Social enterprise ‘costs’ PCT £600,000

Posted on December 17, 2009. Filed under: News stories, Social enterprise |

Healthcare Republic | Neil Durham | 17 December 2009

Plans by a Surrey PCT to hive off NHS services into a social enterprise could cost almost £600,000, according to Unite/CPHVA.

It believes the sum, £4 a head for Kingston’s population, could be better spent on services, such as speech and language therapists, health visitors, physiotherapists and community nurses.

Using a Freedom of Information request, Unite discovered that £181,000 has been spent in 2008/9 on becoming ‘an autonomous provider’ and ‘business ready’ organisation. A further £79,000 has been earmarked for this ‘externalisation of provider services’ for 2009/10.

If the social enterprise is not eligible for VAT refunds for the purchase of goods and services, the extra cost will be £300,000. The NHS is currently exempt from VAT.

A total of £18,000 has already been spent on ‘marketing and branding’ for the proposed social enterprise, which will be a commercial organisation, able to win and lose contracts to provide services to the NHS for a limited period of time, according to Unite.

The union believes the creation of a social enterprise contravenes health secretary Andy Burnham’s recent policy announcement that the NHS is the ‘preferred provider’ for services.

Karen Reay, Unite national officer for health, said: ‘Money that could be going on services, such as speech and language therapists, is being spent on management consultants and the bureaucracy to create the structures for the social enterprise.’

A Kingston PCT statement said: ‘We are disappointed that Unite continue to misrepresent this positive development for Kingston residents. The social enterprise is being established to benefit the local community in receipt of healthcare services. This innovative development does not contravene Andy Burnham’s recent policy announcement. In fact a recent letter from the DoH was sent to the first wave of 20 ‘Right to Request’ schemes, of which Kingston is one, reinforcing the freedoms awarded to staff working in this new type of organisation allowing them to promote innovation and efficiency to serve their patients better, free of the normal constraints of NHS bureaucracy.

‘An independent review showed that a social enterprise was the most effective way to deliver high quality and better value health services for people in Kingston and five-year financial modelling shows our plans are robust.’

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