How will Suffolk Community Healthcare operate after running on £13.7m loss?

Felixstowe Community Hospital is operated under the Suffolk Communty Healthcare contract

Felixstowe Community Hospital is operated under the Suffolk Communty Healthcare contract - Credit: Archant

A multi-million pound budget shortfall has raised fears of hospital closures and job losses to health workers in Suffolk.

Serco, the private company currently running Suffolk Community Healthcare, announced earlier this year it was withdrawing from the service after making losses of £13.7 million on the “onerous” contract in 2014. It will continue with the contract, which provides services to around 650,000 people and includes running community hospitals in Felixstowe, Aldeburgh and Newmarket, until October.

Ipswich and West Suffolk hospitals, together with Norfolk Community Health and Care NHS Trust, confirmed in January their intention to make a joint bid to run the service. The NHS West Suffolk and NHS Ipswich and East Suffolk clinical commissioning groups are expected to announce the successful bidder later this month.

However union leaders have raised doubts about the plan’s financial viability, given Serco’s losses, and fear it may mean closures or job cuts.

UNISON regional organiser Jeff Keighley questioned whether Suffolk could become the first identified failure of the NHS’s internal market funding mechanism.

“The experiment has failed,” he said. “If you’ve got big players saying they cannot run the service with the funding available, how are the potential new bidders going to be reassured that they are going to be able to manage? Who is going to come in to make up the shortfall?”

Serco was awarded the £140 million, three-year contract to run SCH, which also manages district nurses and other services, in 2012. The CCGs had been critical of the company’s failure to meet response targets in its early stages, but said that, overall, they were satisfied with the service, which had improved.

But faced with previous concerns and Serco’s financial losses, Mr Keighley has questioned how the contract can succeed. With CCGs operating on restricted budgets, he raised doubts any increase to the £140m would be possible. And without extra funding, he claims the bidders will be unable to operate without making losses like Serco’s or significant cuts to jobs and services.

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Suffolk UNITE member Jane Basham raised further fears. “There’s every chance that no one can provide the service at the price promised and planned for,” she added. “That could mean a major financial hit for the local NHS trusts to carry on the services.”

The CCGs said their priority was “to ensure local people receive the best level of healthcare service”.

“The robust process to identify a suitable provider is currently underway and will ensure quality, safe community health services continue to be delivered to people in east and west Suffolk,” a spokesman added.

The bidders said they “proposed to provide for community services” but could not comment further.

Serco declined to comment.