I am afraid that the agenda that we have seen over the past few months—one of downgrading options for renewables in order to pursue a gas-based strategy overall

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—is at the heart of this particular issue. We say that there is, and should not be, a contradiction between supporting the continuing secure supply of the gas and oil that we will need for the foreseeable future and the development of renewable energy as a key component of the United Kingdom’s energy mix.

The hon. Members for Selby and Ainsty (Nigel Adams), for Daventry (Chris Heaton-Harris) and for Hertsmere (Oliver Dowden), who talked about subsidies for renewables, should be reminded that all energy is in effect now subsidised in one way or another. Indeed, we have just completed an exercise that subsidises gas, coal and nuclear generators to the tune of £940 million in one year —just to be there, not to produce anything. Perhaps that puts the figures for renewables subsidies that we have heard today into context.

In Committee, we will seek to defend the present status of the Bill without early closure of the renewables obligation, and will remind ourselves that we are talking about an existing subsidy rather than a new one. We will also seek, by means of new clauses, to clarify Britain’s longer-term low-carbon energy targets.

Mr Lilley: Will the hon. Gentleman give way?

Dr Whitehead: I am afraid that I have no time to take interventions.

My right hon. Friend the Member for Doncaster North (Edward Miliband) gave a clear and lucid indication of his wish to go further, and to table amendments in an attempt to underpin those longer-term targets. I detected strong support for that position on the part of the hon. Member for Beverley and Holderness (Graham Stuart).

We have an opportunity to forge, in a spirit of joint endeavour across the House, a key piece of legislation that will provide security and a clear way ahead for energy investors and operators, and for Britain’s energy workforce. My hon. Friends the Members for Aberavon (Stephen Kinnock) and for Ynys Môn (Albert Owen) reminded us of the need for coherence, long-term planning and stability in energy policy. We all know that that clear way ahead will be necessary for the health and prosperity of Britain’s future energy activities, and for clarity about the future direction of our country towards a low-carbon economy. Let us hope that, in Committee, the Government will recognise that compromise and discussion on both sides provide a joint opportunity to make that vision a reality, and that the Committee stage will produce a Bill that truly represents the interests of the whole House and moves us towards a low-carbon economy that will take account of our oil and gas in the context of that wider ambition.

9.48 pm

The Minister of State, Department of Energy and Climate Change (Andrea Leadsom): It is a great pleasure to sum up a debate to which there have been many contributions, to which I shall try to do justice, on subjects ranging from oil and gas and wind to carbon budgets and climate change. It has been fascinating. I am glad that the hon. Members for Wigan (Lisa Nandy) and for Southampton, Test (Dr Whitehead) welcome the work that is being done to give more powers to the Oil and Gas Authority. I have a great deal of respect for, in particular, the hon. Member for Wigan, who takes a

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commercial approach to the issue. I am also glad to note that the Opposition spokesmen are keen for progress to be made in this regard.

I should point out to all Opposition Members that carbon capture and storage is part of the OGA’s mandate. The OGA issues carbon dioxide storage site licences, approves carbon dioxide storage permit applications, and approves the termination of storage site licences. In addition, when there are synergies between the oil and gas and CCS industries, we expect them to be exploited. For example, the OGA is considering the role of CCS in the technology and decommissioning strategies that they are developing. I hope that that gives all Opposition Members some comfort.

Kirsty Blackman (Aberdeen North) (SNP): With the continuing job losses and increasing gloom in Aberdeen, I welcome the shift in rhetoric from Members on the Government Benches. Will the Minister reassure me that the UK Government will do as much as possible to support Aberdeen to continue to be as productive as possible for as long as possible?

Andrea Leadsom: I can assure the hon. Lady that that is exactly what this Energy Bill is all about, and I will come on to the comments made by her hon. Friends. To finish off my remarks to the Opposition Front Benchers, this closure of the onshore wind subsidy is a very clear Conservative manifesto commitment. No ifs and no buts; it is a very clear commitment. The then Minister with responsibility for energy, my right hon. Friend the Member for West Suffolk (Matthew Hancock), told the House of Commons on 6 March 2015:

“We have made it absolutely clear that we will remove onshore wind subsidies in the future, and that the current 10% that is in the pipeline for onshore wind is plenty.”—[Official Report, 6 March 2015; Vol. 593, c. 1227-28.]

