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CSU warned off getting ‘too big’

11 December 2012

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Commissioning support units (CSUs) have been warned against entering into a “free for all” competitive market post April 2013.
Sarah Whiting, managing director of North West London CSU, warned other CSUs that by getting “too big”, they run the risk of alienating their “core business” ie clinical commissioning groups (CCGs) in their local area.
“We are not going after every bit of new business – our eight CCGs are our core business,” she said.
“If you get too big, you will fail to deliver to your core business and they will not want to continue to work with you. CSUs need to stay grounded.”
She added that any new business a CSU attracts “must compliment and enhance” the work it is already doing with its CCGs.
“A CSU should not attract business that could conflict with the aims and messages of its core business. For example, we would steer away from running the communications function of the local authorities in the area as their messages could conflict with those of the CCGs,” she said.
“It won’t be a free for all.”
Alison Hughes, managing director of West Yorkshire CSU, said every piece of new business should be judged “on its own merit” but agreed that a CSU will lose its CCG business “at its peril”.
She urged CSUs to look within their own local ‘patch’ in seeking out additional business opportunities – such as by growing the number of services on offer to existing customers.
“There are a whole range of opportunities for CSUs to improve their margins that aren’t about directly competing against other CSUs,” she said.

Essex CSU and Hertfordshire CSU managing director David Stout also agreed that becoming “distracted” from doing good business with existing customers is a “big mistake” and that CSUs should be “prudent” when judging the criteria by which to go after new business.

“Getting too big doesn’t necessarily mean that you won’t be able to deliver to your core customers. If you get bigger through your core business, that is fine. But if you get distracted by something completely different and new – that could be quite risk,” he said.

However, one CSU lead disagreed that big CSUs will fail to deliver to their ‘core business’ and believes the bigger the organisation, the better for CCGs.
“I think there is a balance to be found [in terms of CSU size] and I don’t think anyone has quite worked out where that tipping point is yet,” said Keith Douglas, managing director of Commissioning Support South.
“What we are saying to our CCGs, is the bigger we get, the better for them because we can create better economies of scale and the more customers we have, the cheaper the services we can provide.
“There is a balance and our CCGs are quite content with the fact that we have grown a bit and there is certainly no indication that any of our CCGs will stop working with us if we get too big.”
Stephen Childs, managing director of North East CSU, also voiced concern over CCGs “racing” to market for their commissioning support post April 2013 – something he claims, will place CSUs into “destablising significant tendering exercises to survive”.
However, Douglas welcomed the CCGs tendering for commissioning support as it will open the door to CSUs signing “longer-term and more stable” contracts.