Private firm beats award winning social enterprise to run NHS community services

BMJ 2011; 343 doi: (Published 21 September 2011) Cite this as: BMJ 2011;343:d6029
  1. Adrian O’Dowd
  1. 1London

An award winning social enterprise mutual has lost out to a private company that has been named as the preferred bidder to run NHS community health services in Surrey in a deal worth between £450m (€520m; $710m) and £500m.

The primary care trust NHS Surrey has announced that Assura Medical, which is owned by Virgin, is the preferred bidder for community health services in southwest and northwest Surrey in what is likely to be one of the largest NHS contracts ever given to the independent sector.

The fellow bidder Central Surrey Health lost out despite its reputation as the government’s flagship social enterprise mutual. The other unsuccessful bidder was Surrey and Borders Partnership NHS Foundation Trust.

Central Surrey Health was set up in 2006 as an employee owned, not for profit organisation that provides therapy and community nursing services for 280 000 patients (BMJ 2010;341:c6759, doi:10.1136/bmj.c6759). It was named as the prime minister’s first “big society” award winner and has won other awards.

Unions and other organisations have raised concerns about the decision, which they believe indicates that commercial organisations will have a growing role in running NHS services in the future.

Wendy Savage, who co-chairs the steering group of the campaigning organisation Keep Our NHS Public, said, “Let this be a warning to those third sector organisations who have welcomed the Health and Social Care Bill. Turning the NHS into a market will mean that large, sophisticated corporate providers will be able to bid for services and undercut local provision by small voluntary organisations and social enterprises.

“It is not too late to stop this happening, as the [House of] Lords still has to discuss and amend it [the bill] before it returns to the Commons.”

The board of NHS Surrey said that it had decided that Assura Medical was the preferred bidder for services currently provided by Surrey Community Health, the provider arm of the primary care trust, whose services include community nursing, health visiting, physiotherapy, diabetes treatment, and renal care.

A period of “due diligence” will now take place until 31 December, at which point it is possible that Assura will take over the running of services.

A spokeswoman for NHS Surrey said that all staff currently working for Surrey Community Health would have their terms and conditions protected when they become employees of Assura, including access to the NHS pension scheme.

David Clayton-Smith, the trust’s chairman, said, “Although it’s a significant milestone, there is still further work to be done as we enter the due diligence phase. I am confident that this period of additional scrutiny will ensure the recommendation is robust for the benefit of patients and staff.”

Social Enterprise UK, the national representative body for social enterprises, views the development as worrying. Peter Holbrook, its chief executive, said, “If Central Surrey Health, the government’s flagship mutual social enterprise, which has demonstrated considerable success in transforming health services, reducing waiting times, and increasing productivity, can’t win, what does this say for the future of the mutuals agenda?”

He added, “This decision raises lots of questions about the future role of social enterprises in healthcare when they are forced to compete with very large corporates that have much more capital at their disposal.

“We are keen that health services should be driven by patient interest rather than shareholder profits.”

Sarah Hayes, regional organiser for the trade union Unison, said that the decision represented privatisation of primary care services across much of Surrey. “Staff have been quite clear with us that they joined to be part of the NHS and to care for patients and all that the NHS stands for. They have concerns about working for a private company and the unknown that that brings, as well as companies’ drive for profits,” she said.

“We have a real concern that this is the first decision before the Health and Social Care Bill has passed through parliament, that paves the way for other providers and sets a precedent.”

A spokesman for NHS Surrey said that feedback to the bidders was commercially sensitive so would not be made publicly available.


Cite this as: BMJ 2011;343:d6029