This is a clear manifesto commitment.

I am glad that the Members who spoke for the SNP, the hon. Members for Aberdeen South (Callum McCaig) and for Coatbridge, Chryston and Bellshill (Philip Boswell), support the establishment of the OGA. I know that they want to see, as do I and the hon. Member for Aberdeen North (Kirsty Blackman), a thriving industry for home-grown oil and gas that supports the 375,000 jobs that we are looking to sustain. With their help, we will continue to do everything we can to support that, and we hope to be able to count on it. They have raised the issue of a subsidy-free CfD, and I can assure them that my Department is looking very closely at that.

The Government are totally focused on seeing through a long-term plan for secure, clean and affordable energy supplies for generations to come. As we set out in our manifesto, we will cut emissions as cost-effectively as possible while upgrading and expanding both base-load and intermittent sources of energy generation. That means ensuring we continue to support investment in UK energy sources, including supporting the North sea. It also means continuing to support the deployment of new renewables, but we have to achieve this in the most cost-effective way; we have to get the right balance between supporting new technology while then, as costs come down, being tough on subsidies to keep bills as low as possible. However, as we progressively decarbonise

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our economy, we will continue to need oil and gas for many decades to come, as so many Members have pointed out, and it is far better that the jobs and revenue are in the UK, reducing, where possible, our dependence on imports.

The Energy Bill is intended to enact our manifesto commitments in two key ways. The first is by continuing to support the development of North sea oil and gas by establishing the OGA as an independent regulator and steward. A number of Members have spoken very clearly on this area. My right hon. Friend the Member for Wokingham (John Redwood), and my hon. Friends the Members for Warrington South (David Mowat), for Waveney (Peter Aldous), for Wells (James Heappey), for Richmond (Yorks) (Rishi Sunak) and for Boston and Skegness (Matt Warman) all spoke very knowledgably about the vital importance of doing everything we can to sustain the North sea, not just for now but for the long-term future, recognising that we must cut the cost to consumers as far as possible, which means not continuing with subsidies for those technologies that are now well developed. My hon. Friend the Member for South Suffolk (James Cartlidge) specifically pointed out how lower oil prices right now are helping consumers, and I take this opportunity from the Dispatch Box to call on energy companies again to pass on that drop in oil prices wherever possible.

The hon. Member for Brighton, Pavilion (Caroline Lucas) made a somewhat extraordinary contribution. She effectively rejects the Energy Bill in its entirety and seems to want it to be a pick-and-mix Bill that covers absolutely every aspect of energy policy. I want to be very clear: what we are seeking to do is establish the OGA properly and implement our manifesto pledges on onshore wind. I had hoped that, for once, she would be pleased that, combined with the superb result to which my right hon. Friend the Secretary of State contributed in Paris, we are now absolutely focused on decarbonising at the lowest possible price to consumers, with all the implications that that has.

Caroline Lucas: I cannot allow the Minister to keep getting away with telling us that she is committed to reducing prices in a way that helps consumers when she is still locking us into nuclear, with its huge subsidies that ordinary consumers are going to have to pay. Her hypocrisy and double standards on this are absolutely shocking, and if people in here do not know that, the people outside do.

Andrea Leadsom: Well, I don’t know where to start! I completely disagree with the hon. Lady.

We are acting to control the costs of renewable energy by ending new subsidies for onshore wind and providing local people with the final say on new applications. Members who spoke about renewables included my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who gave us a spanking good speech on the importance of keeping costs lower for consumers, and my hon. Friend the Member for Beverley and Holderness (Graham Stuart), who rightly raised the need to deal with intermittency. I can tell him that, since 2012, my Department has invested £18 million in innovative support for energy storage.

