A private company with next to no track record in delivering mental health services is to takeover an NHS contract worth £86m, in an unprecedented example of escalating privatisation within Britain’s healthcare system.

The NHS primary care mental health service for Bristol, North Somerset and South Gloucestershire has been given to a private company called Physiotherapy Solutions Limited in a contract worth £86 million, taking it away from a non-profit provider with more than a decade’s experience delivering a service it designed to be as close to NHS provision as possible.

Vicki Palmer, CEO of current provider Oasis-Talk, told Novara Media she believes the decision to give the contract to Physiotherapy Solutions Limited, “puts at risk 20,000 people a year who need well-coordinated, clinically effective services to meet growing mental health needs”.

After the Improving Access to Psychological Therapies (IAPT) programme was rolled out across the country in 2008, Palmer was part of a team that delivered a ‘well-integrated service’ (essentially part of the NHS) for four years. But as a result of restructuring under the Health and Social Care Act 2012, funding for the provision was cut.

“What was a really good service was just going to be closed,” Palmer said, “so I thought on my feet to create a vehicle from which to bid for the new contract”.

Palmer and her colleagues formed a community interest company, reasoning that it was “the closest we could get to continuing NHS delivery in this privatised world”, and won the bid. Oasis-Talk has been delivering over half of IAPT services in the area ever since.

IAPT is the NHS’s largest mental health programme, treating over one million people a year, mainly through short-term talking therapies. It is lauded by the government as the solution to the mental health crisis, though critics argue that, among other problems, IAPT services are too results-driven – aiming for ‘recovery’ as quickly as possible, to minimise costs and get people back to work, rather than addressing the root causes of mental health problems.

Within the existing framework, Palmer said that despite “severe cuts and rising costs”, Oasis-Talk has gone from strength to strength. Recovery rates are above average nationally and locally, and the service has built up numerous partnerships with local groups and organisations in order to work in an integrated way with different communities – for example BAME communities, older adult communities and the homeless community. The service was told that it was ‘outstanding’ when it was accredited by the Royal College of Psychiatrists three years ago.

This April, following a re-procurement process by the local Clinical Commissioning Group (CCG), Oasis-Talk narrowly lost out on the new £86 million contract to continue delivering mental health services. The successful bidder – due to take over in September – was a private company called Physiotherapy Solutions Limited (trading under the name Vita Health Group) with no record of delivering IAPT services, and no connection to the local area. Palmer said the decision has thrown the current service and its staff into “chaos”.

“We’re already haemorrhaging really good talent and skills and goodwill,” said Palmer. “We have a mounting waiting list already – now twelve months compared to three or four – because staff are leaving and not being replaced.”

“Everybody is shocked to their core, nobody can understand it,” she continued. “The question on everyone’s minds is: ‘Who are these people they’re contracting with?’.”

Palmer said she doesn’t know whether the commissioning decision was made due to “incompetence or something else”. She is aware the CCG’s own process may have been impacted by cuts – the group has had to save £80 million over the past three years. “I don’t know if that has compromised their capacity at commissioning level,” said Palmer, “I can only assume it might have done”. Palmer said from her perspective the process “boiled down to ‘who can write the best bid?’” and had “nothing to do with what you can actually deliver”.

Palmer and her team have set out their numerous concerns in a letter to the CCG, seen by Novara Media. Chief among the concerns is that Physiotherapy Solutions has “no significant IAPT experience, and no experience of delivery, relationships or partnerships in Bristol, North Somerset and South Gloucestershire”.

When asked for comment, a spokesperson for the CCG listed Physiotherapy Solutions’ accreditation and its track record in mental health – which consists mainly of short-term Employment Assistance Programmes (EAPs) for businesses, such as John Lewis and The Bank of England. The only experience Physiotherapy Solutions has of single-handedly delivering a full IAPT service is in Basildon and Brentwood – where they were also awarded the contract, which began this April.

Andrew Gordon, a Labour councillor in Basildon, said there is “a lot of fear” in his constituency regarding the privatisation of services. “I do a lot with mental health in my area and across the country,” he said, “and I’ve never heard of [Physiotherapy Solutions] before”.

