South Birmingham Health Authority kept from its parent body, the West Midlands Regional Health Authority, the growth in its deficit to pounds 16m. MPs on the all- party Commons Public Accounts Committee said they were concerned at 'obfuscation on the part of the South Birmingham Health Authority'.
Such behaviour, found the MPs, 'reflects adversely on the efficiency with which the South Birmingham Health Authority was being managed, on the honesty of managers, and on the Authority's accountability to the Regional Health Authority and the NHS Executive'.
The committee's report highlights a series of financial failures and errors at South Birmingham which is likely to head further into the red in the current year. In 1992-93, the MPs note, the authority wrote off pounds 3m of income owed to it by other authorities. Instead of pursuing the money, South Birmingham merely scrapped the debt. 'We find this practice unacceptable,' the MPs say. They add that South Birmingham should change its billing procedures and other authorities in the West Midlands who benefited should co-operate to repay the money.
The report says South Birmingham, the overseeing West Midlands region and the NHS Executive, were all to blame for failing to address the problems. But MPs say they are 'particularly concerned' at the way information about the spiralling deficit was withheld from regional bosses.
In December last year the authority forecast debts of about pounds 12m. But this jumped to pounds 16m in the space of a month because 'information had been concealed to feed out bad news in increments'.
Other health authorities in the West Midlands had suffered because the RHA was having to bale out South Birmingham which had been in trouble from the day it was set up in 1991. MPs said they were 'disturbed' to find the auditor appointed to look into the difficulties had found no evidence of them being addressed.
The NHS Executive and the West Midlands RHA took too long to tackle the problems of South Birmingham, the MPs said. There were unacceptable delays in terminating the contract of Gareth Jones, the former finance director, who left in June last year. Stuart Dickens, the former chief executive, left in May the same year.
The report notes both men were 'in effect dismissed from their posts'. Nevertheless, they received severance payments running into tens of thousands of pounds.
The MPs said: 'In view of the fact that the NHS Executive told us that both indivduals were in effect dismissed from their posts, it is not clear to us why the former chief executive and the director of finance have subsequently been working as consultants in the NHS.'
Tom Sackville, the health minister, said the Government and the NHS Executive had already taken 'remedial action', including issuing codes of conduct and accountability for NHS boards. Staff had been sent guidance on standards of conduct.
South Birmingham said the main problem had been debts run up by the General, Queen Elizabeth and Selly Oak hospitals. It hoped to get these hospitals into balance in the next financial year.