Aidan ‘I’m No Dirty Den’ Thomas was the Chief Executive of Norfolk and Suffolk NHS Foundation Trust (NSFT) during the Trust Service Strategy (TSS) consultation process, better known as the ‘radical redesign’.
The ‘radical redesign’ was condemned by the King’s Fund in the Health Service Journal (HSJ) and is widely regarded as an unmitigated disaster which resulted in Norfolk and Suffolk NHS Foundation Trust becoming the first mental health trust in England to be placed into Special Measures by Monitor after being rated inadequate by the Care Quality Commission (CQC). NSFT’s Board ignored warnings about the impact of the massive radical redesign cuts from its own staff, service users and carers as well as the Royal College of Psychiatrists, the BMA and Unison. NSFT wasted millions of pounds paying its own staff to leave in the midst of a recruitment crisis.
Just as the ‘wonderful’ radical redesign ‘service improvements’ were due to begin, Aidan Thomas conveniently decided he wanted to work for a smaller trust, despite ‘leading’ the merger of the Norfolk and Suffolk mental health trusts and saying how fantastic the TSS cuts would be.
Aidan Thomas leveraged his reputation for ‘momentous change’ to secure new employment as the Chief Executive of Cambridgeshire and Peterborough NHS Foundation Trust (CPFT) where he earns a salary of between £140,000 and £145,000 per year. Between jobs, Aidan Thomas appears to have received the NHS executive’s near-obligatory full-salary-for-sitting-in-the-garden-between-jobs, or, as NSFT put it to us in an FOI response ‘Mr Thomas served the standard notice period for the post and, during that notice period, he was appointed to and took up his role as CEO of Cambridge and Peterborough NHS FT.’
In CPFT’s Annual Report and Accounts 2015-16, Aidan Thomas claims:
The most momentous change since achieving foundation trust status also took place in 2015 as CPFT with its partner, Cambridge University Hospitals NHS Foundation Trust, won the contract for the delivery of integrated care for older people. Despite the end of the contract after only eight months, the Trust successfully implemented a huge change programme across the county; introducing Joint Emergency Teams, integrated Neighbourhood and Locality teams, and increasing the size of CPFT by more than a third in the process.
We thought Aidan Thomas wanted to work somewhere smaller?
The prestigious and influential House of Commons Public Accounts Committee (PAC) sees Aidan Thomas’ ‘momentous change’ rather differently:
‘Grossly irresponsible’ rush into contract led to catastrophic failure
16 November 2016
The Public Accounts Committee report warns that services for patients are likely to suffer following the collapse of an £800 million contract to provide older people’s and adult community services.
In their report, the Committee describes the handling of the contract between Cambridgeshire and Peterborough clinical commissioning group (the CCG) and UnitingCare Partnership as a catalogue of failures.
It sets out urgent recommendations to address the lack of commercial skills in the NHS and calls on NHS England and NHS Improvement to improve the oversight and supervision of contracting arrangements to “avoid such catastrophic failures in future”.
The UnitingCare Partnership contract began in April 2015 and was terminated after only eight months because of a failure to reach agreement on contract cost.
The CCG “tried to outsource its own responsibility”
The termination led to unfunded costs incurred by UnitingCare Partnership totalling at least £16 million, which had to be shared between its two trust partners—Cambridge University Hospitals NHS Foundation Trust and Cambridgeshire and Peterborough NHS Foundation Trust—as well as the CCG.
This worsened their financial positions and reduced the money now available to provide patient services in Cambridgeshire and Peterborough.
The Committee concludes that by putting the contract for older people’s and adult community services out to tender, the CCG had “tried to outsource its own responsibility” to commission local health services.
Case demonstrates “lack of commercial skills in the NHS”
There was a “fundamental mismatch” between what the CCG expected to pay for the contract and what UnitingCare Partnership expected to receive, and “it was grossly irresponsible of the trusts and the CCG to rush ahead with the contract without sufficient clarity on the costs and the risks”.
The case is a further demonstration of the lack of commercial skills in the NHS to procure patient services effectively, says the Committee.
It finds the contract set-up exposed weaknesses in regulatory and oversight arrangements and warns that if these are not addressed, they “may reoccur in local initiatives proposed as part of sustainability and transformation plans”.