The hon. Members for Sunderland Central (Julie Elliott) and for Greenwich and Woolwich (Matthew Pennycook) again criticised the early closure of onshore

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wind subsidies. I find it extraordinary that Labour Members seem to equate the deployment of renewables with decarbonisation. That is simply not the case. They fail to recognise that fuel poverty and endless renewables subsidies go hand in hand. They need to recognise that.

Graham Stuart: The hon. Member for Brighton, Pavilion asked where to start. We need to start by getting rid of the most noxious of the current fuels, which is coal. Does my hon. Friend the Minister agree that if other Governments followed our example in replacing coal with gas and then with other technologies as they develop, it would make a bigger contribution than almost anything else?

Andrea Leadsom: My hon. Friend is absolutely right. We are the first developed country to talk about getting rid of coal and moving to gas, which will be the best thing we can do for decarbonisation in the near term.

My hon. Friend the Member for York Outer (Julian Sturdy) spoke up strongly for the right of communities to decide on the location of wind farms. I want to pay a real personal tribute to my hon. Friend the Member for Daventry (Chris Heaton-Harris), who has done much to support communities and had a big impact on our policy relating to our manifesto commitment on onshore wind. I was glad to hear my hon. Friends the Members for Hertsmere (Oliver Dowden) and for Thornbury and Yate (Luke Hall) highlight the plight of the bill payer as a result of the renewables obligation subsidy. On this we have a clear manifesto commitment to get costs down.

The right hon. Member for Doncaster North (Edward Miliband) is owed a great deal of gratitude from Members across the Chamber for his personal work and commitment to the climate change agenda. He made a proposal for a zero carbon emissions strategy, with the Climate Change Committee deciding on the appropriate date, but as things stand, we are committed to meeting our legally binding commitments for 2050, and that is where our focus lies. I am sorry to disappoint him on that.

The hon. Members for Stalybridge and Hyde (Jonathan Reynolds) and for Aberavon (Stephen Kinnock) criticised the Government for not being green, but I can tell them that, since 2010, we have reduced the UK’s greenhouse gas emissions by 15%, which is the biggest reduction in a single Parliament. We are over-delivering against our first three carbon budgets, and according to the Climate Action Network, the UK is the second best country in the world for tackling climate change, second only to Denmark. This Government have done so much! My hon. Friends the Members for North Dorset (Simon Hoare) and for Bath (Ben Howlett) pointed out that the Opposition did not equate subsidies with fuel poverty, but they need to do so. They need to understand that the more we subsidise technologies, the more we add to fuel poverty.

In finishing, I wish to pay tribute to my hon. Friend the Member for Fareham (Suella Fernandes), who gave a knowledgeable and supportive speech on the importance of supporting both the OGA and our manifesto commitments. I am grateful to all hon. Members for their contributions, and I commend this Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

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Energy Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Energy Bill [Lords]:


(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 9 February 2016.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Charlie Elphicke.)

Question agreed to.

Energy Bill [Lords] (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Energy Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:

(a) expenditure incurred under or by virtue of the Act by the Secretary of State; and

(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Charlie Elphicke..)

Question agreed to.

Energy Bill [Lords] (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Energy Bill [Lords], it is expedient to authorise:

(1) the charging of fees;

(2) the imposition of a levy under the Act;

(3) the imposition of financial penalties under the Act;

(4) the increase of charges in connection with trading schemes; and

(5) the payment of sums into the Consolidated Fund.—(Charlie Elphicke.)

Question agreed to.

Business without Debate

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

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Betting, Gaming and Lotteries

That the draft Legislative Reform (Exempt Lotteries) Order 2016, which was laid before this House on 9 November 2015, be approved.—(Charlie Elphicke.)

Question agreed to.

Business of the House


That at the sitting on Wednesday 20 January, the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents) shall not apply to the Motions in the name of Secretary Theresa May relating to the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2016, the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (England and Wales) (No. 2) Order 2016, the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (Northern Ireland) Order 2016 and the draft Proceeds of Crime Act 2002 (Investigations: Code of Practice) (England and Wales and Northern Ireland) Order 2016 and the Motion in the name of the Solicitor General relating to the draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) (England and Wales and Northern Ireland) Order 2016; the Speaker shall put the Questions necessary to dispose of those Motions not later than three hours after the commencement of proceedings on the first of those Motions; and proceedings on those Motions may continue, though opposed, after the moment of interruption.—(Charlie Elphicke.)

