Cost warning over health social enterprises

Health social enterprises are unlikely to deliver savings, the National Audit Office has warned.

By Jeremy Dunning on June 24, 2011 in Adults, Mental Health, Older people

Health social enterprises are unlikely to deliver savings, the National Audit Office has warned.

Yesterday’s NAO report said the government’s flagship programme was unlikely to deliver savings because the Department of Health did not set out clearly what it wanted to achieve.

Under the Right to Request programme, NHS staff are allowed to leave and set up health social enterprises to deliver services under contract to the primary care trust.

The government recently said it wanted more social workers to work independently of local authorities.

Under a two-year experiment that will start this summer, some council social workers will be transferred to organisations that they will run themselves, to work with service users under contract with those same councils.

The NAO report on health social enterprises said that while they were generally expected to deliver more efficiencies and other benefits than other providers, primary care trusts did not contract for them to deliver savings or any other additional benefits.

However, the NAO said it was too early to assess costs and benefits. Only 20 social enterprises are operational. Most were only launched in April 2011.

Amyas Morse, head of the National Audit Office, said: “There are many risks to be managed if the department is to get value for money from the £900m contracts awarded to social enterprises.

“The department needs to reassess its approach, when contracting with social enterprises, of not requiring efficiencies over and above what would have been achieved if the services had remained within the department.”

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