Bottomley fails to act on NHS report over 'wasted millions'

VIRGINIA BOTTOMLEY, the Secretary of State for Health, has failed to act on evidence that a man appointed by the Government to one of the most senior offices in the National Health Service was involved in wasting millions of pounds of public funds.

An investigation by the Independent and Computer Weekly has revealed that mismanagement in Wessex regional health authority led to losses on computer contracts that may be as high as pounds 63m.

Sir Robin Buchanan, the authority's chairman, intervened in negotiations for contracts committing the authority to paying for services it did not need, and sometimes did not get. He also allowed conflicts of interest with a private sector contractor.

Sir Robin's role is identified in a confidential report by the District Auditor. Both Wessex and the Department of Health have suppressed its publication. Mrs Bottomley has a copy and is understood to have been briefed on Sir Robin's role but is not believed to have taken any action. The department said last night: 'The Secretary of State did not suppress any report intended for publication.' A spokesman added: 'We're not denying knowledge of the (confidential) report.'

Sir Robin, still Wessex's chairman, was appointed to the chair of the NHS Supplies Authority by William Waldegrave, the former Secretary of State for Health, in 1991. That authority, a key part of the Government's NHS strategy, controls a pounds 4bn-plus budget.

Sir Robin said last week that he had acted in Wessex's best interests. He added that reports of mismanagement were 'yesterday's agenda crawled over by so many people'. He acknowledged he might have acted ultra vires, but said: 'If somebody deliberately flouts rules then they are a prat.'

The report, supported by other documents and sources close to the authority and its sub-contractors, reveals Sir Robin took a leading role in pursuing the privatisation of computer services in Wessex, though it could neither afford, nor justify, the expenditure. Funds wasted on the plan to improve and privatise information services are estimated to rise as high as pounds 63m. Some of that had been lost before Sir Robin's arrival at Wessex in 1988. There are no exact figures available, because no accurate audit of expenditure was made.

In pursuing the privatisation, Sir Robin was apparently instrumental in negotiating a contract with a computer consultancy now owned by ICL that guaranteed its profits, imposed no penalties for poor performance, was not awarded by competitive tender, and contained financial provisions which, according to the suppressed report, the health authority had no power to authorise.

Sir Robin said: 'The whole agreement was taken properly and in great depth and detail through the RHA (regional health authority).'

In the months before the contract, Sir Robin approached the parent company of WIS (Wessex Information Systems - the contractor) for a loan to pay for the implementation of a computer system in one district authority. The Treasury refused authorisation. Sir Robin also seemed indifferent to the risks of conflicts of interests with contractors.

Next Wednesday, the Commons Public Accounts Committee is expected to consider allegations of financial mismanagement at both Wessex and West Midlands regional health authorities.

Sir Jim Ackers, West Midlands chairman, resigned his post last month after successive financial scandals. Some concern the circumstances surrounding the management buy-out of the health authority's computer division.

Sir Robin, a chartered accountant, was appointed to Wessex after six years as chairman of Bath District Health Authority. Towards the end of his tenure, staff supported a vote of no confidence in his management style.

He is a leading Tory activist in Bath and was a local councillor. An investigation by the local government ombudsman cleared him of using his council position to the advantage of acquaintances.

'Wasted millions', page 7