Central London Clinical Commissioning Group Governing Body Meeting 13 August 2014 CONTRACT AWARD - CARE PROVIDER PROCUREMENT OF SPECIALIST HOUSING FOR OLDER PEOPLE IN WESTMINSTER (SHSOP) 1. Executive Summary 1.1. The Specialist Housing Strategy for Older People (SHSOP) is an ambitious and exciting Programme to transform current care provision for Older People to meet the changing needs of this client group and address anticipated future demand. 1.2. SHSOP is a joint programme between Westminster City Council (WCC), NHS Central London Clinical Commissioning Group (CLCCG) and NHS West London Clinical Commissioning Group (WLCCG). 1.3. The Programme includes two component parts, a) Procurement of a new Care Service Provider (CSP) and b) proposals to redevelop nursing and residential care homes in Westminster to provide improved, modern, state of the art facilities that are linked in with local communities and amenities and enable flexible specialist care services for older people that better meets the future needs for this client group. 1.4. This report presents the outcome of the Care Service Provider, (CSP), competitive dialogue procurement which forms one project within the Specialist Housing Strategy for Older People (SHSOP) Programme 1.5. The approval of this report will allow a contract to be awarded to the preferred provider for care provision. 1.6. This procurement is in line with the Westminster Joint Specialist Housing Strategy for Older People (April 2013) and relates to a new Care Service Provider in the following six homes: Carlton Dene (WCC Residential Care) Westmead (WCC Residential Care) Athlone House (Westminster NHS Nursing Care) Garside House (Westminster NHS Nursing Care) Butterworth Centre (Westminster NHS Nursing Care) Princess Louise Kensington (Kensington & Chelsea NHS Nursing Care) In view of the high value of this contract this report is also being submitted to the Cabinet Member of Finance, Corporate and Customer Services. 1
2. Recommendations 2.1 Subject to the confirmation of the Building Leases and Facilities Management arrangements and budgetary responsibilities being in place the Central London Clinical Commissioning Group is being asked to approve the award of a contract for eight years with provision for extensions up to a maximum of a further eight years, to the preferred bidder for the provision of care services in: Carlton Dene (WCC Residential Care) Westmead (WCC Residential Care) Athlone House (Westminster NHS Nursing Care) Garside House (Westminster NHS Nursing Care) Butterworth Centre (Westminster NHS Nursing Care) Princess Louise Kensington (Kensington & Chelsea NHS Nursing Care) 2.2 Post redevelopment it is envisaged that, residential, nursing and extra care will, where possible, be on one site or close by so residents do not need to move should their care needs change. This ambition will allow for continuity of care and lessen any otherwise potential disruption to residents. The contract will offer a flexi model of care for reconfigured services on such sites. The redevelopment phase is likely to include development of new locations, closure of old facilities and/or investment and improvement in existing facilities. 3. Reasons for Decision 3.1 The overall Specialist Housing Strategy for Older People identified that the number of older people is expected to rise considerably over the next two decades. Although the rise experienced locally may not be as substantial as the rise nationally, it will nevertheless have a dramatic impact on demand for services. Conditions such as dementia, primarily prevalent among very old populations, will become increasingly commonplace 3.2 The Council and the NHS agreed that the current service provision has to change as it no longer meets the present or anticipated needs of older residents. For example care provision that places residents at the heart of services offering person centred care, choice and control to support happy and healthier lives and care that better aligns with the Council and NHS local strategies for residents. In addition the existing care homes are old and need to be updated to meet today s environmental and care standards, more provision is needed for people with dementia, and there is an uneven provision with more care homes being in North Westminster. 3.3 The strategy is driving forward an ambitious SHSOP programme and the business case to; meet the anticipated demand for, care provision for older people in Westminster, provide services to meet changing and often complex care needs and deliver savings to both West and Central London CCGs and WCC over the lifetime of the contract. The overall forecasts are for an increase in nursing/nhs Continuing Health Care provision and a decrease in residential care which will be replaced with an increase in extra care 2
supported accommodation. These forecasts are based on assumptions relating to population change, funding assumptions and a care framework which is likely to change over the contract period. The increase in nursing accommodation and continuing care is likely to be a common feature of future demand for care. 3.4 The business case that the Council and NHS are working to sets out proposals to commission a single provider to manage the services in five existing care homes within the borough. This includes two residential care homes (Carlton Dene and Westmead) and three NHS Continuing Care Homes (Athlone House, Garside House and Butterworth Centre -a dedicated Dementia Unit) and one care home in the Royal Borough of Kensington and Chelsea (Princess Louise Kensington). The objectives identified in the business case will be achieved across the CSP procurement and the redevelopment phase of the programme: i. Continuity of care for current and future resident. This will be achieved through the contract award which will bring together a