Meg Hillier MP, Chair of the PAC, said:
“It beggars belief that a contract of such vital importance to patients should be handled with such incompetence.
The deal went ahead without parties agreeing on what would be provided and at what price—a failure of business acumen that would embarrass a child in a sweet shop, and one with far more serious consequences.
Services for patients are likely to suffer and we will be expecting the clinical commissioning group to come clean about precisely how much damage has been done in terms of future service provision and finances.
Local MPs have told me that they could not get answers to concerns they raised about this contract, which in turn raises questions about transparency.
Our Committee is well aware of the financial pressures bearing down on the health system.
On November 3 I wrote to the Prime Minister setting out the PAC’s concerns about the sustainability of the NHS budget, highlighting evidence from our reports and hearings on the NHS throughout this year.
Against this backdrop, it is understandable that those responsible for providing services will explore new ways of doing so.
What is not acceptable is for services to be farmed out to the lowest bidder without due regard for the interests of patients and taxpayers in general.”
PAC Member Karin Smyth MP said:
“While this case is specific to Cambridgeshire and Peterborough we are concerned that it reflects weaknesses in the NHS that could result in costly mistakes elsewhere.
The Public Accounts Committee has previously called for measures to improve commercial skills in the NHS and once again we have seen the effects of what appear to be gaping holes in its abilities.
There have now been multiple reviews prompted by this project, which will come at a cost, and the CCG continues to rely on consultants—at the time we took evidence, it had lined up an £800,000 contract for advice on how to improve its financial situation.
NHS leaders need to address this lack of commercial expertise as a matter of urgency to ensure no more taxpayers’ money is wasted on ventures that, while well-intentioned, are simply not fit for purpose.”
Among its recommendations, the Committee calls on Cambridgeshire and Peterborough CCG to explain in its sustainability and transformation plan “the impact of this contract failure on its ability to deliver health care services”.
More broadly, the Committee urges local commissioners to take responsibility for designing more integrated systems of healthcare themselves and “not abdicate commissioning responsibilities to a body which is not clearly accountable to the taxpayer”.
NHS England should set out the minimum steps CCGs should take to assess “the realism and viability” of bids for contracts to provide services, and also report back by April 2017 on what specific action it has taken to improve the quality of commercial skills available to local NHS bodies.
In December 2015 an £800 million contract for UnitingCare Partnership to provide older people’s and adult community services collapsed after only eight months because it ran into financial difficulties.
Cambridgeshire and Peterborough clinical commissioning group (the CCG) attempted to design a more integrated and improved service for patients in the area. But, in contracting out responsibility for commissioning local health services, it lost sight of its own commissioning responsibilities.
The procurement exercise was undermined from the start by poor commercial expertise, a lack of realistic pricing, and weak oversight.
“Catalogue of failures resulted in unforeseen costs and losses”
The CCG accepted the lowest bid on the table, without seeking proper assurance that the two trusts, which had combined to form the UnitingCare Partnership, could deliver for that price.
It was then grossly irresponsible of the trusts and the CCG to rush ahead with the contract without having resolved significant differences in their understanding of the contract price or indeed the scope of services that were included in that price.
The catalogue of failures resulted in unforeseen costs and losses, and services for patients in Cambridgeshire are likely to suffer as a result.
NHS still lacks procurement expertise
Following the collapse of the Hinchingbrooke franchise, this Committee made a specific recommendation that the NHS should improve its commercial skills, yet it still lacks the expertise to ensure that patient services are procured effectively.
This is all the more worrying as local initiatives proposed in sustainability and transformation plans may still include CCGs using new or untested contracting arrangements.
With the NHS budget so stretched, innovative solutions are likely to be part of attempts to make the NHS financially sustainable.
NHS England and NHS Improvement must improve the oversight and supervision of contracting arrangements and avoid such catastrophic failures in future.
Below is a selection of Aidan Thomas’ ‘evidence’ to the PAC in September 2016.
It is shocking that Aidan Thomas has never been held to account in the same rigorous manner for his role in the ‘radical redesign’ catastrophe at NSFT. It might have prevented the UnitingCare fiasco.
