Professional Services Business Case Approval Form
The functions of NHS Employers were originally part of DHSC. In 2004, as part of moves
to reduce Departmental headcount, they were divided and formed into a separate
service under a contract via single tender with the NHS Confederation. The NHS
Confederation is a membership organisation that brings together, supports and speaks
for the whole healthcare system in England, Wales and Northern Ireland. They are
predominantly funded through membership fees and the contract with DHSC and their
subsidiary, NHS Employers. The NHS Employers contract makes up a large proportion of
NHS Confederation’s income. In 2009, there was an unsuccessful attempt to place NHS
Employers on a self-funding basis through a membership system and subsequently DHSC
contracted with them via Single Tender again in 2010. Since 2013, the contract has been
renewed annually on a rolling basis.
The Commercial Implementation Unit (CIU) have recently completed a commercial
review of the contract (the Commercial and Contract Review Report can be found in
Annex A). The review was recommended by the Financial Approval Panel (FAP) when it
last approved the contract in 22/23. The review covered the history of the contract, the
DHSC policy need, the commercial and financial arrangements and the legal underpinning
of the contract. It highlighted concerns with the current contract model and set out next
steps in order to achieve a more commercially sustainable model.
Reason for Fol owing the review is has been agreed that we will consider whether there is a more
Procurement appropriate alternative model for this service provision and as a first step, CIU have
Route &
produced a high-level options appraisal (can be found in
Annex B) which has set out
Procurement different options for the future of the contract. In the coming months, we will continue
Strategy
working with CIU to determine the options we would like to explore in more detail so
that we can establish a longer – term commercial model which exhibits best commercial
practice. In order to put the ultimate solution in place, our initial estimate is that we will
need around two years. The next phase would be to commission CIU shortly to explore in
greater detail the possible options for the future of the contract. This work could take up
to six months depending on resource and complexity of the work. There is also some
handling around the right time for this work to commence so as not to disrupt NHS
Employer’s work on managing the response to industrial action. Once we receive
approval to implement an option, this could take up to 12 months (depending on the
option that is selected). We will aim to provide you with specific timelines as soon as
possible.
During the CIU’s commercial review of the contract, legal advice was sought from GLD
regarding risks associated with ‘rolling over’ for another year.
redacted
here
under
Section
42
The contract price is agreed annually. Although we have not conducted a bench-marking
exercise, we believe that we get many intangible benefits on top of the services provided
by NHS Employers. NHS Employers are a non-profit organisation therefore do not make
any profit from the delivery of the contract – any underspends would go into a reserve
which NHS Employers would use as a buffer in case their costs increase. Throughout the
years, the supplier has found efficiencies which have enabled a decrease in the contract
price whilst delivering the same services. From 2010 to 2019 the contract price has
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Professional Services Business Case Approval Form
three Contract Years, the Parties hereby acknowledge and agree that the aggregate total
of the price reduction shal not be more than twenty percent (20%) of the Contract Price
which was applicable in Contract Year 12 (NB Contract Year 12 is 2021/22)’. There was no
reduction in Contract Year 13.
Government
Consulting
Hub
N/A
Engagement
?
Use of Risk
Register
Please refer to the risk register which can be found in
Annex C.
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The annual work programmes set out the service provisions for each year. These are
determined prior to the commencement of each contractual year following conversations
between the DHSC’s work programme commissioners and NHS Employers. NHS England
and Health Education England are given an opportunity to provide input (where
necessary) in order to support alignment and avoid duplication of work.
redacted
here
under
Section 35
How have
you
identified
the business
need and
desired
outcome?
The NHS Confederation’s members cover the full range of organisations that plan,
commission and provide NHS services in England, Wales and Northern Ireland such as
acute, community, mental health and ambulance service trusts and foundation trusts.
The latest NHS Confederation conference in June 2022 was attended by over 6,200+
across two days, the majority of whom are leaders and managers with real ability to lead
and drive change in health and social care.
From a policy perspective, the contract delivers on all of our objectives and serves the
purposes of the Department. The performance of NHS Employers has been consistently
high – for instance, 100% of their KPIs were met in Q2 22/23. The work that NHS
Employers deliver is of real benefit to employers in the NHS. For example, they have
helped employers with how they can support staff with the chal enges presented by the
rising cost of living – they produced resources, shared examples of good practice in this
area and facilitated discussions between employers at their reward and recognition
network. They respond to changing priorities with flexibility, have strong expertise and
hold unique relationships with stakeholders across the system.
What DHSC
or ALB
Through their work programmes, NHS Employers directly support the delivery of one of
objectives
SofS’s priorities, Workforce.