number of care homes and care pathways into a single integrated model of care. ii. Management of voids and bed space to reduce the number of spot purchases commissioned out of borough. This will be covered in the redevelopment phase of the programme. iii. Commissioning integrated services across health and social care. This will be achieved through the contract award which will bring together services from across health and social care. This joint procurement is itself an example of integrated services. iv. Provision of dual registered care homes that would provide services for people who meet local authority and NHS continuing care eligibility criteria. This will enable residents to access different types of care under one roof so that people don t have to move as their needs change This will be covered in the redevelopment phase of the programme. v. Support the delivery of state of the art care facilities, with flexibility to meet growing demand and changing needs This will be covered in the redevelopment phase of the programme. vi. Identification of a service provider to work with the SHSOP programme team during the re-development phase of the programme using a partnership approach 3
This procurement process and contract award will achieve this objective as the provider has already demonstrated a commitment to be a key stakeholder in the redevelopment phase. vii. Commissioning of person centred and flexible care provision that can be used to deliver outcome focused personalised care for residents in line with a robust specification Contract award will achieve this objective as we developed a new and detailed outcome focussed specification for services with additional quality measures. viii. The provision of more dementia care beds to meet increased demand once services are re-configured This will be covered in the redevelopment phase of the programme. ix. Medium to long term revenue savings for the Council and NHS. Contract award will achieve this objective. 3.5 The Procurement followed a comprehensive procurement process that ensured bids met both NHS and WCC requirements for high quality person centred care and value for money. This contract award will achieve the objectives as stated above and is an important first step in the SHSOP programme to delivering enhanced services for service users in the six homes 3.6 The SHSOP programme includes the following redevelopment proposals: redevelop/modernise five existing care homes within the borough which includes two residential care homes, Carlton Dene and Westmead and three NHS Continuing Care Homes, Athlone House, Garside House and the Butterworth Centre (a dedicated Dementia Unit); build two new care homes; build new extra care supported accommodation; build a brand new rehabilitation unit within the redevelopment agenda subject to confirmation of strategic requirements. 4. Background and Policy Context 4.1 The older people population in Westminster is expected to continue to rise in the future and the numbers of people over 85 will also increase. This is consistent with the number of people with dementia, which is expected to double during the period 2010 to 2020. This programme is in line with the Joint Commissioning Strategy and has been endorsed by both Clinical Commissioning Groups (CCGs) - NHS West London CCG and NHS Central London CCG. 4
4.2 Current Council and NHS provision will not meet projected demand for the health and social care needs of older people in Westminster as outlined in the strategy. 4.3 Current and future service provision is required to align with the Council s Better City, Better Lives five year plan for residents to have longer, healthier independent lives where everyone is empowered to play as full a role in society as possible ; and the CCGs strategic goals in their Better Care, Closer to Home strategy for coordinated, high quality out of hospital care. These requirements were core to and, embedded within, the specification for the procurement. 4.4 The aims of the Council s and NHS proposals are to enhance the type of care provided to meet people s changing needs and provide the best quality care homes and extra care housing within an inner city in the country. There will be an increase in suitable housing for older people in Westminster to specifically provide more nursing care for people with dementia and less residential care. The new care homes are to be built to a very high standard. 4.5 The contract to be awarded will cover the provision of residential care, (currently provided by Westminster City Council) and, nursing care, (funded by both the Council and NHS and NHS Continuing Health Care, funded and commissioned by NHS CLCCG and WLCCG and provided by Central London Community Healthcare NHS Trust (CLCH) and Central North West London NHS Foundation Trust, (CNWL)). 4.6 The procurement strategy initially explored whether to combine the tender for the redevelopment and care provision as one bidding process. A decision was reached to separate the service provider re-commissioning from the redevelopment phase. This was to ensure an experienced care service provider was in place to work in close partnership with the successful redeveloper to design specifications to deliver, environmentally sound, well designed facilities for residents to live and staff to work in that promote excellent standards of living care. 4.7 Work on the redevelopment phase of the programme is continuing and a separate procurement process to identify redevelopers/construction companies to undertake the physical works will be undertaken. 5 Procurement Process 5.1 Throughout the procurement process an emphasis has been placed on quality. Ensuring improvements to service quality is demonstrated throughout the life of the contract (in both pre and post redevelopment phases), 5.2 The Preferred Bidder s service delivery plans, submitted as part of their bid, impressively reflected their philosophy of holistic person centred care to enhance the quality of lives of residents. They demonstrated a real understanding of the range and type of care needs of older people and how they would be met. They showed a strong commitment 5
