Fiasco that exposed ethical gulf: Tim Kelsey looks at the background to a hugely expensive NHS embarrassment
Friday 10 December 1993
But mismanagement, misguided enthusiasm and sharp commercial practice combined to make it one of the biggest health service embarrassments in recent years, and has left the reputation of Wessex Regional Health Authority in tatters. RISP was supposed to be proof that private sector business disciplines can be brought to bear in the public sector and lead to a more efficient, and cost effective service. It was a monumental white elephant and it exposed the ethical gulf between private business and the public sector.
The report, published yesterday by the Public Accounts Committee, was prompted by a joint investigation published earlier this year by the Independent and Computer Weekly. Our inquiries revealed the existence of two lengthy confidential reports by the district auditor which criticised senior managers within the authority, including the chairman Sir Robin Buchanan, for allowing the project to last so long and be so poorly managed. The auditor questioned the role played by Britain's largest computer consultancy, Andersen Consulting, in winning one contract. He also identified conflicts of interests between Wessex and its other contractors.
The Regional Information Systems Plan was born in 1983 when the idea for the project was developed by Wessex staff working with consultants from Arthur Andersen (the company later turned its consultancy division into a separate operation called Andersen Consulting) working with Wessex RHA.
By May 1984, RISP had been adopted by the authority. Invitations to tender for the first part of the contract were issued in 1985 and Andersen went on to win it.
Their tactics in doing so were described as 'disturbing' by the district auditor. He noted that Wessex had decided in favour of another contractor, and that once this was known, authority executives were subjected to intensive lobbying on behalf of Andersen to reconsider.
Lord Patrick Jenkin, then an MP and a business adviser to Andersen, telephoned the then chairman of the authority, Sir Bryan Thwaites, to recommend Andersen's bid. Lord Jenkin, who said that he acted in good faith, had appointed Sir Bryan, when Secretary of State for Health.
In 1986, Andersen's consultants accompanied executives from Wessex who went to the US to evaluate another contractor's products. The PAC said yesterday it was 'clearly wrong for somebody who is tendering for NHS business also to be advising the NHS as their consultant'.
By 1988, when Sir Robin Buchanan was appointed chairman, it was clear that RISP was in trouble. Original cost estimates of pounds 29m had hugely inflated. If it had been abandoned at the time, at least pounds 8m would have been saved. Instead, Wessex commissioned a computer company called CSL to manage its information systems in what was effectively an attempt at privatisation.
CSL set up a company called Wessex Integrated Systems which took over all computer services in the health authority. The first contract with WIS was signed in 1988, shortly after Sir Robin's arrival. Sir Robin told the Public Accounts Committee that he had no involvement in this first contract. However, a letter was leaked to the Independent which showed that he did have some detailed knowledge of its terms and conditions.
By October 1989, only three of the authority's nine districts were still prepared to implement RISP. Sir Robin then negotiated the second contract. Far from setting tougher conditions, it stated that the company would be paid 'whether (or not) there was work for them to do'.
Sir Robin was also responsible for one of the more disturbing conflicts of interest. Shortly after becoming chairman, he approached IBM to ask it to supply a project manager to run the RISP. IBM was one of the biggest suppliers to the authority and was negotiating a contract to supply a new mainframe.
Shortly afterwards the authority bought an IBM mainframe at up to pounds 1m more than it should have paid.
The project was finally abandoned in mid-1990 after the appointment of Ken Jarrold as regional general manager. The total that had been spent was not less than pounds 43m, and may have been more than pounds 63m. No one has been prosecuted, disciplined or fined.
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