Serco to lose out-of-hours GP services and hospital management contracts
Outsourcing firm agrees to early termination of NHS Cornwall contract and will pull out of large hospital management.
Serco has agreed to the early termination of its contract for out-of-hours GP services in Cornwall after the company left the county short of doctors.
The embattled outsourcing company also said it would stop running Braintree hospital in Essex as it pulls out of managing GP services and large hospitals. The decision follows a review of Serco’s healthcare operations.
On Thursday the company, along with G4S, was forced to hand over its electronic tagging contracts to rival Capita following fraud allegations over the way they charged the government.
Serco said the Cornwall and Braintree contracts and a loss-making agreement to provide community healthcare in Suffolk would cost it £17m in one-off charges.
The company said: “Serco has agreed with NHS Kernow to bring forward the end of its contract for GP out-of-hours services in Cornwall. Serco’s operation of the contract to date has experienced some operational challenges.”
A Guardian investigation revealed in May that Serco had falsified its performance data for the Cornwall contract when reporting to the local NHS trust so that it appeared to meet targets that it failed to achieve.
It had won the contract with a bid that undercut the local GP co-operative by £1.5m. Whistleblowers later raised the alarm over safety, highlighting an occasion when only one GP had been on duty for the county for the night.
The revelations triggered an inquiry by the parliamentary accounts committee. The committee said Serco’s service was substandard and was highly critical of the company’s treatment of whistleblowers.
Serco’s UK boss, who appeared before the committee, left the company in November, a month after group chief executive Chris Hyman unexpectedly quit.
Problems in Cornwall added to the company’s woes in the UK. In July the government accused it and rival outsourcer G4S of charging to electronically tag offenders who were in fact dead or in prison. The Cabinet Office has barred both companies from bidding for new state contracts while it reviews their operations, and has ordered them to clean up their businesses.
Serco said NHS Kernow would look for another company to provide an “integrated service” before the contract expires in May 2015. The company’s agreement to run Braintree hospital will last until December next year.
Valerie Michie, managing director of Serco’s healthcare business, said: “The services we deliver in Cornwall and Braintree are no longer core to the future delivery of our healthcare strategy.”
A spokeswoman for NHS Kernow said there had been problems with Serco’s service but that it had improved. Serco will continue to run community healthcare services in Suffolk, but the business has not produced the profits it had hoped for.