You can also watch the video of proceedings by scrolling down to the bottom of this page.
Q65 Karin Smyth: May I ask—sorry, it’s a three-way go now, isn’t it? To Ms Dowling, Mr Thomas and Mr Sinker: do you accept that the money that was available to fund the transformation—the £10 million—was inadequate?
Tracy Dowling: I think the cost of transforming services was more than that £10 million. The CCG did not have a view that that was the only funding that the accountable provider would be putting into transforming services, and I think that is one of the areas where there was a difference of opinion between the commissioner and the UnitingCare Partnership.
Q66 Karin Smyth: Does anybody else want to comment?
Aidan Thomas: The transformation moneys that were agreed were in addition to resources that trusts like mine already had. We already had services on the ground and, for example, we had things like programme management support because we had done lots of other major changes prior to that. I think at the time we were not of the view between us— between the CCG and UnitingCare—that the transformation moneys were inadequate.
Q67 Karin Smyth: You weren’t? You thought it was adequate?
Aidan Thomas: Yes. Sorry for the double negative.
Chair: It is very warm in here.
Q96 Chris Evans: Mr Stevens, Monitor has had 34 outstanding issues in negotiations on the contract. It was not signed off until the day it was signed. I am looking at paragraph 1.8 of the Report, which says that Cambridge and Peterborough NHS Foundation Trust wanted to win the contract because they feared that a “reduction in its income might reduce its viability as a foundation trust in future.” Was that a consideration even though there were 34 individual problems with the contract, which was yet to be negotiated?
Simon Stevens: Aidan Thomas, the chief executive of the trust, will obviously respond to that.
Q97 Chris Evans: But I want to know why the contract was signed when there were still 34 problems, which was a large amount.
Simon Stevens: I think it is clear that it should not have been.
Chair: Okay, but on the point about the budget—Aidan Thomas.
Aidan Thomas: From our trust’s perspective, the point about the continuation of the trust—particularly the viability of the other services that we ran, because we are a mental health provider for adults and children as well as providing community children’s services in parts of the patch—was important. In our view, it was important that we did our best to win the contract. That is reflected in the NAO’s Report. On your question about how many outstanding issues there were when we signed the contract, it was a concern for everybody on the provider side. I am sure that it was a concern for the CCG too. There was pressure in the system at the time to get the thing going and get the whole thing running. That was partly because there was a need for the economy to deal with its financial problems—if this contract had been allowed to work, it should have dealt with some of that—and because there had been a long period of uncertainty for more than 1,200 staff. There was pressure to get it done. I think we would all agree with Simon Stevens that, in retrospect, it would have been much better to have got those things sorted before the contract was signed.
Chair: To state the bleeding obvious.
Q111 Chair: Okay, but you had this expectation—all three of you were involved—that there would be a 10% cost reduction in efficiencies across the course of the contract. Why did you believe that that was possible if you had such poor data on which to analyse the contract?
Tracy Dowling: In retrospect, I think that that may well have been a flawed expectation.
Q112 Chair: It clearly was. “It may well have been” is very generous. It was, and it is clearly the case that in the overall—
Simon Stevens: With respect, we don’t know because the thing got canned after just a few months. It was for five years.
Q113 Chair: Okay, fair point. We will allow the “may,” but 10% was a very neat number. We are a bit nervous about neat numbers on this Committee because it seems like it is retrofitted to the budget curve that you’ve got. Aidan Thomas, you said earlier that “it was very important that we did our best to win the contract” in response to Ms Smyth’s question about your budget deficit. But didn’t this £752 million help you to meet your budget deficit? Was that the reason for the figure that was being put forward to run the UnitingCare Partnership for clinical services?
Aidan Thomas: We put forward what we thought was an appropriate bid. We were trying to win the contract and that was an appropriate bid. There were lots of caveats because there were, as you know from the NAO Report, a lot of things we didn’t have enough information on.
Q114 Chair: May I say, Tracy Dowling, it was cheaper than other bids—quite a lot. There was a challenge back, but then you just accepted the figures.
Tracy Dowling: Yes, there was a challenge back from the CCG to the provider about the price and being clear about all assumptions on what had to be provided for that sum. UnitingCare clarified that it could provide the services for that sum.