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Cambridgeshire CCG and UnitingCare Partnership

Motion made, and Question proposed, That this House do now adjourn.—(Charlie Elphicke.)

10.1 pm

Daniel Zeichner (Cambridge) (Lab): I thank you, Mr Speaker, for allowing the House the opportunity to consider the extraordinary collapse, after just eight months, of one of the biggest tendering exercises conducted in the NHS: the £800 million contract between UnitingCare Partnership and Cambridgeshire and Peterborough clinical commissioning group.

Two weeks ago, I spent a morning out with an ambulance crew working from the ambulance station on the Addenbrooke’s site outside Cambridge. I saw the NHS at its best: top-quality care, provided quickly; people in pain and discomfort treated with dignity and respect; a swift, seamless transfer into hospital; and fantastic, caring, committed staff, on ambulances and in hospital. It was our NHS at its best and we should be proud of it.

When health leaders in Cambridgeshire said they wanted to create an integrated service for older people that would focus on prevention, it was a worthy aim, albeit polluted by the need for a competitive tender, insisted upon by the Health and Social Care Act 2012. When the contract was finally signed with NHS providers, it should have been the start of a new way to provide care, so what went wrong? That is what I want to quiz the Minister on tonight, because the failure of this contract matters way beyond Cambridgeshire, and it has rightly attracted national attention. A recent editorial from the Health Service Journalsaid:

“When a five year contract of this size and this importance to some of the most vulnerable people in society fails, it is not enough to shrug and walk away. As NHS England develops capitated, outcomes based contracts for national rollout, it is important to understand and explain what has gone wrong in Cambridgeshire so the lessons can benefit the health service as a whole.”

It is right.

This is a long and complicated story, which some of us have followed closely over many years. You will be glad to hear, Mr Speaker, that I will give an abbreviated account, but I must pay tribute to some of the campaigners who spent many, many months at meetings across Cambridgeshire questioning and challenging: my friend and colleague, Huw Jones; Steve Sweeney, then of the GMB; Jo Rust; Tracey Lambert and Martin Booth from Unison; and many, many others. We always knew something was not right and, sadly, we were proved to be correct.

I believe the story really begins back in 2012, when the future of Cambridgeshire Community Services NHS Trust, which had itself only a few years earlier been separated from the predecessor to the CCG, was thrown into doubt when it failed in its bid to become a foundation trust. Under Government guidance at the time, through the Trust Development Authority, trusts that were not foundation trusts faced being wound up. That was a foolish policy and, as so often, it was later rescinded, but given that this was happening when the infamous 2012 Act was under massive discussion, the real possibility was raised that many care staff would be transferred to private providers. That did not happen, because Cambridgeshire County Council, which many staff had originally worked for, took many of them back, but the consequence was a disintegration of services—the very

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opposite of what was needed. Integrated teams were ripped apart—an act of vandalism that set care back. The Trust Development Authority, the body overseeing this early-stage debacle, remains the line of accountability for NHS trusts. Those trusts are now being merged, in their regulatory function if not statutorily, into Monitor, which is yet another executive non-departmental public body of the Department of Health.

It is worth noting in passing that, since the time it was denied foundation trust status, causing the disintegration of care, Cambridgeshire Community Services has gone on to be named as the best community trust to work for by the Health Service Journal, and is now doing very well, albeit by working mainly with others outside Cambridgeshire.

Against that backdrop, and because of the 2012 Act taken through Parliament by the then local MP and Secretary of State for Health, the Cambridgeshire and Peterborough clinical commissioning group, in wanting to move to a new model of outcomes-based care, was forced in 2013 to put health services for older people out to tender. The process attracted national attention and was very controversial locally, mainly because of its focus on trying to attract private providers. Shrouded in commercial confidentiality, rumours abounded. Many organisations expressed interest including Virgin Care, Care UK, Circle, Capita and UnitedHealth and more.