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Professional Services Business Case Approval Form
does this
request
The 11 annually agreed work programmes provide NHS Employers with a framework to
support?
maintain relationships and credibility within the system, so that it is well placed to deliver
(Spend
departmental priorities. The 11 work programmes cover four broad areas briefly
Justification) summarised below:
•
Employment Relations: Includes leading national negotiations on behalf of
employers on pay, pensions and contract reform for medical and non-medical NHS
staff, including supporting introduction of changes. It provides best practice guidance
and supports the development of national policy through representing the views of
employers in the NHS.
•
Development: Acts as the delivery arm for national priorities relating to the NHS
workforce, including supporting capacity/retention initiatives. This includes the
health and wel being agenda, equality and diversity and the needs of employers in
relation to national policy and regulation.
•
Communications: Developing materials and approaches which disseminate
information to employers and delivering campaigns
.
•
Engagement: Supporting regional networks for employers that help share best
practice and support partnership working with trades unions. This includes the work
of the nationally recognised
Social Partnership Forum.
NHS Employers currently deliver 11 Work Programmes under the contract covering the
What
following areas: Employment Relations, Professional Standards, Workforce Supply:
outputs or Education, Redesign, and Skil s, Workforce Supply – International and Domestic
specific
Recruitment, Pensions and Reward, National Engagement Service, Social Partnership
deliverables Forum, Equality Diversity and Inclusion, Medical Pay and Workforce, Communications
are required, and Staff Experience & People Performance Management Toolkit. The outputs and
and how do deliverables are detailed in each of the Work Programmes.
they support
the overal A detailed overview of the 22/23 work programmes can be found in
Annex D. The work
objectives? programmes set out all the deliverables in detail - we do not have the work programmes
for 23/24 yet, however, the 22/23 deliverables are broadly similar to the ones that will be
a
greed for 23/24.
What skil s
are required NHS Employers employ approximately
directly associated
to deliver
with delivery of the contract. Staff are experienced in working directly with NHS
these
organisations and employ skills in negotiation, managing relationships and programme
outputs or m
anagement, amongst many others.
deliverables?
What
As mentioned above, in the coming months, we will continue working with CIU to
workforce
determine the options we would like to explore in more detail so that we can establish a
planning
longer – term commercial model which exhibits best commercial practice. If the contract
efforts have is terminated, one of the options would be to insource the services provided by NHS
taken place? Employers which would increase the Departmental headcount.
The contract contains a clause requiring 12 months’ notice of termination which means
Exit Terms
we are legally obligated to continue with the contract for the next 12 months at a
minimum. In case of termination, it is worth noting that the Department holds
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Professional Services Business Case Approval Form
redundancy liability for some employees who were moved from the Department to NHS
Employers when the latter was formed, and remain in the employment of NHS
Employers. A list obtained in November 2021 details 11 employees which DHSC is liable
for. The cost of this liability was costed by NHS Employers in November 2021 as
approximately £650,656.
Clause 29 of the contract would apply on expiration or termination of the contract. In
summary:
• There is a handover process where the Contractor shall provide such assistance
as the Authority may reasonably require to affect a full and orderly transfer of
the Services to the Authority or to a third party or new provider or providers of
all or any of the Services, as nominated by the Authority
• The Contractor shall: (a) assign any or all software licences or other licences or
agreements that are used exclusively or primarily in the provision of the Services;
and (b) license or sub-contract all other software licences or other licences or
agreements that are used in the provision of the Services to the Recipient
• At expiration or termination of the Contract the Contractor shall handover all
Issued Property how so ever generated under the Contract
• The Contractor shal be responsible for ensuring that any computerised filing,
recording, documenting and planning data utilised under the Contract is
transferred or licensed free of any charges to the Authority or person or persons
designated by the Authority to facilitate a smooth hand-over of work at expiry or
termination of the Contract
• The Contractor shal in connection with the expiration or other termination of the
Contract or any reduction in the Services on request provide full details of all
employees who are engaged to any extent in the provision of the Services or the
relevant part of them to the Authority and to any other contractor or contractors
who may become providers of all or any part of the Services.
Planned
knowledge No plans have been made yet as this depends on what the future of the contract is.
transfer
As mentioned, the longer – term plan is to find an arrangement for the future of the
Measures
contract which exhibits best commercial practice. Given the long – standing nature of the
taken to
contract, plans to reduce our dependency will depend on the future arrangement that
prevent
wil be put in place. In terms of reducing NHS Employers’ dependency on DHSC funding,
dependency we have had discussions with them on how they could generate more income. The
options have been quite limited during the pandemic period, however, we will continue
these conversations with them. We understand that they have managed to secure a few
small contracts with other organisations that generate some income.
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