VITAL NHS CONTRACT HANDED TO CIRCLE IN PRIVATISATION SCANDAL
‘The Save Lewisham Hospital Campaign is dismayed and angry at the news that Greenwich CCG has turned down a Lewisham & Greenwich NHS Trust bid for musculoskeletal (MSK) services and given the ‘prime contractor’ contract of £73 million to the private company – Circle. This of course has a direct effect on the financial stability of Lewisham and Greenwich Trust and therefore of LEWISHAM HOSPITAL.’
LATEST NEWS ON CIRCLE CONTRACT
SHAME ON GREENWICH CCG
SHAME ON GREENWICH CCG! They had the sheer nerve to talk about the ‘financial instability’ of the Lewisham and Greenwich Trust – but it is Circle that is trading at a loss!
We fought hard together with Greenwich KONP and Council against Greenwich CCG awarding a £73m contract to private company Circle which would provenly badly affect Lewisham and Greenwich Trust. Now the Circle Board is urging shareholderx to ACCEPT A TAKEOVER FROM A CITY FIRM because Circle is running at a loss. SHAME, SHAME on the CCG.
FROM HEALTH SERVICE JOURNAL 29 March 2017
City investor bids to buy Circle in £74m deal
HSJ 29 MARCH, 2017 BY JAMES ILLMAN
Investment firm offers to buy all Circle shares in deal the firm says values it at £74m
Circle says new investor could provide capital investment it needs to “scale up”
Circle posts accounts for 2016 that show business was loss making, but the loss had been reduced since 2015
A City investment firm is set to buy Circle, one of the NHS’s most high profile private providers, in a deal the company said values it at around £74m.
Circle’s board recommended this morning that its shareholders agree to the deal to sell all shares to Bidco, a subsidiary of London based investment firm Toscafund. Toscafund already owns 27 per cent of Circle’s shares.
Circle used to run Hinchingbrooke Health Care Trust
The offer would see the investment firm pay 30p per share. The shares have been valued at around 22p this month, according to the London Stock Exchange.
The deal will now be put to the rest of Circle’s shareholders, which comprises a small group of large investment firms and a trust that oversees a stake owned by staff of around 25 per cent.
A company spokesman told HSJ: “The offer for Circle Holdings values it at £74.1m overall. Because Toscafund already owns shares, the cost of ‘Bidco’ bidding for the rest of the shares is less.”
The company indicated it believed its strategy would remain broadly the same under the new ownership but Bidco would be able to inject significant capital “to scale the business to achieve sustainable free cash flow and profitability [which] is presently impacted by capital constraints”.
Circle also posted its 2016 annual report today, which revealed it made an £8.1m loss in 2016, improving from the £11.7m loss in 2015. The company’s revenues were up 4.4 per cent on 2015 to £133.5m.
The annual report also said construction on its third hospital, in Birmingham, would begin in 2016, and sets out plans to make a significant push into the rehabilitation market, an area in which it believes the NHS offers it significant opportunities.
The company had to alter its NHS strategy significantly after the collapse of Hinchingbrooke Health Care Trust franchise deal in 2015.
Since then it has focused on elective work at its hospitals in Bath and Reading, and prime provider contracts, including a £74m deal to oversee musculoskeletal services in Greenwich that begins in April. It has been running a similar contract in Bedfordshire since 2014 and runs an NHS treatment centre in Nottingham.
Circle chairman Michael Kirkwood said: “While much progress has been made on many fronts, the need to scale the business to achieve sustainable free cash flow and profitability is presently impacted by capital constraints.
“Under the single ownership of a well resourced bidder, and without the costs and distractions of a public listing, the management team will have greater flexibility to accelerate the growth opportunities that exist and, importantly, maintain the company’s primary goal of outstanding patient care and outcomes.”
An announcement to the London Stock Exchange said: “The offer, in aggregate, values the share capital of Circle (excluding the Circle shares held by the Tosca investors and to be acquired by Bidco under the exchange agreement) at approximately £55.3m and values the share capital of Circle (including the Circle shares held by the Tosca investors and to be acquired by Bidco under the exchange agreement) at approximately £75.2m.”
Circle chief executive Paolo Pieri said: “The management team at Circle believe that it is a positive endorsement to have such strong support from a shareholder with a commitment to our future growth and ambitions, as well as a demonstrated track record of investment in their companies.”
COUNCIL SCRUTINY PANEL CAN’T PREVENT CCG SIGNING CIRCLE CONTRACT 8 MARCH 2017
At this meeting of the Greenwich Healthier Communities and Adult Social Care Scrutiny Panel on 8 March, the panel, MP Clive Efford, campaigners and members of the public questioned Greenwich CCG about the Price Waterhouse Impact Assessment impact report which raised serious issues about the effect on the Lewisham and Greenwich Trust of outsourcing the MSK contract to private health company Circle.
DESPITE severe criticisms from the Scrutiny panel on the basis of the PWC report
DESPITE severe criticisms of campaigners from Greenwich KONP and the Save Lewisham Hospital Campaign
DESPITE a blistering attack from Clive Efford MP on the awarding of such a major private contract to Circle in the Labour Borough of Greenwich.
