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Report sparks row over NHS social enterprise spin-outs

Governance | Gareth Jones | 24 Jun 2011

The National Audit Office has raised concerns about NHS staff using the Right to Request scheme to create social enterprises, highlighting “risks to value for money”.

Although the report acknowledges that the scheme is at too early a stage to assess its costs and benefits, it criticises the Department of Health for failing to set measurable objectives against which to evaluate the programme’s success.

It says that the Department had not done so because the scheme meets the objectives of a wider programme, Transforming Community Services.

The Primary Care Trusts (PCTs) meanwhile, who are in charge of contracting the services out, have expected that social enterprises will deliver more benefits that other providers, but the report says that by not setting out explicit objectives or contracting for additional benefits, they are reducing the likelihood of these benefits being delivered.

The report also warns that PCTs will need to know how they will react if a social enterprise fails, as many of the risks and liabilities still reside with them.

Amyas Morse, head of the National Audit Office, said today: “There are many risks to be managed if the Department is to get value for money from the £900m contracts awarded to social enterprises.

“The Department needs to reassess its approach, when contracting with social enterprises, of not requiring efficiencies over and above what would have been achieved if the services had remained within the Department.”

“Clear benefits”

A spokesman for the Department of Health refuted the claims, saying that the Right to Request scheme has already delivered “clear benefits” to the NHS and patients.

"The NAO's conclusions on Right to Request fail to understand the point of this initiative in terms both of the quality of care delivered and of cost savings.

“Across the country, the very reason why they have been so successful is that they are led by users of the service - local people - staff - those who are all best placed to deliver responsive services for their communities.”

Social Enterprise Coalition chief executive Peter Holbrook also leapt to the defence of the scheme.

He highlighted the difficulties of drawing fair conclusions when only four of the 47 Right to Request organisations had completed the process, and said that to stipulate the benefits in advance would “negate the ability of these organisations to empower their staff and communities to develop quality services that meet the needs of patients.”

He added: “It is naïve to suggest that social enterprises might not deliver value for money – they’re businesses and their survival depends on it.

“Systems are in place to measure success. Social enterprises have to comply with the Quality, Innovation, Productivity and Prevention (QIPP) programme to ensure that each pound spent delivers maximum benefit and quality of care to patients.

“Up-and-coming social enterprises also have to go through a thorough assurance process against which they’re measured.”

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