Over many months, campaigners and I sat through numerous CCG board meetings and what were described as public consultation meetings where we were assured that all was well and that the many concerns we raised were unjustified. It was announced that the three final bidders for the contract to lead the services were Care for Life, UnitingCare Partnership and Virgin Care. Eventually, in October 2014, it was announced that the five-year outsourcing contract to run older people’s healthcare and adult community care was to be awarded to the UnitingCare Partnership, which was not a private bidder but an NHS consortium of Cambridgeshire and Peterborough NHS Foundation Trust and Cambridge University Hospitals NHS Foundation Trust. The five-year contract was worth £800 million and covered: urgent care for adults aged 65 and over, including in-patient and A&E services; mental health services for people aged 65 and over; adult community services for people aged 18 and over, including district nursing and rehabilitation services; and health services to support the care of people aged 65 and over. It is one of the biggest contracts the NHS has ever tendered.

The partnership started delivering services last April, and regular updates were issued outlining how the new services would work. We now know that, behind the scenes, much wrangling over costs was going on, but that was withheld from public gaze. Then came the bombshell. After eight months, and just one month of the new system operating fully, a joint statement was issued by Cambridgeshire and Peterborough CCG and UnitingCare. Not much detail was given, other than an assurance that services would continue, that patients should be reassured but also that the provider and the commissioner had agreed that

“the current arrangement is no longer financially sustainable.”

The contracts that had been established were to be honoured by the CCG, and patients and carers were promised that services would go on as usual and would not be disrupted. It was also said that it would try to retain the new model of integrated service delivery.

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Let us briefly review some of the damage. We still do not really know how much the procurement process cost, but on the public side it was certainly millions, and probably at least as much again for private providers working up failed bids—doubtless to be recouped from somewhere else in the NHS later.

Let me turn now to the impact on staff. Back when Cambridgeshire Community Services failed in its bid for foundation status, a transition steering group was established to oversee the future of thousands of its staff. Teams were ripped apart and, with the new contract, more than 2,000 staff were transferred to Cambridgeshire and Peterborough Foundation Trust and Cambridgeshire County Council.

That was a massive task for the Cambridgeshire Community Services Trust, distracting it from other work. There was huge uncertainty and stress for staff over the future of their jobs. Throughout the entire process, across the NHS in Cambridgeshire, senior managers and local health service leaders were spending large amounts of time on all of this. Was it really time well spent, when last year we saw so many major hospitals repeatedly in crisis?

I have said nothing so far about the strategic projects team. What was its role? Many would ask, “Who are they?” To many who follow these things, the STP is, in effect, the pro-privatisation arm of NHS England, and it played a key role throughout this process. Its website tells us that the team specialises in competitive procurement, the re-design of patient pathways via an integrated care model, change management, service reconfiguration and integration, trust development and culture change.

The STP is part of NHS England. We are told by Lord Prior of Brampton, the Minister responsible for NHS productivity, that in its investigation into the collapse of the contract, NHS England will examine the strategic projects team’s role, and will also consider how similar contracts will be managed and assured in future. So it is NHS England that will investigate its own strategic projects team—a hopeless conflict of interest. That is not good enough. We need a genuinely independent and transparent review.

People are right to ask questions about the strategic projects team. Its list of interventions reads like a roll-call of recent NHS disasters: not just this project, but the private hospital saga at Hinchingbrooke in Cambridgeshire, and the failed tendering process for the George Eliot hospital in Warwickshire, among others. Its website leaves one in no doubt about its leading role in the Cambridgeshire older people’s tendering process. It says:

“SPT delivered an open procurement process on behalf of the CCG”.

It delivered—no room for doubt there. On 8 October 2014, when UnitingCare was announced as the preferred bidder, the SPT was again trumpeting its key role. On 12 November, when it was announced that UnitingCare would operate as a limited liability company, the SPT was there again, and it is worth quoting from the press release still on its website to get a sense of just how central it was:

“Andrew Macpherson, Managing Director of the Strategic Projects Team that managed the procurement on behalf of the CCG said: ‘The Strategic Projects Team are once again proud to have supported courageous leadership in the NHS.’”

