MPs 'horrified' at pounds 63m loss by health authority: Committee chairman overrules request to keep mismanagement evidence secret

THE CHAIRMAN of Wessex Regional Health Authority was yesterday condemned by MPs for failing to stop computer contracts which lost the authority up to pounds 63m.

Sitting in special session, the Public Accounts Committee was also told how, despite repeated claims that mismanagement had been eradicated, the authority's regional general manager acted beyond his authority and in breach of Treasury rules in his dealings with an employee late last year.

The hearing centred on evidence provided in a memorandum filed by the Comptroller & Auditor General. Robert Sheldon, the committee chairman, overruled a request that this evidence be treated in confidence. He said this was a 'truly horrifying story' of mismanagement and should be made public.

Annexed to the memorandum were two previously secret district auditor reports which disclose the role played by Sir Robin Buchanan, chairman of the authority, in allowing conflicts of interest to arise and in contract negotiations. The Independent and Computer Weekly disclosed the existence of these secret reports earlier this year.

Sir Robin was attacked by MPs for taking penalty clauses out of one contract in 1990. The Department of Health was told these clauses had been left in. He also sought the appointment of a senior computer manager on secondment from IBM, a contractor to the authority. This officer later advised the authority to buy an IBM computer at a much higher price that it need to have paid. Sir Robin said he did not know about this.

'Your ignorance is almost glorious to the point of incomprehension,' Alan Williams, Labour MP for Swansea West, said. Sir Robin countered: 'I am a very effective non-executive chairman of any organisation.' To which Mr Williams, reflecting the mood of disbelief, said: 'You did do some dynamic things as a chairman. They were wrong but you did them.' Sir Robin is also chair of the NHS Supplies Authority.

The committee was told that the official who claimed to have brought the computer project to a close in 1990, and who intiated the district auditor inquiry into it, had broken Treasury rules himself. Ken Jarrold, regional general manager, admitted paying pounds 78,000 to a former employee when she left last autumn despite the fact that legally she was only entitled to three months' severance money. He claimed circumstances conspired to force such a high settlement.

Mr Jarrold said he estimated that the NHS has lost a minimum of pounds 20m on the computer programme. Others put the figure closer to pounds 63m.

Sir Duncan Nichol, chief executive of the NHS Managewment Executive, admitted that his department failed to react quickly enough to growing evidence of negligence within the authority after 1986.

The Independent disclosed yesterday that in 1987 Ministers had misled Parliament over the awarding of a contract by Wessex to the consulting firm, Arthur Andersen & Co. MPs were told at the time that tendering for this contract confirmed to EC rules. In fact a report sent to the Tory Party chairman, Sir Norman Fowler, who was then Secretary of State, questioned the legality of the tender.