Q115 Chair: So, Mr Thomas, before you answer the other point, and Mr Sinker too, did you assume that you would get more money if necessary and if there was a problem?
Aidan Thomas: As we have heard, there was a significant number of things in the contract where the information wasn’t clear and where we had either specific agreements or conditions precedent in the contract that meant we were expecting to negotiate or have clarity over those.
Q116 Chair: With respect, you went into a contract with a figure and an efficiency target and both of you expected, after the contract was signed, to negotiate over price issues during the lifetime of the contract.
Aidan Thomas: Yes.
Q117 Chair: Mr Sinker.
Roland Sinker: Yes.
Aidan Thomas: May I clarify the efficiency point? You raised the question earlier, Chair, about the potential savings. When the model around UnitingCare was originally designed, as bidders we tested different elements of it with people like the King’s Fund to try to find out which and what was possible. In fact, if you look at the model as a whole, it is largely made up of things that have been tried in part elsewhere. They just haven’t ever been tried together. That’s what we based it on.
Q118 Chair: But the King’s Fund, much as I respect it, is a long way from patients on the ground in Cambridgeshire. At that date, you were assuming in your business case that you would be able to negotiate 20% of additional funding for the CCG. So you had a low bid, but you believed you would get more money. Isn’t that right?
Aidan Thomas: We made a bid to win the contract, of course, but we also—
Q119 Chair: I am listening to your words very carefully. To win the contract you needed to have a low bid, so did you bid low to win the contract?
Aidan Thomas: We bid as low as we thought—
Sir Amyas Morse: The term is “low ball”.
Chair: Okay. The Comptroller and Auditor General makes a technical statement.
Aidan Thomas: We bid as low as we thought we could reasonably do, but we also knew that there were caveats because there was a range of things, as you know from the Report, that we didn’t know about.
Q120 Stephen Phillips: If you look at paragraph 3.6 of the NAO’s Report, it says: “At the final bid stage, the other shortlisted bidders submitted bids at the CCG’s maximum value of £752 million, but UnitingCare Partnership”—the joint venture between your trust and Mr Sinker’s trust—“made a tactical decision to submit a lower bid of £726 million to achieve a more favourable financial evaluation score.” So you deliberately underbid the contract between the two trusts because you needed the work that the CCG was going to deliver to your trusts. That’s right, isn’t it?
Aidan Thomas: No, I don’t think it is right. We didn’t deliberately underbid. We bid to try to win it. If you look at the way the gap—
Q121 Stephen Phillips: All right. That is your answer. What is Mr Sinker’s?
Roland Sinker: We bid to win the contract. We bid to win it for probably two or three reasons. First, obviously, these are the people we are both looking after with both mental and physical health needs. I think we then had slightly different drivers in the mental health trust and the acute trust. The big driver in the acute trust was to look after this population better in the right part of the hospital and ensure that our secondary elective care, our planned surgery and our tertiary services could be provided without cancellation or disruption, and to make good use of taxpayers’ money.
Q122 Stephen Phillips: In order to reach this low figure of £726 million, which no one else could reach and indeed on which the CCG pushed back, you made some assumptions in the business case, didn’t you? One of the assumptions your two trusts made between them was that in fact you could negotiate a 20% additional payment to the joint venture vehicle in relation to those services for which prices were not yet agreed. That is also in the Report and the Report is agreed. Is that right?
Aidan Thomas: It is in the Report and I have no problem with the Report, but I would add that there are a number of areas where I think it would be have been impossible to be clear when we bid exactly how much we would get out. To give you an example, the contract was let before the end of the financial year and due to start in the April. As part of that, it was not clear what the out-turn from the acute hospitals would be. The contract included buying the acute hospitals capacity in the area. That is a good example of where it would not be possible to be clear. I have been clear that signing a contract without all those things being clear is not, in our view, the right thing to do for the future; Simon Stevens is absolutely right.
Q123 Stephen Phillips: Mr Sinker and Mr Thomas, did you make the CCG aware that far from £726 million, you were in fact going to be asking
them after the contract had been signed for another £144 million at some point?
Aidan Thomas: The CCG—
Stephen Phillips: It is a very easy question, to which the answer is yes or no.