The SPT may call it courageous; others might describe it rather differently.

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Let us be clear—it is the SPT, very much part of NHS England, that has been calling the shots. On the decision to set up UnitingCare as a limited liability company, it was approved by Monitor, the strategic projects team and NHS England at the time, yet all knew that that meant that there would be no room for flexibility, and no room for losses in years 1 and 2, when the model explicitly expected extra cost at the beginning, in expectation of savings later. Looked at from the outside, it is hard to see how that could ever have worked, so why did Monitor, the special projects team and NHS England give the go-ahead? Did none of them spot the potential VAT problems introduced by a limited liability partnership?

Having given a brief outline, let me come to the further questions that I hope the Minister will be able to help us with. First, on the flurry of investigations being announced, although it is right that individual organisations will want to look at their role, there is a danger not only of duplication but of exactly the kind of fragmentation that has caused such problems already. Given the conflict of interest within NHS England that I have already described, would it not be better to have a genuinely independent review carried out by the National Audit Office—a review in which we could all have confidence?

The Minister should surely be able to tell us about the role played by his Department and by Ministers, at two key moments in particular. When it was clear in October/November 2014 that there was insufficient information on costs to agree a final contract, why was the process not delayed until that had been sorted out? Did Ministers know? What exactly was the rush to achieve implementation for April 2015, coincidentally perhaps just weeks ahead of the general election? And what role did Ministers play in the final decision to end the contract in December 2015? There were clearly detailed discussions going on with NHS England and Monitor about how much was needed to keep the contract running. The figure seems to have been about £10 million, a lot of money, but given that killing the contract may well have cost more, it was certainly worth considering. What was the ministerial involvement at that point? Were Ministers consulted? Who made the decision to let the contract collapse?

Looking forward, which is what matters most, patients have been assured that services will be maintained. That may well be true in the short term, but what next? Will the outcomes model be pursued, just with UnitingCare taken out of the equation? Does the CCG have the capacity, and if it does why did we go through that ludicrous tendering process? This has been a sorry saga. It seems that everyone agrees that our NHS and our care services need to be integrated, but years of fragmentation make it extremely hard to achieve.

This was a well intentioned attempt to deal with the perverse incentives that shackle our health and care services, and we need to find out what went wrong. We have dedicated, hard-working staff who want to provide the best care possible to our citizens. We need to find a way of making it possible for them to do that. In my view that means an end to contractualised market models, and a move to a genuinely integrated public system, an NHS solution based not on competition but on collaboration; an NHS solution that patients desperately need, and that staff, I am sure, would cheer.

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10.15 pm

The Parliamentary Under-Secretary of State for Life Sciences (George Freeman): I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing the debate and thank the Members who are present, including my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald)—I know that he has an interest in the matter—for attending. I also pay tribute to all those working on the frontline in the NHS in East Anglia, particularly at this time of year, when pressures are at their greatest.

As the hon. Gentleman has described, the contract between Cambridgeshire and Peterborough CCG and UnitingCare Partnership has very recently been terminated. I need to say right away that NHS England has launched an investigation into the circumstances surrounding the contract. Its terms of reference are to establish, from a commissioner perspective, the key facts and root causes behind the collapse of the contract in order to draw out any recommendations and lessons to be learned. I understand that the CCG is also undertaking a review, as is right and proper.

We should let the NHS complete that process. I hope that nothing I say today can be taken as an assumption that Ministers have in any way prejudged the outcome of that process. Clearly there are different views about what has happened, and I want to wait for the reports of the reviews before deciding what, if anything, needs to be done, either by the NHS or by the Government. Once the reports are published, Ministers will be briefed on their conclusions. I am happy to invite the hon. Gentleman to that meeting, although I cannot say today exactly when it will take place. I know that he is in regular contact with his local NHS, and I encourage him to keep that up.

