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Author Topic: 700 jobs at risk as NHS England signs £330m Capita deal  (Read 1365 times)


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700 jobs at risk as NHS England signs £330m Capita deal
« on: August 12, 2015, 11:37:06 pm »

700 jobs at risk as NHS England signs £330m Capita deal

11 August, 2015 | By David Williams    HSJ

NHS England has completed a £330m, seven year deal to outsource primary care support services to Capita, putting more than 700 jobs at risk.

700 jobs at risk as NHS England signs £330m Capita deal

•Capita and NHS England sign £330m deal to run primary care support services
•Contract will cut costs from £68m a year to £47m
•More than 700 NHS England jobs at risk
•Analysis suggests NHS England’s savings target has been relaxed

The outsourcing giant will take over from 1 September. The contract could be extended for a further three years.

It means the annual cost of the service will fall from £68m, as stated in NHS England’s 2015-16 business plan, to £47m. This is planned to be driven by hundreds of redundancies and the adoption of centralised administration and technology functions.

The saving of £21m is worth 31 per cent of the current stated running cost of the service. This raises questions over whether the level of savings that the outsourcing firm is expected to make has been relaxed.

A briefing sent to primary care support staff last month said NHS England had set Capita the challenge of reducing the cost of the service by 40 per cent. This would require savings worth £6m a year more than Capita has actually been contracted to deliver – or £42m over seven years.
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HSJ understands that one of the final points of negotiation between NHS England and the company was how much the firm would be paid to make staff redundant.

Capita was announced as the “preferred bidder” in June. The firm’s plans for primary care support, seen by HSJ, include a phased closure of 29 offices by October next year, putting 720 permanent jobs in doubt and leaving just two existing NHS facilities providing the service.

A third office, run by Capita’s subcontractor Anglian Community Enterprise, will remain open in Clacton, Essex, aided by two Capita offices in Darlington and Mansfield.

Consultation with staff on the plan is ongoing.

Preston skyline

One of the two NHS offices to stay open is in Preston, where 128 people are employed

A Capita spokesman said: “The focus of the contract that NHS England has awarded to Capita is to provide service improvements and efficiencies in delivering these services. Capita has proposed a number of changes, and under the terms of the contract Capita will be responsible for funding any redundancy payments.”

The redundancy bill could top £30m if long serving staff receive the maximum payout of two years’ salary.

The majority of the primary care support staff at risk are in Agenda for Change bands 2, 3 and 4.

HSJ analysis of leaked staffing data shows that the maximum salary bill for the sites earmarked for closure is around £15m. This does not include other employment costs such as pension contributions.

The two NHS offices that will remain open are in Preston, where 128 people are employed, and Leeds, which employs 48.

The deal has been opposed by the British Medical Association. GP committee deputy chair Richard Vautrey said doctors feared that practices would lose the relationships they rely on with primary care support staff. While there may be some efficiencies that could be made, “the big question is whether Capita have enough resource to deliver the service – PCS was already overstretched”.

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Readers' comments (15)

Anonymous | 12-Aug-2015 9:31 PM

I predict by January 2017, Capita will be seeking to pull out of a loss making contract that will cost them about£20m/pa. Just like Serco and Circle who also promised Herculean savings to the NHS - and then walked away.

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Anonymous | 12-Aug-2015 10:55 PM

The NHSE has swapped a benefit of up-front investment for a loss of control and long term payments to CAPITA. Outsourcing can work, but this is a desperate move by the NHSE and hidden costs will almost certainly mean the deal will be far more expensive going forward.

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