'Strong governance' needed for future private-NHS ventures - PAC

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‘Strong governance and clear accountabilities' are needed for future ‘novel or high-risk ventures' in the NHS, The Public Accounts Committee (PAC)'s report into Hinchingbrooke hospital has said.

The report also says that better monitoring is needed and the dispute over the Care Quality Commission (CQC)'s report into Hinchingbrooke risks distracting the trust from improving care.

Circle expects to hand back responsibility for running Hinchinbrooke to the NHS by the end of March 2015, but remains "open" to the idea of running more NHS trusts.

The full report comes following the investigation launched in January 2015 after Circle's announcement to withdraw from the contract early.

At the start of the next parliament the Department of Health should report to the committee about the lessons learned from the franchise to inform future dealings with private providers.

The CQC should evaluate whether its monitoring system is resulting in sufficiently accurate ratings, the report says.

Circle's announcement to withdraw came the same day as the publication of a CQC report into the hospital criticising some services.

Margaret Hodge, chair of the PAC said: "Whilst this was an innovative - but ultimately unsuccessful - experiment, we are concerned that none of those involved in the decisions has been properly held to account.

"Despite our warnings about the risks, oversight of the contract by the various parties who had a role was poor and inadequate and no one has been held accountable for the consequences."

She added: "We are also concerned that lessons on awarding and managing major contracts will not be learnt from this venture.

"The Department told us that no trusts are currently considering an operating franchise model, but the NHS continues to award major, high value contracts.

"Public bodies will not achieve value for money from their contracts until they become more commercially skilled - both in letting contracts in the first place, but also in ongoing contract management."

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