PCT Board Meeting
Agenda Item: 10
Date: 25 May 2011
North Somerset
Directors: Jeanette George, Director of Prepared by: Andrew Hughes,
Strategic Development Associate Director of Strategic
Planning
Divestment of community services to North Somerset
Community Partnership (Community Interest Company)
Decision Y Discussion Information
1. Purpose
The purpose of this report is to provide members with information and assurance so that
the Board can formally authorise the divestment of PCT provided community services to
the staff led social enterprise, North Somerset Community Partnership from the 1st October
2011.
2. Summary
2.1 Background & recap
The National Operating Framework 2010/ 20111 published in December 2009, set out a
requirement for PCT’s to agree with SHA’s proposals for the future organisational structure
of all current PCT provided Community Services. The separation of PCT commissioning
from the provision of services was confirmed as a priority in the revised National Operating
Framework2 in June 2010.
A Commissioning Case for Change for the future of PCT provided Community Services
completed at the end of August 2010, approved by the Board and supported by NHS South
West identified that, if the preferred option to establish a North Somerset Integrated Care
Organisation (ICO) between community services and Weston Hospital could not be
achieved, an alternative North Somerset solution should be pursued – a twin track
approach was agreed by the PCT Board.
It was recognised that the best mechanism to deliver a North Somerset solution, providing
1 National Operating Framework for the NHS in England 2010/ 2011: Department of Health, December 2010
2 Revision to The Operating Framework for the NHS in England 2010/11: Department of Health, June 2010
If you need this document in a different format telephone the PCT on 01275 546717
Board Paper
a comprehensive range of community services and well placed to further develop
integrated care with hospital and social care colleagues, was for community services to
undertake a ‘Right to Request’ to form a staff led Social Enterprise. The ‘Right to Request’
policy enables frontline NHS staff employed by Primary Care Trusts to set up a social
enterprise to deliver healthcare services to NHS patients
A Right to Request (wave 3) application was considered and approved by the PCT Board
in September 2010. Formal support was confirmed by the Department of Health &
Strategic Health Authority in October 2010. Milestone 1 was achieved.
At the end of November 2010, the outcome of the North Somerset Healthcare 2012
Strategic Plan project was that it could not confirm the best organisational arrangements
for Weston Hospital. This meant that the establishment of an ICO was not possible within
the timescales requirements for separation of PCT provided community services and the
option to pursue the formation of a staff led social enterprise became the lead option.
As part of the milestone 2 process, an Integrated Business Plan (IBP) for the formation of a
staff led community services social enterprise was completed and submitted to NHS South
West in December 2010. This IBP was considered and supported, subject to due diligence,
commissioner assurance and completion of other necessary action such as staff
consultation, by the PCT at the January 2011 meeting.
As part of this significant organisational change programme, NHS North Somerset
completed a procurement of external independent expertise and appointed Finnamore Ltd
to carry out due diligence and assurance of the IBP to ensure that NHS North Somerset
have discharged their duties as lead commissioners. The findings of this were discussed
by Board members in January 2011.
Extensive staff consultation and stakeholder engagement was also completed, which ran
from November 2010 to February 2011 and findings were presented to Board in March
2011.
The Social Enterprise was legally established in March 2011. North Somerset Community
Partnership is a Community Interest Company limited by shares and a senior leadership
has been recruited including a Chair, Chief Executive Officer and Interim Finance Director.
A community services contract has been agreed. The contract is with NHS North Somerset
Community Services as an Arms Length Trading Organisation, which has met separation
requirements. The contract sets out the service, quality and financial requirements. In
respect of the transition period, to support the contract arrangements, a Memorandum of
Understanding (MoU) has also been completed and agreed with the Senior Leadership
Team of the Social Enterprise, who will also manage the delivery of contract requirements
during the transition phase. This briefly confirms the services, quality and financial targets
to be delivered as set out in the community contract and other essential items for the six
month period.
The PCT Board formally supported the proposal to establish a staff led Social Enterprise
through the ‘Right to Request’ process and agreed that the proposal met milestone 2
requirements at the March 2011 meeting. It was also agreed that final authorisation would
require PCT Board approval.
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Formal confirmation was also received from NHS South West that they were satisfied that
assurance requirements have been met for milestone 2. It was noted that formal SHA
approval would be required for full divestment of services to the Social Enterprise in time
for an October 1st 2011 ‘go live’ date.
2.2 Formal authorisation for the divestment of community services
2.2.1 North Somerset Community Partnership Transition progress
As already stated, the Senior Leadership Team is now in place to take forward
requirements for the planned ‘go live’ date of the 1st October 2011 and project
management arrangements are in place to progress all requirements. The latest Transition
Plan is attached at Appendix 1. Key progress since April 1st 2011 includes the following:
Recruitment of Project Transition Manager now recruited and in post;
Programme of Productivity and Efficiency Projects established and a detailed plan has
been provided;
Commencement of recruitment process for other required posts within the corporate
management team;
Clear process set out for recruitment of remaining Board of Directors;
Agreement with commissioners on due diligence requirements;
Opening dialogue with North Somerset Council to explore the possibility of a joint social
enterprise;
Refinement of business strategy;
Programme of further staff engagement and organisational development.
