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Monday, June 08, 2009

Pressure on public spending – portents of the future?

I have been wittering on about the consequences for the UK’s future when public spending is slashed to reduce the fiscal deficit. Here are a couple of examples of what this means in reality.

Headline: Elderly left at risk by NHS bidding wars to find cheapest care with reverse auctions

An online auction system developed for councils to buy the cheapest refuge bins and stationery is being used to buy end-of-life and dementia care for vulnerable elderly people. The NHS in London has held a series of 30 “reverse e-auctions”, where bids are driven down instead of up, for £195 million worth of contracts for palliative and dementia care for patients leaving hospital.

The Times reports that standards and quality have deteriorated rapidly where these auctions have been used and in one case a company that won a local authority’s auction was struck off the national register of approved providers weeks later because the care it offered was of such poor quality.

Headline: Age Concern threatens to sue PCT over loss of contract

A regional division of Age Concern has lost a palliative care contract to Allied Healthcare. A charity spokesman said that many other charities were losing tenders because of the pressure on councils to cut costs. "What councils call 'best value' often means cheapest."

OK, OK so what does this mean? It means that if you supply services directly or indirectly to the public sector you will come under extreme pricing pressure. If you are interested in the 50-plus then this might well apply to you.

Terrifyingly, these two examples come from the era before the real pressure to reduce public spending started. Dick Stroud

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