Suffolk: Serco expects £9m loss in first year of groundbreaking deal providing community health to 500,000 vulnerable people

Annie Topping, chief executive of Suffolk Healthwatch, said she is concerned about the potential impact that financial losses may have on the experience of patients and service users. Annie Topping, chief executive of Suffolk Healthwatch, said she is concerned about the potential impact that financial losses may have on the experience of patients and service users.

Tuesday, December 17, 2013
12:30 PM

The private firm providing community health services to more than 500,000 vulnerable people in Suffolk has said it expects to make a £9million loss in its first year.

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The news provoked concerns over the future quality of care given to patients as it emerged outsourcing giant Serco is taking the huge hit on a groundbreaking countywide healthcare contract.

In March 2012, the firm won the bidding war to land the contract to provide a range of community health services, including district nurses and community hospitals, to around 600,000 patients in Suffolk.

It agreed to provide district nursing, physiotherapists and paediatric teams over three years until October 2015, for a reported £140m. It is thought the firm underbid the incumbent North Essex Partnership NHS Foundation Trust by £10m.

In a Stock Exchange announcement on Friday, the company said: “The financial results for the year to December 31, 2013 will include revenues of approximately £60m and an adjusted operating loss of £3m in relation to this contract.

“The weaker than anticipated profitability of the contract requires a non-cash onerous contract provision covering estimated future losses of approximately £9m to be charged in the 2013 financial year.”

When asked if further job losses in Suffolk could be ruled out, with a reported 90 positions having so far been cut, a Serco spokesman said: “Following Serco’s first year in Suffolk, no clinical staff have been made redundant and, through consultation and redeployment, redundancies among other non-clinical staff have been kept to the equivalent of 29 full-time roles.

“In fact, we are currently recruiting to a number of clinical roles in Suffolk.”

When questioned if the operating loss could lead to an early termination of the contract, as seen in Cornwall with Serco’s GP out-of-hours services ending a year earlier than planned, he said: “No. Serco remains committed to the service in Suffolk.”

He also rejected accusations the operation loss would impair the quality of healthcare provided in the county.

“We have already delivered some early benefits and our standards of care are excellent. This will not change,” he added.

Valerie Michie, managing director of Serco’s Healthcare business, added: “Serco has delivered some early benefits in Suffolk such as reducing the length of stay in the community hospitals by around a week and improving access to the service by establishing a 24-hour care co-ordination centre (in Ipswich) that provides a single point of contact.”

Jeff Keighley, regional organiser at Unison, said: “They underbid by £10m to get the contract. They chanced it and it has stung them. They were not ready to run the contract.

“We warned them it was not going to work. We handed in a 160-page petition saying so.

“They thought they could put in a new information technology system but it has not worked because you can’t get reception in rural areas.”

Annie Topping, chief executive of Suffolk Healthwatch, said: “We are concerned about the potential impact that financial losses may have on the experience of patients and service users.

“The performance management of the contract is the responsibility of the CCGs and we will feed in the views of local people to help them with this.”

A spokesman for the NHS Ipswich and East Suffolk Clinical Commissioning Group and NHS West Suffolk Clinical Commissioning Group said: “Our priority is to ensure Suffolk patients receive the best community healthcare services.

“Serco has affirmed its commitment to the contract and the CCGs will continue to work with them and closely monitor their delivery of these services.”

5 comments

  • Well, privatisation of the Health Service has been a wonderful success, hasn't it?

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    beerlover

    Wednesday, December 18, 2013

  • Not been a good year for Serco. Been kicked off the electronic tagging contracts and now making losses on health service contracts. They say things come in 3's - what's next?

    Report this comment

    The original Victor Meldrew

    Tuesday, December 17, 2013

  • Of course they are going to make a loss. They undercut horrendously to get the NHS contract, then can't run at those figures - result = A loss or worse still, massive cuts. Put the NHS back in charge of healthcare is what I say.

    Report this comment

    Dean

    Tuesday, December 17, 2013

  • it is about time that men should be in some of these top jobs , at least a man will listen to helpfull suggestions. [ a woman ,NO]

    Report this comment

    TERENCE MANNING

    Tuesday, December 17, 2013

  • 500000 vulnerable people in Suffolk? Come on, the whole population of Suffolk is only 1.5M, you're saying a third are vulnerable?

    Report this comment

    trevorwoolnough

    Tuesday, December 17, 2013

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