The Right to Request Programme, which was set up as part of the Transforming Community Services drive, encouraged PCT staff to set up social enterprises to deliver services previously delivered in house.
But the NAO warned that the social enterprises will be ‘highly dependent’ on work and cash flow from their respective PCTs, and will have to operate in an ‘increasingly competitive market’ as a result of the NHS reforms.
It said: ‘In a keen, competitive market it is likely that some of the service providers, including new social enterprises, will prosper and some will struggle.
‘In such circumstances it will be important that the commissioning body has a clear idea of how it will operate when faced with the possibility of a social enterprise failing.’
It also raised concerns that the DoH did not set ‘measurable objectives’ against which to evaluate the scheme. It said without these objectives the likelihood of the expected benefits being realised will be reduced.
Amyas Morse, head of the NAO, said the DoH need to reassess its approach towards the programme.
He said: ‘There are many risks to be managed if the DoH is to get value for money from the £900 million contracts awarded to social enterprises.’
But the DoH said the NAO report fails to understand the purpose of the Right to Request scheme.
A DoH spokesperson said: ‘Across the country, the very reason why they have been so successful is that it is led by users of the service - local people - staff - those who are all best placed to deliver responsive services for their communities.’