The core scope of services in the contract with UnitingCare was acute unplanned hospital care for older people—those 65 and over—older people’s mental health services, older people and adult community services and a range of supporting voluntary sector services. The underlying principle was to create an integrated care pathway between all these services. The UnitingCare service model was designed by local clinicians during the procurement process and had a high degree of local health and social care support. Its detail and assumptions were subsequently ratified by two independent auditors. It was designed to: join up services around the patient and reduce service fragmentation; to focus on better outcomes for patients and carers, rather than activity levels; to invest in out-of-hospital services in order to better address the needs of a rapidly ageing and growing population; and to deliver £170 million of savings to the local health economy by 2020 by reducing inappropriate emergency admissions to hospital and inappropriate A&E attendances.

UnitingCare began introducing those new services with an investment of £5.4 million over the first six months of the financial year. They included a number of important local improvements, such as: care based around neighbourhoods, with 17 neighbourhood teams working closely with GPs; access to specialist services, with neighbourhood teams and the support of four integrated care teams to offer more specialist care; a 24/7 helpline, called OneCall; urgent care and support, with joint emergency teams to assess and treat people most at risk of admission to hospital; health and wellbeing,

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with voluntary organisations working together; a single view of the patient record, called OneView, providing professionals with a summary of all information about a person’s health; and a health analytics service to target interventions at those most at risk of admission.

To achieve those improvements, a contract was needed between the provider and the CCG. The main components of the contract were: a new framework for improving outcomes; a new contracting approach to align incentives in a better way; a five-year contract term; and a new lead provider, UnitingCare. It was therefore a high-value contract; it had a total value of around £800 million. Having taken legal advice, the CCG went to open procurement, using a standard three-stage process—pre-qualification, an invitation to submit outline solutions, and an invitation to submit final solutions. The CCG prospectus set out the CCG budget and the evaluation criteria. It was a contract entered into in good faith. This included submitting bids within the CCG budget. The CCG budget incorporated forecast population growth, an acuity factor, and QIPP—quality, innovation, productivity and prevention—savings for each year.

In 2014, there was in some quarters, as the hon. Gentleman said, concern that the process was “stealth privatisation”. Clearly no one, on any objective criteria, would agree that that was the case; it was merely, as he said, a service reconfiguration placed with a not-for-profit company set up by local health providers. The boards of Cambridge University Hospitals NHS Foundation Trust and Cambridgeshire and Peterborough NHS Foundation Trust held the firm belief that only by introducing radical change led by the NHS would the local health economy under the CCG become viable for patients, staff and the respective trusts across the region. For that reason, they decided to submit a joint bid and, following commercial and legal advice, opted to create a limited liability partnership to fulfil the role of prime vendor, as required by the CCG.

The CUHFT and CPFT consortium was appointed as preferred bidder at the end of September 2014. In October, it formed UnitingCare LLP to hold the contract. The strategic projects team was appointed as procurement adviser to the CCG through a competitive process and its role was to manage the procurement process. The strategic projects team is a specialist unit hosted by the Arden and Greater East Midlands commissioning support unit, which has substantial experience in managing complex procurements. The CCG also appointed legal advisers, Wragge Lawrence Graham, and financial advisers, Deloitte, to support the procurement process.

Much information about the costs of the current services, staffing details and timescales could not be provided by the CCG to UnitingCare until it was at preferred bidder stage. As a result, UnitingCare’s bid was heavily caveated and based on assumptions. To illustrate this point, at the time of preferred bidder award status, there were 71 outstanding clarification questions from the procurement process. The contract signed between the CCG and UnitingCare also included several protection clauses to be utilised in the event of the financial distress of either party. Subsequent to contract signature, additional clauses were agreed that allowed for the rapid exit of the contract in the event of the financial destabilisation of either party. With these protections in place, trust boards, the CCG and Monitor

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allowed the contract to be signed in November 2014 and for the necessary mobilisation activities to facilitate service commencement on 1 April 2015.

There were clear improvements in patient care. For example, in November 2015 emergency admissions for over-65s reduced by just short of 8% compared with the previous year and by 9% when taking into account population growth; admissions of more than two days’ duration for people over the age of 65 reduced by 14%; and A&E attendance reduced by 3.2% when taking into account population growth. However, in December the contract was terminated by mutual agreement—

Lucy Frazer (South East Cambridgeshire) (Con): As my hon. Friend says, there were advantages to this project and it produced good outcomes. If it is a good concept, will the Department of Health support the services that so need to be provided?