to placing residents at the heart of the service including how residents would be engaged and involved in the home and shaping the care they receive and its delivery. Other key areas were how they supported and valued the importance of resident s involvement in meaningful activities, hobbies and interests both within the home and externally in the wider community including intergenerational opportunities. They demonstrated how they would foster links with the local community so residents can fulfil personal interests, interact socially with others and lead happier, normal everyday lives. They also showed how they value, develop and support staff to promote quality care provision through their induction and staff training programmes. 5.3 Further quality improvements will continue to be sought for the duration of the contract, through partnership working between the Council, NHS colleagues and the Provider to: adapt service models and design facilities to maintain a high quality of service, create a flexible service provision across health and social care to better meet the needs of older people and drive financial and service efficiencies. Gate 1 Procurement Strategy 5.5 Following early market engagement a Competitive Dialogue process was followed. Competitive Dialogue is an iterative process where bidders develop their tenders over a number of stages before submitting a final tender. There were five main stages to the procurement: Stage 1 Pre-Qualification Questionnaire, (PQQ), Stage 2 Invitation to Submit Detailed Solutions, (ISDS) Stage 3 Invitation to Submit Final Tenders, (ISFT) Stage 4 Invitation to Submit Revised Solutions (ISRS) Stage 5 Preferred Bidder (PB) 5.6 Subject to the recommendations of this report being agreed, the procurement will then move into mobilisation and on to contract start. 5.7 Early market engagement with seven organisations was undertaken in January 2013 which identified significant interest from the care market and provided information to support the approach. This led to an Official Journal of the European Union (OJEU) notice published on 14 th May 2013 and a Bidders Event on the 21 st May 2013. This was to stimulate further interest in the opportunity and to gauge market views on the procurement process. However six out of the initial eight suppliers did not pass the financial standing tests and four of these were carrying unacceptable levels of debt so the procurement was disbanded. This led to a further OJEU notice published 27 th June 2013 with a deadline for submission of 29 th July 2013, in response to which six PQQs were received. Evaluation of these PQQs took place between 30 th July and 6 th August 2013. From this the five highest scoring bidders were taken forward. 6
5.8 The PQQ results were issued on 15th August 2013 and Invitations to Submit Detailed Solutions (ISDS) were issued on 16th September 2013. In that period a provider withdrew from the process. 5.9 Detailed Solutions dialogue took place between 16 th September and 10 th October 2013 and addressed contract and commercials, pricing, service delivery and future design of sites. In addition, site visits to bidders existing services were undertaken by representatives from the SHSOP Service User Involvement Group, who were also involved in the development of the scope of services, (outcome based specification). Another provider withdrew from the tender process on 8 th October 2013 leaving three bidders in the process. Detailed Solutions dialogue closed on 14 th October 2013 and bids were received by the deadline of 30 th October 2013. Evaluation of the bids was completed on 13 th November 2013. All three bidders met the requirement to proceed to Stage 3 Final Tender. 5.10 Final Tender dialogue took place between 18 th November to 21 st February 2014 and the bidders visited the six homes. A provider withdrew from the tender process during this stage and the procurement continued with the two remaining Bidders. Final Tender dialogue was closed on 24 th February 2014 and two bids were submitted by the deadline of 7 th March 2014. Evaluation revealed that neither bidder had submitted an affordable solution. Options were considered and the Cabinet Member for Adult Social Care within the Council and Public Health agreed to a further stage of dialogue with both bidders focusing on the commercial aspects of the bid. The project timetable was revised to take this into account. 5.11 This fourth stage, Refined Solutions, took place between 28 th April 2014 and 9 th May 2014 and two bids were received on May 16th. For both bids, only the financial aspects changed from the Final Tender stage; there were no changes to either the service delivery plans including staffing models/levels and quality aspects nor the project agreement (legal position). 5.12 Evaluation revealed that only one of the bids was affordable and would yield savings for both the NHS and for WCC across the initial eight year contract period. One of the bidders raised a concern about their scores at Final Tender stage. The Refined Solution phase provided an opportunity to revisit this and steps were taken to resolve their concerns. 5.13 The SHSOP Finance subgroup which met on 2 June 2014 reviewed and signed off; The budget (financial envelope) for the services, so that both WCC and the CCGs were in full agreement The financial evaluation outcome for the tender price offered by the bidders, and That one of the bids was deemed affordable for both the NHS and WCC. 5.14 Following WCC and NHS approval of the outcome of Refined Solution phase the procurement progressed to Preferred Bidder on the 13th June 2014. This involved 7
