profit only by charging excessively, or making unsafe cutbacks. ‘Railtrack seems to have done both with disastrous consequences,’ Wolmar wrote. ‘Right from the beginning’, the way Britain’s railways were privatised was ‘flawed’.

NHS England is the quango set up in 2012 to commission NHS health and care services from GPs, dentists and pharmacists in England. Last year it contracted out ‘back office’ services for primary care to the outsourcing giant Capita. The seven-year contract, worth £400 million, was awarded on the understanding that the private company would provide doctors with a better, ‘modernised’ support network, while saving 40 per cent in costs from the day it took over. NHS England has to make £22 billion of ‘efficency’ savings by 2021, of which £1 billion is supposed to come from cost-saving contracts with private providers.

Operating as Primary Care Support England, Capita took over all support services for NHS primary care in England on 1 September 2015, replacing 900 NHS England staff with a workforce of 400. The company is now solely responsible for such functions as moving and storing medical records, making payments to opticians and GP trainees, managing patient registration, updating the list of GPs qualified to work, and providing customer service. But NHS England remains accountable for the quality of the service supplied.

Over the past 10 years, Capita has taken on a number of IT support, payroll and administration contracts outsourced by public sector bodies across the UK, promising ‘smart solutions to the challenges of stretched budgets’. It has held contracts in education, defence, healthcare and local government and has done very nicely out of them, reporting pre-tax profits in 2015 of more than £585 million, though it issued a profit warning in September; the figure for 2016 is predicted to be £545 million, not £614 million as previously estimated.

Capita has been widely criticised for its handling of public sector contracts, for failing to provide the required service on time, for failing to do it correctly or for profiteering. Seven years before Capita was awarded the primary care support services contract by NHS England, it lost a contract for managing the payroll of five NHS trusts following an unacceptable number of staff pay errors.

Robert Morley is a GP and member of the BMA’s General Practice Committee. ‘There’s nothing at all that reassures me this isn’t going to be an absolute bloody disaster,’ he said when NHS England announced in July 2014 that it would be outsourcing primary care support services to save cash. In July this year, 10 months after Capita took over, the BMA warned that the widespread failures of PCSE were posing a significant risk to patient care.

GPs were reporting serious problems with patient records. Capita was failing to move all the paperwork that needs to be transferred when a patient moves from one practice to another. Urgent requests for records when new patients required immediate treatment were not being met. In some cases, confidential records were left in reception areas for weeks waiting to be picked up.

Capita was also failing to keep up with GP supplies, leading to shortages of essential equipment including syringes, certificates and prescription pads. The ‘local performers lists’ of qualified GPs weren’t being updated quickly enough, leaving doctors out of work and jobs unfilled.

When practices complained to Capita, their customer service centres didn’t reply to emails and wouldn’t give answers by phone.

Capita and NHS England said that these were teething problems.

In August, a poll of 213 GPs and 294 practice managers found that in the previous five months, 85 per cent were mising records of recently registered patients, 65 per cent had experienced shortages of clinical supplies or delays in deliveries, and 32 per cent had suffered from missed or delayed payments. ‘So to summarise,’ one practice manager commented, ‘Capita are doing 60 per cent of the job for 60 per cent of the cost. No great shocker.’

By September, the list had grown to include serious delays in the payment of GP trainees’ salaries, so that practices were forced to fund them out of their practice budgets, and delays and mistakes in recording pension payments by locum GPs.

‘These mistakes are directly impacting on the ability of many GPs to provide safe, effective care to their patients,’ said Dr Chaand Nagpaul, the chair of the BMA GP committee. ‘They are in some cases being left without the essential information they need to know about a new patient and the tools to treat them.’

Karen Wheeler, NHS England’s national director of Transformation and Corporate Operations, agreed that the BMA’s concerns were legitimate. ‘Capita has delivered an unacceptable level of performance in a number of the PCS service lines which does not reflect the standard of service that we commissioned Capita to provide,’ she wrote to the GPC. ‘It is a top priority for me to ensure Capita address their performance and resolve all the current issues as fast as possible.’

In October, GPs responding to PCSE’s user satisfaction survey rated their levels of satisfaction with the service at an average of 2.9 out of 10. GP leaders are now advising practices to sue NHS England for the money owed to GP practices that have been covering their trainee’s salaries.

A spokeswoman from Capita said:

NHS England contracted Capita to both streamline delivery of GP support services and make significant cost savings across what was a highly localised service with unstandardised, generally unmeasured and in some cases, uncompliant processes. We have taken on this challenging initiative and we have openly apologised for the varied level of service experienced by some service users.