THE CCG IS GOING AHEAD AND SIGNING THE CONTRACT WITH CIRCLE FOR £73 million over the next 5 years
THIS IS ENTIRELY LEGAL UNDER THE HEALTH AND SOCIAL CARE ACT
What has the intervention of the Scrutiny Panel, Greenwich KONP and the Save Lewisham Hospital achieved?
- We have held the CCG to account. Their decision to award the contract to Circle followed a process which, although legal under the Health and Social Care Act (see below), raised many questions.
- The CCG was forced to agree by the Scrutiny Panel and campaigners to carry out an impact assessment of the Circle contract on Lewisham and Greenwich Trust. It had not done so, and had no intention of doing so, despite the risk of destabilisation of the Trust, the major health provider in the area.
- These interventions and the the resulting Price Waterhouse report which pointed out many problems with the contract, meant that Circle was forced to agree to better terms for Lewisham and Greenwich Trust.
- It was made clear that the Council, MP and and local campaigners were opposed in principle to the privatisation of these services.
- It was made clear that the Council and all of these groups would be holding the CCG and Circle to account over the delivery of the services, due to begin on 1 April 2017.
Video of Tony O’Sullivan speaking for Save Lewisham Hospital Campaign at the meeting
Statement and questions from the Save Lewisham Hospital Campaign 8.3.17
I am Dr. Tony O’Sullivan and I am here to represent the Save Lewisham Hospital Campaign. Our campaign was set up in 2012 to counter the threat to downgrade Lewisham Hospital. We won by defeating the Sec. of State at the High Court. However, Lewisham Hospital – now part of the Lewisham & Greenwich Trust – continues to face huge challenges not least this MSK Service contract.
Our campaign supports a fully-funded NHS where NHS funds stay within the NHS for the public good. We object to the reduction in budget for the MSK Service in Greenwich that this contract represents. We campaign against privatisation of the NHS because privatisation for profit should not be a factor in the delivery of public sector services.
It is our view that this contract and its award to Circle poses an existential threat to the LGT and this is borne out by the PwC report before you.
1: CAN YOU CONFIRM THAT THE AGREEMENT REACHED BY ALL PARTIES WILL BE WRITTEN INTO THE NEW CONTRACT, AND WILL IT HAVE PRIMACY, ie NOT BE OVER-RIDDEN BY OTHER CLAUSES?
- Do these mitigations reduce risk to Amber or better?
- If not Panel should require further work to be done by the three parties.
2: CAN YOU CONFIRM THAT THE CONTRACT WILL NOT BE SIGNED UNTIL THIS AGREEMENT IS WRITTEN INTO THE CONTRACT?
3: THERE IS A COMMUNITY HOSPITAL AT ELTHAM – CIRCLE HAS BEEN GIVEN THIS SITE AND FACILITIES TO MANAGE AS HUB – THERE ARE UNUSED FACILITIES, SURGICAL AND DIAGNOSTIC:
- CAN YOU CONFIRM HOW THOSE FACILITIES WILL BE USED, which PROVIDERS YOU WILL APPROACH, WILL YOU BE INVITING PRIVATE INCLUDED
- HOW COSTINGS WILL BE AGREED? – What tariff cf hospital and what rent?
4: HOW WILL THE CONTRACT BE MONITORED AND HOW WILL THE SCRUTINY PANEL BE INVOLVED?
(Tony O’Sullivan and Jane Mandlik)
SPECIAL COUNCIL SCRUTINY PANEL ORDERS FULL IMPACT ASSESSMENT
3 November 2016
On Thursday 3 November a special meeting of the Greenwich HealthIer Communities and Adult Social Care Scrutiny Panel voted to ask Greenwich CCG to produce an independent impact assessment report on the effects on the local Trusts, especially Lewisham and Greenwich NHS Trust, of giving the £73 million 5-year contract to Circle. Signing of the contract has now been halted until this assessment has been done. We welcome this decision.
In front of an audience of around 60 local people, evidence was heard from Greenwich CCG, NHS England, Circle, the Trust, MP Clive Efford and campaigners. MP Clive Efford told Circle “We are a Labour Borough, with a Labour Council and Labour MPs. We don’t want you here.”
Campaigners and members of the public put forward many questions. NHS England, the CCG and Circle made long presentations but members of the public and campaigners were not convinced on the main areas: why Circle was chosen in the first place, the procedures for decision making on the contract and, thirdly that the CCG had not done any formal assessment on the impact of the Circle MSK contract on the main provider of health care in SE London, Lewisham and Greenwich NHS Trust. (See below for Freedom of Information requests and untruths…) Dr Tony O’Sullivan from the Save Lewisham Hospital Campaign spoke forcefully asking for an impact assessment to be made.
It was on this last point of the impact assessment that the Council Scrutiny Committee decided to challenge the CCG decision.
CRITIQUE OF AWARDING OF CIRCLE CONTRACT BY DR LOUISE IRVINE, CHAIR OF OUR CAMPAIGN
This letter has been sent to Councillors in Greenwich and Lewisham, and CCGs in Greenwich and Lewisham.