working with the preferred tenderer to clarify their bid and reconcile the working assumptions during the tender process, it is an on-going process and will continue up to contract award. 5.15 Final contract award will be dependent on leases and facilities management arrangements being in place and budgetary responsibilities assigned accordingly including TUPE arrangements for those staff employed by NHS Property Services as necessary. 5.16 An internal project implementation plan will be developed to cover all the activities required from the SHSOP team and Tri-Borough, Corporate and Health departments to ensure a successful transition from contract award to new care service provider commencement. 6. Options and Analysis 6.1 The options are to award a contract to the Preferred Bidder or close/abandon the procurement. Awarding a contract is the preferable option as the objectives of the business case for procurement a new care service provider can be achieved and support the wider objectives of the redevelopment phase of the programme; Medium to long term revenue savings for the Council and NHS Provision of person centred, holistic and flexible care provision to deliver outcome focused personalised care for residents Provision of integrated services across health and social care Identification of a service provider to work with the SHSOP programme during the re-development phase of the project using a partnership approach Continuity of care for residents. 6.2 The implications of not awarding a contract to the Preferred Bidder are that the business case objectives indicated above will not be realised and there will be financial risks with the incumbent providers continuing service provision. 7 Legal Implications 7.1 The Council has a legal duty under section 21 of the National Assistance Act 1948 to provide residential accommodation for persons who by reason of age, infirmity or any other circumstances are in need of care and attention which is not otherwise available to them. The procurement of a care services provider by the Council was undertaken under this power. 7.2 The Council has carefully considered how the Human Rights Act 1998 and the Equality Act 2010 impact on those affected by this procurement including the residents, people that are likely to need residential and care in the future and staff currently providing the service. The outcome of these considerations has been taken into account in the structure of the procurement and the outcome based specifications for the services required. 8
7.3 The procurement was carried out using the competitive dialogue procedure as set out in the Public Contracts Regulations 2006. This enabled the Council to conduct dialogue meetings with the bidders to enable them to set out their ideas and to gain a steer from the Council as to whether or not such ideas would be acceptable. As such, the Council was able to de-risk the issues throughout the procedure and ensure that each bidder was going to propose, in their final tender, a solution that would meet the Council s specification. 7.4 The contract is a services-based project agreement that brings together standard NHS requirements for nursing homes with a robust set of terms and conditions. These include provisions governing, monitoring, audit and performance measures as well as a suite of remedies in case of breaches by the Service Provider. 7.5 The contract itself was drafted by Sharpe Pritchard with the payment and performance suite being drafted by the Council s Project Team. The contract deals with the Services that are required from now until the re-development. Any changes that are required to reflect revisions to the Services that are required as and when the re-development takes place will be dealt with through the Change Control Procedure (Schedule 13). 7.6 The contract draws on the care framework in the standard NHS contract for residential care but ensures that robust terms and conditions underpin it. The contract which has been agreed with the Preferred Bidder did not vary in many respects from the model project agreement that the Council asked bidders to mark up. 7.7 The authorised officer for signature of the contract is the Head of Legal and Democratic Services due to the value of the contract offering. 8. Staffing Implications 8.1 WCC Staffing 8.1.1 The Council considers that TUPE is likely to apply in respect of employees currently engaged in the provision of the services. The successful bidder has been instructed to seek independent professional advice on the effect of the TUPE Regulations on their Refined Solution and the Contract. The Council to date has given no assurances, warranties or assumptions as to the effect of TUPE on the Contract or otherwise. The CSP contract as drafted gives the transferring employees the right to enforce the term of the contract that guarantees pension protection. 8.1.2 The successful bidder will be required to offer those staff who transfer under TUPE from the Council s employment and are members of the Local Government Pension Scheme, (LGPS) to continue to do so or offer a pension that is equivalent to or better than the LGPS scheme. 8.1.3 Anonymised information regarding TUPE has been issued to bidders for bid price purposes only at this stage. 9