Aidan Thomas: The answer is that in terms of the specific amount, no, but in terms of the quantum of the various issues, there was discussion.
Q124 Stephen Phillips: Right. Mr Sinker, did you tell the CCG that you were going to need another £144 million in order to deliver the contracted-for services?
Roland Sinker: We dealt with the risk of that by putting the caveats and the additional due diligence in place, and used that as the vehicle to say that we were going to have to come back to this—
Q125 Stephen Phillips: I will ask my question again, Mr Sinker. Did you tell the CCG that you were going to need another £140 million-plus in order to deliver the services for which the joint venture was contracted?
Roland Sinker: My belief is that we didn’t give them the exact number, but we—
Q126 Stephen Phillips: Do you want me to ask the question again, or are you going to answer it? Did you tell the CCG that in order to deliver the services that the joint venture was contracted to provide, you were going to need in excessive of another £140 million?
Roland Sinker: No, we did not give them the number of £140 million.
Q127 Stephen Phillips: Right. Ms Dowling, were you aware that they were going to need another £140 million at any stage?
Tracy Dowling: No.
Q128 Stephen Phillips: And now I think we might have identified why this catastrophic contract fell apart. Let’s move on.
Q168 Philip Boswell: I have two questions to Mr Thomas and Mr Sinker. You intimated in answer to Mr Phillips’s earlier questions that risk management was indeed carried out. If so, why? Unlike your competitors, was adequate contingency not included in the bid? Secondly, given your
stated keenness to win the bid and the disparity, did you effectively buy this contract hoping to make good any deficit using variations of subsequent renegotiation?
Aidan Thomas: No, we did not buy the contract. I want to add to what Roland said earlier is that the other thing is that we wanted to make the contract work. We were actually very proud of the model, and UnitingCare had done a lot of work even prior to the contract award to work with local people to get the contract ideas sorted and to get engagement. So from that perspective, we did not buy the contract, and I want to state that very clearly. Will you just remind me of the first part of your questions?
Q169 Philip Boswell: If risk management was carried out, why then was adequate contingency not included in the bid?
Aidan Thomas: We of course did look at risk, and that was actually one of the biggest parts of discussion we had with Monitor about the contract itself and the trust’s position in relation to that. There would have been a slightly different process, I think, for Addenbrooke’s, but we certainly did look at risk and we did look at contingency. We were aware of the risks to the trust in it, as well as the wider risks. I do not want to give the wrong impression either from what I said earlier. I think the savings potential in the contract was there. I personally, in a long career in the NHS, have seen some of the things in that contract work, on a different scale. So I firmly believed that it could work. What I would add, though, is that it has never been done on the scale of this, and that is the bit that is untried.
Roland Sinker: I agree with everything that Aidan said. My only build would be the contingency that Addenbrooke’s had available to support the contract was eroded as our financial position deteriorated during the course of the financial year and we became in support of liquidity funding from the Treasury.
Aidan Thomas: Can I add something? The other thing on risk management, which I didn’t say before, is that of course part of the risk management were the conditions that were put in the contract. So that was part of how it was handled.
Chair: We will go back to that in a moment.
Q174 Caroline Flint: Sorry to interrupt you, Mr Sinker. Yes, you are absolutely right that the foundation trusts should have been thinking about these things, but if you are setting up a particular partnership, why wouldn’t you seek the correct advice from whomever to say, “Can we be absolutely clear what we will and will not be liable for by setting up this partnership—this type of LLP?”
Aidan Thomas: On the VAT issue we did seek advice—that’s the one you mentioned. We took advice from different companies on the tax implications, and we—
Q175 Caroline Flint: Who did you take advice from?
Aidan Thomas: At the time—hang on a second.
Chair: Did you take advice—
Aidan Thomas: We took it from KPMG and HMRC. I think it is fair to say that—this links to a point earlier made by Ms Smyth—if you look at what was happening, this was NHS money going through an LLP but into NHS services. It wasn’t clear from HMRC at the time, and it still finally isn’t, what the VAT relations were.
Q176 Chair: Sorry, you say it finally isn’t—
Aidan Thomas: My understanding—
Chair: But the NAO report is pretty clear that the VAT was not reclaimable.