‘We are concerned about the risk that this decision will have a serious negative impact on the wider health economy, as we have seen in other areas, and in particular could be damaging to L&G Trust. This could undermine L&G trust’s clinical and financial sustainability and would have consequences for everyone in Lewisham and Greenwich and the other areas from which people access services at L&G Trust. We hope our elected representatives in both boroughs will raise these issues and do all in their power to challenge this decision…’ Read more
FREEDOM OF INFORMATION REQUESTS EXPOSE LIES
Members of the Save Lewisham Hospital Campaign and Greenwich KONP have issued numerous FOI requests to Greenwich CCG, Lewisham and Greenwich Trust and NHS England.
One of the main questions has been whether the CCG carried out an impact assessment of what the effect would be on the local health economy of outsourcing the contract for MSK services to Circle, in preference to the Lewisham Greenwich NHS Trust. This is important because of issues of financial and clinical stability in the Trust particularly at a time of severe reduced funding of the NHS.
Greenwich CCG under questioning at a CCG meeting stated that they had not done an impact assessment because NHS England had done one. A formal Freedom of Information request from Louise Irvine on this point received same answer from the CCG. See Greenwich CCG response to FOI here.
Louise Irvine therefore sent an FOI request to NHS England – their response was that they had not carried out an impact assessment – and it was the CCG’s responsibility to do so under ‘due diligence’.
Therefore, a part of our local health service is being farmed out by a Clinical Commissioning Group to a private company with a dubious record, without any attempt to assess what damage this might cause, not just in Greenwich, but across the Lewisham and Greenwich Trust. Such is the damaging nature of the government’s Health and Social Care Act.
PUBLIC MEETING: STOP THE PRIVATISATION OF THE LOCAL NHS
13 October 2016 7.30pm
Organised by Greenwich Keep our NHS Public with Lewisham Keep Our NHS Public
South East London People’s Assembly Against Austerity and the Save Lewisham Hospital Campaign
INTERVENTION AT GREENWICH COUNCIL HEALTHIER COMMUNITIES AND ADULT SOCIAL CARE SCRUTINY PANEL 27 September 2016
Save Lewisham Hospital campaign members joined Greenwich Keep Our NHS Public members to voice opposition to the Circle contract. There was considerable opposition and very good questioning from Councillors and the public. The Committee refused to endorse the contract and we are waiting to see what the next moves will be.
Letter sent to Councillors on Scrutiny Committee
LOBBY AND QUESTIONS AT GREENWICH CCG MEETING 21 SEPTEMBER 2016
Save Lewisham Hospital Campaign joined with Greenwich Keep Our NHS Public and other health campaigners lobbied and spoke at the Greenwich CCG meeting. Save Lewisham Hospital campaigners asked the CCG group why an excellent bid from Lewisham and Greenwich NHS Trust for muscoloskeletal services, which would have retained the management and delivery of the service within the NHS, had been passed over in favour of a bid from discredited private company Circle. SLH pointed out that this would take money away from Lewisham and Greenwich Trust. All campaigners raised the declared interests of two CCG doctors in Circle. Greenwich campaigners pointed out that Circle is an off-shore company.
No satisfactory answers were given – simply that some patients had complained about ‘uneven pathways’ – wait till Circle gets hold of it – and that NHS England had approved the contract at ‘every stage.’
CONNECTIONS BETWEEN CIRCLE AND GREENWICH CCG
Further we have learned from the Morning Star of connections between Circle and Greenwich CCG.
“…the company’s (Circle’s) medical director Massoud Keyvan-Fouladi is married to Dr Rebecca Rosen — a member of the Greenwich CCG and a GP in the south-east London area… Greenwich CCG confirms that Dr Rosen is a clinical lead on the CCG but adds that ‘she has nothing to do with the contract.’ ” However, a glance at the registered interests of members of Greenwich CCG on their wobsite shows that Rebecca Rosen is a Circle shareholder.
According to the Morning Star, the CCG says that “the tendering process was carried out according to the standard public-sector regulations and the assessment of bids was made by expert evaluators across a range of factors, including clinical quality, finance, staffing and supporting infrastructure.”
The point of contracting it out to a private company is to “streamline” the service, it also claimed. Greenwich KONP had drawn attention to these issues and declared an intention to picket a CCG meeting. Watch this space for news on further activities.
CIRCLE’S APPALLING RECORD
Greenwich Clinical Commissioning Group has chosen the private contractor Circle to take on musculoskeletal (MSK) services in Greenwich, despite the fact that Lewisham and Greenwich NHS Trust had tendered for the contract, which would have kept the service inside the NHS and maintained unity of NHS provision within the Trust. Circle is the private health company that made such a mess of Hinchingbrooke Hospital, abandoning the contract when unable to make any profit.
MSK services include orthopaedics, rheumatology, pain management and physiotherapy and the awarding of the bid to Circle is a blow to the Trust’s financial outlook. The Trust has written to Greenwich CCG ‘to express [its] dissatisfaction with the tender process and the decision that has been made.’
For more on Circle’s record see: