The Auditor General’s report, published today, concludes that, while the decision to award the service to Clinical Solutions UK /Europe Ltd (CSUK) in April 2004 was made following a robust selection process, checks into the company’s financial background and clinical experience did not go deep enough.

The report also criticises the LHB’s decision to award CSUK some £59,000 extra to hire additional nurses at weekends. It recognises that the LHB’s prime concern in awarding extra funds was to protect patient safety, but concludes that, under the terms of the contract, the costs should have fallen to CSUK.  In effect, the LHB was paying CSUK additional funds for services CSUK was already contractually obliged to provide.

The report’s recommendations include calls for local health boards to:

• review their procedures to ensure that the full Board approves, or at least ratifies, the award of contracts that carry significant risks;
• monitor activity levels against those set out in their out-of-hours contracts, and establish robust protocols to assess claims for additional funds;
• develop detailed risk management and contingency plans to prevent and manage any failures in service provision.
• There are also recommendations for the Welsh Assembly Government to:
• review the model contract for out-of-hours services and develop provisions for dealing with changes in demand;
• direct local health boards to appropriate guidance on the checks they should make to satisfy themselves that a company has the financial capacity and experience to deliver services.

The Auditor General for Wales, Jeremy Colman, said today:

“It’s clear that Cardiff Local Health Board followed a robust tender process in awarding its GP out-of-hours contract. But my report has identified deficiencies in the LHB’s management of key risks associated with awarding the contract to a new company and its subsequent management of that contract. There are lessons for all local health boards to learn from this report.  My recommendations will help ensure that, in future, the award and management of contracts for out-of-hours GP services will be robust and transparent.”

Notes to Editors:

• This report examines whether the tender and contract letting process was robust and whether the additional payments made to CSUK were justified. CSUK was acquired by Serco plc in March 2005.
• It does not examine the quality of the out-of-hours service. The Auditor General’s proposed value-for-money examination of the General Medical Services contract in Wales, which we plan to start later in 2005, will address quality of service issues.
• This study arose from correspondence sent to the previous Auditor General for Wales, expressing concerns over the awarding and management of the out-of-hours contract.
• The Wales Audit Office (WAO) is independent of government and is responsible for the annual audit of some £19 billion of annual public expenditure.
• The WAO was created on 1st April 2005 in consequence of the Public Audit (Wales) Act, 2004, which expanded the functions of the Auditor General for Wales and enabled the transfer of staffs from the Audit Commission in Wales and National Audit Office in Wales to his employment.

For more information, please contact Rachel Harries (Communications and Media Officer) on 02920-262-675 or email rachel.harries@wao.gov.uk.