Trusts across Liverpool are pulling out of a £27m deal to buy their payroll and recruitment services from outsourcing company Capita, says the Health Service Journal.
The trusts are not yet half way through 7-year contracts.
Five out of eight North Merseyside providers that transferred services to Capita in 2012 will have brought them back into the NHS, or moved to other providers, by 1 August, according to statements given to HSJ.
The contract terminations follow concerns about the quality of the service provided by Capita HR Solutions.
Royal Liverpool and Broadgreen University Hospitals Trust and neurosciences specialist Walton Centre Foundation Trust confirmed to HSJ that they had ceased to receive any services under the Capita contract.
Royal Liverpool board papers in February said that an initial “informal letter of concern” about the Capita services was sent collectively by the North Merseyside trusts in March last year, but “no significant improvements were seen within three months”.
When Capita’s HR business won the North Merseyside contract in 2011 it hailed it as a “landmark agreement” which marked “the first time NHS trusts have come together in this way to collectively outsource their HR, payroll and recruitment functions”.
A Capita spokeswoman told HSJ that following a joint review of recruitment, payroll and HR processes, Capita and a number of trusts in North Merseyside have mutually agreed that Capita will no longer provide these services.
In July last year Payroll World reported that the group of Merseyside hospitals had sent a 9-page letter to Capita referring to repeated “minor failings”. It threatened to end the £27m contract.
Among the mistakes were over and underpayments to staff. Another allegation was that Capita breached data protection laws by sending confidential and personal information of employees to other staff and paying up to two months’ salary to individuals that had applied for jobs at one of the hospitals but ultimately failed to be offered a position.
Capita was said to be working closely with the trusts to overcome the issues identified in order to deliver an enhanced service for Trusts and their staff.
But more problems emerged.
Leicestershire and Northamptonshire trusts had problems with a Capita payroll contract in 2008. In 2008 HSJ reported:
“Five NHS organisations with more than 16,000 staff have ended a payroll contract with Capita after a catalogue of errors. The contract had been due to run to 2010 but was terminated last week after just 18 months.”