Aidan Thomas: It’s still not finally clear from HMRC.
Q177 Chair: We are seeing HMRC in a few weeks, so I just want you to be really clear on this.
Aidan Thomas: I think I am talking in general terms.
Simon Stevens: Maybe we could get you a combined note on what the current issue is, as we see it—or as the team sees it—on VAT. Obviously, the VAT Act 1994 is quite complex—
Chair: It is extraordinary. It may be complex but you have HMRC and lots of clever, highly paid tax advisers and I am sure that someone could have got this right.
Q178 Caroline Flint: I think this goes to the heart of the concern about the assumptions made of what you would be liable for and therefore, the costs of running the contract, and to what Mr Boswell said—did you say it was a lowball, Auditor General?—about doing a bid that was far too low in terms of what you could expect to have to pay out for and what you could expect in terms of additional funding from the CCG. It all adds to a sense that you were not really clear about what it was all going to cost.
Aidan Thomas: I think this goes back to the point that Simon Stevens made earlier; it is very clearly in one of his seven recommendations. I agree that the right thing in future, and the thing we are all mindful of, is that we should not be agreeing contracts where we have large numbers of outstanding uncertainties. We did take advice on VAT; it’s just that it wasn’t clear.
Q179 Caroline Flint: All right, you’re saying that you took advice on VAT but it wasn’t clear whether or not you would be liable for VAT. But you still decided to go ahead on the basis of the contract you set up.
Aidan Thomas: Well, we managed—
Q180 Caroline Flint: You made a huge assumption.
Aidan Thomas: No, we didn’t. We managed the risk that was associated with it. As I answered to Mr Boswell, it was included in discussions we had with the CCG about how the contract was run.
Caroline Flint: Managing the risk sounds like you are shoving it under the carpet to me. These are very serious matters.
You can, if you can bear to, watch Aidan Thomas’ evidence to the PAC below. The hearing is a masterclass in the NHS Blame Game.
If you have trouble watching the embedded video, visit the House of Commons website page for the hearing. Skip to 15:32 to see Aidan Thomas in action. If you have time, it is worth watching from the beginning but it is depressing too.
The infamous ‘I’m No Dirty Den’ email
To aid recovery by the provision of light relief, we’ve also reproduced Aidan Thomas’ infamous ‘I’m no Dirty Den’ email which he sent to all NSFT staff, most of whom had busy jobs and had no idea what he was talking about. The email was reproduced in the Telegraph, Daily Mail and Mirror:
You may or may not have heard of some rather interesting allegations made against me, and I just wanted to put the record straight.
Can I say from the start that some of the stories I have heard have been quite entertaining and have cast me in a role more akin to EastEnders than to running an NHS Trust.
However, unlike Den Watts, my life is a bit more mundane than you might think.
Fans of Jeremy Kyle may be disappointed by the news that I’ve been happily married to my wife Sarah for 24 years and that we have two fantastic children who I think the world of.
Sarah and I have just come back from a week’s trip to Paris and are now planning our family Christmas with our son and daughter.
I took the decision some years ago, when I got the job as the Chief Executive of the then Norfolk and Waveney trust, based in Norwich, to remain living in Essex while my children were at school.
The distance between Essex and Norwich has been a strain, and so when I work late (and I now tend to do that once or twice a week), I rent a room in the doctors’ accommodation at the Julian Hospital rather than spend three hours driving home and then back to the office.
I pay the full rate for this and don’t claim it back on expenses.
I used to rent a bedsit but thought it better that my rent went to the Trust than to a private landlord.
Sorry to disappoint those whose minds run wild about what I might be getting up to while I’m away from home
I’m generally on the phone to my wife Sarah, answering emails or reading meeting papers.
Sometimes my fellow executive team members take pity on me and we go out for a curry or comedy night, but for the most part it’s just plain boring.
Earlier this year, we went to the Cromer End of the Pier show, and believe me that’s been pretty much the highlight of my overnight stays.
Although initially I thought that it was better to ignore these rumours, they have continued and are also very unfair and hurtful to the other staff mentioned and to my family.
Over the last few months the rumours seem to have been getting more and more bizarre, and so I have now decided to say enough is enough.”
Aidan Thomas Chief Executive