Issue details

Proposed decision

The proposed decision is to extend the current KCHFT (Kent Community Health Foundation Trust) partnership contract that is due to expire 31st March 2025 (for a period of 12 months to 31st March 2026), to support the work across the Public Health Transformation programme.

Reason for the decision

Public Health are undertaking a comprehensive review of Public Health funded services as part of a transformation programme. The programme of work is complex and many of the contracts expire at the same time. This is because they form part of a partnership with Kent Community Health Foundation Trust (KCHFT).

The proposal is to extend the KCHFT partnership so that the transformation work can continue, in a way that does not de-stabilise, service delivery, workforce and minimises the impact to staff, residents and providers. It also allows time for interdependencies and joint commissioning to be fully considered.

Background

The purpose of the Public Health Transformation programme is to improve future services, with the following aims: 

-       Delivering best value and to spend the Public Health Grant in a way that delivers the biggest impact.

-       Improving services for Kent residents, targeting people who need services the most, with services being informed by evidence, joined up and aligned internally and with other related services.

-       Ensuring that services are fit for the future, sustainable and responsive to need. This includes managing changes in demand, ensuring provider capacity and capability, being insights led, responding to societal changing trends and utilising new technology. Focusing on prevention, reducing health inequalities.

The programme is reviewing twenty-one Public Health funded service areas simultaneously to help explore options for integration, efficiency and maximising impact. Many of the services in the review expire at the same time as they form part of an overarching partnership contract with Kent Community Health Foundation Trust. This includes many mandated services such as health visiting and sexual health. The partnership was put in place in March 2017^[1] and has supported the delivery of a number of shared objectives such as; influencing public health systems, reducing health inequalities, delivering innovation and improving efficiency.

Performance and quality of service delivery during the partnership has been very good, with KCHFT consistently meeting set targets (targets that are regularly reviewed). Many of the services delivered by KCHFT are specialised services.

The recommendation is to put in place a twelve-month extension for the partnership to support the delivery of the transformation programme.

A partnership extension would help to:

• Minimise risk of destabilising the workforce; these are specialist roles and as the end of the contract approaches staff may choose to move organisation. The change of service model and/or supplier needs to be carefully managed.
• Maximise interdependencies – this is a complex programme with many interdependencies and sufficient time is needed to explore and consider these in full. For example, HIV commissioning which is currently part of this service but funded by NHSE (NHS England) and due to transfer to the ICB (NHS Kent and Medway Integrated Care Board).
• Allow time to balance resources of Public Health and Integrated Commissioning staff in KCC across a number of recommissioning programmes.
• Develop comprehensive business cases for alternative and financially costed service models.
• Develop understanding and application of new procurement legislation by taking a stagged approach across the transformation.
• Build further insights (both service user insights and insights with underserved communities who do not currently access services, but may benefit from accessing services)
• Build engagement with existing providers and other providers in the market and help to shape commissioning models.

The partnership extension would help ensure service stability, whilst fully exploring alternative service delivery options and putting new contracts in place. During the transformation work, some services would not use the full twelve-month extension. New, staggered contract start dates would be put in place for services. Some services (substance misuse) are likely to start new contracts in January 2025, because there is little change in delivery and greater clarity on model. Other services may start new contracts later in the year, because they want to align with external commissioning opportunities or because there are opportunities to deliver the services differently by competitive procurement or insourcing.

Any substantive service change or updates required prior to the next partnership agreement decision would be managed via fresh decisions. 

The proposed twelve-month partnership extension would include contract break clauses.

All parties will remain committed to delivering efficiencies and financial savings in the extension year in line with current terms to ensure best value. KCC will closely monitor expenditure alongside performance. 

It is important during the Public Health Transformation programme review, not to de-stabilise the existing supplier, KCHFT. KCHFT delivers a number of services for both KCC and the Kent and Medway ICB (Integrated Care Board), therefore it is important for KCC and the wider health system to ensure this supplier and any potential change, is managed carefully in order to not disrupt KCC’s services and also services provided by KCHFT for the ICB. There is an extremely limited choice of alternative providers in the market.

Options (other options considered but discarded)

The alternative options, considered but disregarded include: -

1)    Option 1 - Re-procuring services and putting in place new contracts for 1^st April 2025. This option has been dis-regarded because there would be little time and officer capacity to ensure services offer the best value and will not allow time to explore alternative service delivery models. With the extension, the service and the workforce will, as a result, not be de-stabilised and service quality will not be compromised.

2)    Option 2 – Contracting outside of the partnership This option is not considered suitable in the short-term as the partnership offers Kent, high quality, stable services within a financial envelop that offers value for money, operating within a partnership. The risk of discontinuing these services in the partnership, at this time, could have an adverse impact on the provider, their workforces and quality.

Supporting KCC’s Strategy

Securing Kent’s Future

This approach aligns with Securing Kent’s Future and the council’s Best Value Statutory responsibility.

Public Health services are preventative services with evidence of good Return on Investment and can help. reduce demand into other KCC services and across the health system.

Extending the two current partnerships for twelve months, ensures that transformation can take place in a way that minimises potential risks (and associated costs) and takes advantage of future service options that will provide the best value for Kent and its residents.  It supports the following objectives: -

Objective 4 – Further transforming the operating model of the Council

The transformation programme offers the opportunity to review Public Health services and to ensure services are efficient, offer best value and are sustainable.

Framing Kent’s Future
The Transformation Programme aligns with KCC’s ‘Framing Kent’s Future’ and in particular: -

Levelling up Kent – Public Health services will remain focused on reducing health inequalities across the county and where needed most.

New models of Care and Support – the Public Health transformation programme will review existing services and ensure they are efficient and sustainable.

The transformation programme also supports the NHS Kent and Medway  Integrated Care Board.

Procurement legislation

Integrated Commissioning have sought internal and external legal advice on the matter of extending the partnership due to the new and untested nature of the new PSR procurement regulations. The advice received is detailed below.

On the basis that the main subject matter of the KCHFT agreement is healthcare services, and providing that the agreement was entered into pursuant to regulation 12(7) of the Public Contracts Regulations 2015 (PCR), the agreement falls to be treated as an agreement for healthcare services for the purposes of the Health Care Services (Provider Selection Regime) Regulations 2023 (“PSR”).

The PSR regulations provide a few grounds for making a contract modification without having to follow a new PSR procurement process. Depending on the confirmation of the contract values involved, Regulation 13(1)(d) of the PSR provides a ground to rely upon for the agreement to be extended provided that the terms of the extension would not render the contract materially different in character and the cumulative change in the lifetime value of the contract since it was entered into or concluded would be less than 25% of the lifetime value of the original contract when it was entered into or concluded.

It should be noted that if relying upon this ground, the Council must submit a notice of the modification for publication on the UK e-notification service in relation to the agreement, within 30 days of the modification as the extension is worth more than £500,000.