“IAPT services are essentially now the frontline of mental health services, dealing with highly complex, vulnerable people,” he continued, “so it is concerning that what is basically some glorified physiotherapy company has been commissioned”.

“Delivering counsellors to employees is very different to delivering psychological intervention to a single mum who’s just had her benefits docked and is experiencing bipolar.”

Another key concern for existing providers in Bristol relates to Physiotherapy Solutions’ lack of provision for staff wellbeing. Having seen Vita’s plans for this, Palmer said she was “disappointed and actually shocked”. With tight budgets and high intensity workloads, IAPT staff are prone to burnout. And yet, said Palmer, “the amount of provision they’re planning is inadequate to support staff clinically… I would even go as far as saying it’s potentially dangerous”. Instead, Vita’s plans emphasise “performance management” which, she said, “feels like going back ten years, when all we had was the nuts and bolts of a basic, manualised programme”.

The directors of Physiotherapy Solutions Ltd. are Darren Farrell and Stewart Patterson – who are also the directors of a series of connected private health companies, whose parent company is a European private equity fund called ArchiMed. For Physiotherapy Solutions alone, the two directors took dividends of £1.5 million last year.

In a document Vita Health Group submitted to the CCG, seen by Novara Media, the private company said that “ArchiMed’s overall objective is to create the UK’s leading provider of mental and physical health solutions”.

Gordon believes Physiotherapy Solutions may have won due to the “commercialised” nature of their bid. “CCGs are struggling to make ends meet, so to have a provider that says, ‘We’re going to do everything that the existing provider does, more cheaply… to a cash-strapped CCG, that’s an attractive proposition, even though we lose so much by doing that”.

Palmer said that in a meeting, a Vita Health Group representative “showed little understanding of how to build local partnerships, of how to really understand the nuances of the population you are serving”. The representative announced they would be using a “marketing programme” to work with local partners.

Ultimately, Palmer said she is concerned the private company will fail on delivery and “cream off the profit” after three years, leaving a skeleton service behind.

In Basildon, Gordon is also concerned that “the nature of mental health services are not congruent with the values of the private sector: profit”.

He said that current service users have told him they lack trust in a private provider – a feeling which he himself shares: “I think it’s more difficult to approach a private provider, a business that is out to make money; when you’re dealing with mental illness, trust is incredibly important”.

Justifying their decision, a spokesperson from the Bristol, North Somerset and South Gloucestershire CCG said:

“The CCG applied a range of evaluation criteria regarding both quality and finance to determine the best service delivery model for the future service. These included culture and ethos, service delivery model, quality and clinical governance, safeguarding, equality and co-production and involvement. “These criteria were assessed by a formal evaluation panel with a broad range of skills that were allocated to questions according to their knowledge and expertise. “This evaluation panel included representatives from BNSSG commissioning and contracting, clinicians, Bristol City Council commissioners, quality, transformation, partnerships, safeguarding, public health, research and evidence, NHS England crime and justice, local authorities, human resources, inclusion, information management and technology, finance, the Independent Mental Health Network, service users and carers.”

Oridinarily, a CCG would complete due diligence on bidders before they are awarded contracts. However in this instance, the process is happening retrospectively, it will be completed in July, before the new contract starts in September. For Palmer, this protracted due diligence process raises questions: “Why this unusually long period of due diligence if there are not things of concern?”.

Since the Health and Social Care Act 2012, NHS services have been siphoned off to the private sector at an alarming rate – often with disastrous results – but even within this context, the case of Physiotherapy Solutions in the Bristol area and Basildon seems to be new terrain. “In terms of mental health services, this is probably the first example of its kind and I think it is just the beginning,” said Gordon, adding that, “IAPT is a primary mental health service, so I would liken this to the local A&E being taken over by Virgin Health”.

As the due diligence process on Physiotherapy Solutions continues, Palmer hopes that the CCG will heed Oasis-Talk’s concerns. “I’ve been clear with staff that they mustn’t pass on their anxieties to service users,” she said, “but we’ve now reached a point where, for service users who are starting high-intensity therapy, we can’t complete their treatment within the timeframe before our contract ends”.

Novara Media contacted Vita Health Group for comment and received a reply from a Crystal Palace Physio Group email address directing us to the CCG for comment.