George Freeman: My hon. and learned Friend makes an excellent point. The service is currently being continued, albeit by the CCG rather than through the company that was created for the purpose. As she says, the reforms that were put in place were the right reforms. Indeed, they were led by local clinicians and designed with that in mind.

Sir Oliver Heald (North East Hertfordshire) (Con): In Royston we have the Royston NHS and social care hub, which will include beds as well as other services. Does my hon. Friend agree that there is no reason at this stage for people to become anxious that the difficulty with the contract will lead to any change in the quality of services that are planned for the future?

George Freeman: That is right. As both questions have highlighted, the change in the care pathway is being pursued by the CCG and there is no reason for patients—the users of the system—to fear any dramatic change to the service. The remaining issue is the residual issue of how the contract came to be put in place. The dispute between the parties is about their different conceptions of the financial and contractual situation. I do not want to prejudge the investigations, but the service reforms will continue.

The final decision to terminate was taken after extensive discussions between the CCG, UnitingCare, Cambridge University Hospitals NHS Foundation Trust, Cambridge and Peterborough NHS Foundation Trust, NHS England and Monitor. Prior to escalation to NHS England and Monitor, the CCG, CUH and CPFT worked hard to try to reach a resolution locally.

Daniel Zeichner: Could the Minister enlighten me on the role played by Ministers in that final decision? Did they know it was happening? Who ultimately terminated the contract?

George Freeman: As I will come on to say, due process was followed in the correct way. One of the reasons for listing all these acronyms is so that the hon. Gentleman can be reassured that the right bodies carried out their due diligence. I do not believe that there was any reason for Ministers to be concerned at any point until the dispute between the parties became clear. Indeed, the reforms had been generated locally by clinicians

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and an accountable CCG led by clinicians. As the questions I have been asked have illustrated, the reforms were and remain very sensible. This is a better care pathway, with improved outcomes.

The issue is contractual and relates to a dispute between the parties about liabilities in the contract. As I have said, I do not want to prejudge the ongoing investigations, the point of which is to work out what should have been done differently. I can absolutely reassure the hon. Gentleman and the House that we are hungry to learn any lessons from that commissioning experience. We need novel commissioning. We need commissioners around the country to look into different ways of commissioning the reforms to our integration of health and care, and lessons need to be learned when it goes wrong. I emphasise that this was a contract between the parties. As I have said, the Department is looking forward to the reviews and wants to hear the lessons that others can learn.

The CCG has now taken over all relevant contracts with providers that were previously held by UnitingCare, to ensure that there is no service disruption to patients and carers. In addition, the CCG and CPFT, which employ the majority of the affected staff, have worked closely together to ensure that frontline staff are clear that, while the contractual model has now changed, the service model remains in place.

Of course, I agree with hon. Members that it is a matter of extreme concern that the new arrangements lasted barely six months. That is not ideal. We need to

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work out how the parties got it wrong and what mistakes were made. There are questions for the reviews to address. For instance, there is the question of why, given full procurement and assurance of the process, the result fell so far short in practice, along with other associated questions.

To describe modern commissioning as back-door privatisation is wilfully to misrepresent what is going on. These are clinician-led improvements to the care pathways, and I do not believe that most service users would consider it privatisation. We are talking about two public sector organisations coming together to form a company for the purposes of jointly commissioning care pathway innovation put together by clinicians in the local CCG. If Labour considers that privatisation, it has a serious problem, because most people would consider it enlightened commissioning for modern care pathways. This is a contract issue. The parties to the contract did not get it right, and we are keen to understand why and what can be done to make sure it does not happen again. I want those answers as much as the hon. Gentleman, and I repeat my invitation, to him and other hon. Members with an interest, to meet in due course to learn the lessons and make sure that the benefits of commissioning for integration go ahead without the contractual errors that have bedevilled this project.

Question put and agreed to.

10.30 pm

House adjourned.