Health authority attacked for wasting public money

A REGIONAL health authority wasted pounds 4m of public money on management consultants who charged the cost of leasing executives' London homes, the hire of aircraft and 'lavish' entertainment to the NHS, the National Audit Office reveals today.

A scathing report by Sir John Bourn, Comptroller and Auditor General, accuses the West Midlands Regional Health Authority's former director of regionally managed services, who placed and managed the consultancy contract, of a 'cavalier disregard for the standards of conduct expected from public officers'.

Later sacked, he took away pounds 41,500 too much in redundancy pay after the authority agreed to additional pay-offs without Department of Health approval.

Sir John, who vets whether money voted by Parliament has been properly spent, has also refused to approve 1991-92 accounts for income support and family credit for the fourth and third years respectively because of 'significant' errors in awards, while housing benefit accounts have been qualified because of 'material uncertainty and irregularity'.

Donald Dewar, Labour's social security spokesman, said the Department of Social Security was being rapped over the knuckles again for the same mistakes. 'What is worrying is that there seems to have been little improvement since the accounts were subject to similar criticisms last year.'

The report, packed with instances of financial mismanagement, maladministration or ineptitude, criticises a supplies consultancy contract between West Midlands Regional Health Authority and the United Research Group as 'improperly entered into', vague about the consultants' role and cost, and badly monitored and controlled.

Questionable costs included pounds 350,000 in consultants' expenses containing 'such items as leased houses in London for the firm's executives and their wives, the hire of aircraft to come to work and lavish entertainment', the report says. The authority had paid some invoices without scrutinising supporting bills.

Wessex Regional Health Authority also comes under fire in the report - part of the 1991-92 Appropriation Accounts - for wasting pounds 43m on a largely useless computerised information project, eventually scrapped after six years. Over-reliance on consultants, 'serious' failures in financial and management controls and conflicts of interest at a senior level were to blame.

Wrong calculations of entitlements by benefit offices was the main reason for a 16.9 per cent error rate in income support payments, leading to overpayments of pounds 231.7m and underpayments of pounds 86.8m. Sir John says: 'My audit of income support payments during the previous three financial years disclosed significant levels of error. There was no improvement during 1991-92 - if anything, the situation has deteriorated.'