8.2 NHS Staffing 8.2.1 The preferred bidder is expected to apply for Directed Employer status on contract award to allow those NHS employed staff who TUPE to the new Provider to remain within the NHS Pension Scheme. 9 Staff Consultation 9.1 The incumbent Providers Human Resources departments have been involved in the release of TUPE information and are aware of the implications for staff currently in their employment. Consultation activities will be discussed with Human Resources and will be included in the successful Providers Implementation plan to be developed once the successful bidder is awarded the contract. 9.2 Informal staff engagement and consultation has taken place during the procurement. Current provider facilitated staff and union meetings have been held across all services affected by the SHSOP programme. Team members and commissioners have frequently attended these meetings. Frequently Asked Questions have been issued at regular intervals responding to any questions raised and updates on the Procurement have been provided as necessary throughout the process. 9.3 In line with TUPE regulations a full and effective information and formal consultation process will take place with the affected staff and their representatives. The incoming provider is required to inform WCC as to what if any measures it will take post transfer in respect of transferred staff in order that an effective formal consultation process may take place. 9.4 The incumbent Providers Human Resources departments will support staff during the formal consultation process and the transfer to the new provider. 10. Consultation 10.1 Residents of the affected care homes and their representatives were informed in writing of the decision to procure a new CSP in April 2013 and updates have been provided throughout the procurement process at regular intervals. 10.2 The Advocacy Project led on resident involvement to help shape the Care Service Specification. They visited all the affected care homes and engaged on a group and one to one basis with those residents who were willing and able to discuss what aspects of care were important to them. The outputs from these sessions helped shape the Care Service Specification for the procurement process. 10.3 During the period May 2013 and September 2013 a User involvement group was established which included residents relatives/next of kin of the affected care homes and representatives from other organisations i.e. Healthwatch. The group met on four occasions to identify; what works well in care homes, what works less well, what should 10
future care look like and quality outcomes for residents. This work also helped shape the Care Service Specification for the procurement process. 10.4 The SHSOP Programme redevelopment proposals as outlined in the Westminster Joint Specialist Housing Strategy for Older People were subject to a twelve week public consultation during the period September 2012 to December 2012 and secured a 75% approval rating. 10.5 This report has being reviewed by the panels/ meetings as indicated in table 1 below. Table 1 Governance review/approvals Gate 1 Review 15/02/2013 Councillor and Chief Executive Review 07/07/14 West London CCG Finance and Performance Group Central London CCG Finance and Performance Group WCC Peer review/contracts & Commissioning Board (CoCo) West London CCG Operation Group (delegated authority granted by Governing Body 1 st July 2014 ) 22/07/14 23/07/14 30/07/14 12/08/14 Central London CCG Governing Body 13/08/14 Gate 2 Review 14/08/14 Executive Decision 26/08/14 11 Equality Implications 11.1 An Equality Impact Assessment (EIA) has been completed. 11.2 The EIA has demonstrated that this procurement has a low impact with regard to the Public Sector Equality duty and a positive impact with regard to any protected characteristics. The findings of a needs assessment carried out in 2010 indicates a general population growth in older age groups and a required change in care provision to enable those needs to be met. 11
11.3 The intention was to undertake a procurement to deliver care to the same level of quality or better as currently. Contract mechanisms and specific reference to equality and independence inserted within the core principles of the care specification further reinforce this requirement. 11.4 Access to services/ placements will be through standard pre-existing council and NHS care management protocols and placement procedures which it is assumed are, and will remain, EIA and legislative compliant. 11.5 An increase in specialist housing for older people within Westminster will allow more Westminster residents to remain living in the borough close to their families/ local communities as opposed to being placed outside the borough which is currently the case for approximately 40% of residents. 11.6 Any change in care type proportions and location will be assessed through individual site EIAs to prevent discrimination towards any group. Any negative impact on surrounding community services, (including reducing access to local culturally specific cafes, services, etc) will be assessed. 11.7 Westminster Council and the NHS Clinical Commissioning Groups will carefully consider how any move post redevelopment for those affected by proposed changes is sensitively managed. A detailed plan to manage and support any residents affected and their families to assist in a smooth transition will be drawn up on an individual basis involving existing health and social care staff i.e. GPs, Care Management services and utilising advocacy organisations to facilitate this process. 12 Conclusion 12.1 This report has detailed a robust Competitive Dialogue Procurement Process in line with EU Procurement Regulations. 12.2 The process identified a Preferred Bidder who submitted the most economically advantageous bid to the Council for the provision of care services in the SHSOP Care Homes pre/post redevelopment. 12.3 The recommendation is to award a contract to the preferred bidder. 12.4 Should an award not be made the objectives referenced in paragraph 3.4 will not be realised and there will be risks to WCC and the NHS in requiring the incumbent providers to continue service provision. This would have financial consequences and reputational consequences to both WCC and the NHS if a decision to award is not made. 12