"There are many risks to be managed if the Department is
to get value for money from the £900 million 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."
Amyas Morse, head of the National Audit Office, 24 June
2011
The National Audit Office has highlighted risks to value for
money associated with the Department of Health's programme aimed at
enabling its staff to take the lead in leaving the NHS - or
'spinning out' - to set up health social enterprises. These are
independent bodies delivering services, previously provided
in-house, under contract to Primary Care Trusts.
Today's report recognizes that, at this early stage of the
'Right to Request Programme', it is too early to assess its costs
and benefits. Only 20 social enterprises are operational, most
having been launched as recently as April 2011 and therefore having
no track record. What can be said though is that the Department has
not set measurable objectives specifically for the Right to Request
Programme against which to evaluate its success. PCTs expected
social enterprises to deliver more benefits than other providers,
but did not generally contract for them to deliver savings or any
other additional benefits.
The Department did not explicitly set out the expected benefits
of the Right to Request Programme because it believes that the
Programme has contributed to meeting the objectives of a wider
programme, Transforming Community Services. However, according to
the NAO, by not explicitly setting out objectives or contracting
for additional benefits, the PCTs are reducing the likelihood those
benefits will be delivered.
Today's report points out that many risks and liabilities still
reside with the PCTs and will need to be managed if value for money
is to be achieved. In the last resort, the trust or its successors
will be responsible for ensuring that essential services continue
to operate. At least for a time, social enterprises will be highly
dependent on work and cash flow from their respective PCTs. They
will also be operating in an increasingly competitive market owing
to changes in health legislation currently going through
Parliament. PCTs or their successors will need to have a clear idea
of how they will react if enterprises run into financial difficult
or fail.
Publication details:
HC: 1088, 2010-2012
ISBN: 9780102969726