2.2.2 NHS North Somerset due diligence
In respect of the transition period, formal arrangements are in place with the establishment
of commissioning led Provider Transition Assurance Group. Chaired by the Director of
Strategic Development. This meets on a fortnightly basis to progress requirements, tackle
key issues and manage any risk escalation. It includes the Senior Leadership Team of the
Social Enterprise, key commissioning leads, a Non Executive Director and an internal audit
representative to act as a ‘critical friend’ on process and real time advice and guidance. A
clear due diligence plan is in place and is attached at appendix 2. Most of the outstanding
requirements are technical and practical issues. Commissioners are currently satisfied with
progress being made and are fully confident all requirements will be met. Whilst all areas
will need to be completed the key items include the following:
Business Transfer Agreement;
TUPE arrangements completed;
Care Quality Commission registration;
Main contract and additional reciprocal service agreements in place for goods and
services;
The recruitment of remaining Board of Directors;
Suitable insurances procured;
Pension arrangements in place;
Progress on meeting productivity and efficiency requirements;
Governance arrangements in place;
Banking, tax and financial systems established.
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2.2.3 NHS South West assessment and approval
At the end of April 2011, North Somerset Community Partnership and NHS North
Somerset submitted a number of documents as part of a state of readiness assessment. A
tripartite meeting is also taking place today (25th May 2011). NHS South West officers have
advised they are satisfied with the progress made over the last few months, and the due
diligence process. Subject to formal PCT Board approval to divest community services to
North Somerset Community Partnership, a recommendation will be made to the NHS
South West Board in June 2011 to formally approve the divestment of community services,
on behalf of the Department of Health. It is noted that completion of ongoing due diligence
requirements will need to be notified to officers of NHS South West.
3. Recommendations
The Board is asked to consider the contents of this report and agree the following:
To formally authorise the divestment of services currently provided by North Somerset
Community Services to the staff led Social Enterprise North Somerset Community
Partnership Community Interest Company;
To delegate sign off ongoing due diligence requirements to the designated Senior
Responsible Officer for the divestment of the PCTs provider services;
To note that a recommendation will be made to the Board of NHS South West to
approve the divestment of community services and is being carried out on behalf of the
Department of Health;
To note that the planned ‘go live’ date remains the 1st October 2011.
4. Which Strategic Objectives does this paper help achieve? (tick all relevant
objectives)
Improve quality and earn autonomy by meeting all necessary targets.
Meet our challenges through innovative service redesign to meet identified needs.
Reduce health inequalities and promote health and wellbeing based on an X
understanding of health needs.
Be a competent commissioner and ensure the development of a fit for purpose X
provider service.
Be a good partner to work with – building public, stakeholder and staff confidence. X
5. Which Commissioning Competencies does this paper help achieve? (tick all
relevant competencies)
1. Local Leader of NHS X 2. Collaborates with X 3. Patient and Public X
Partners Engagement
4. Clinical Leadership 5. Assess Needs 6. Prioritisation of
Investment
7. Stimulates Market X 8. Improves Through 9. Procurement and
Innovation Contracting
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10. Performance 11. Efficiency & 12. Governance X
Management Effectiveness of spend
6. Describe the Financial and Legal Implications of this paper:
As previously reported to the Board, for 2011/ 2012, the divestment of community services
to North Somerset Community Partnership will result in a budget transfer to the Social
Enterprise of £19,972,103 recurrent and non recurrent budget transfer. These values will
be updated during the transition as disaggregation is finalised.
In respect of legal implications, staffing, employer & public liability for the prescribed range
of services will transfer to North Somerset Community Partnership
7. Has a Risk Assessment been undertaken? Yes X
No
A risk register is being maintained by North Somerset Community Partnership during the
transition phase and reported through the Provider Transition Assurance Group
8. Has an Equality Impact Assessment been undertaken? Yes X
No
There are no significant issues identified as the focus is on organisational change.
Any future service changes will require specific Impact Assessments
9. Has this paper been consulted upon? Yes X
No
Staff consultation and stakeholder engagement was completed during November 2010 to
February 2011 and there is ongoing staff engagement as part of the organisational
development plan.
10. Describe how will the outcome from this paper be monitored:
The senior leadership team of North Somerset Community Partnership is responsible for
progressing outstanding issues for ‘go live’ in October 2011. Commissioners will continue
to have significant input in terms of the completing their assurance, finalising the business
transfer agreement, completing contract negotiations and ensuring due diligence
requirements are met.
11. Does the author of this paper have any interests to declare? Yes
No X
12. Where can further information be found on this issue?
Specific documents are available from the Director of Strategic Development or Chief
Executive of North Somerset Community Partnership. It should be noted that due to
commercial sensitivity of some items, some will not be available to the general public and
other stakeholders. Additionally, a number of previous documents and plans are available
on the NHS North Somerset website.
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