Health region attacked for wasting pounds 10m: MPs to study conduct of public business

A REPORT condemning declining standards in the conduct of public business is being prepared by a powerful cross-party group of MPs amid mounting concern that the new private-sector driven approach is harming honesty and integrity.

The special report is being drawn up by the House of Commons Public Accounts Committee, which yesterday criticised 'serious shortcomings' at the West Midlands Regional Health Authority - which saw at least pounds 10m wasted 'at the expense of health care for sick people' in the region.

Robert Sheldon, the committee's chairman, said the report was planned because 150-year-old standards of 'honesty, integrity and proper conduct' in public business were in danger of being 'whittled away'. The health authority was attacked for spending pounds 2.5m on management consultancy when the contract was let without a tender, was not submitted to the region for approval and when no formal contract for the service was drawn up.

The committee was 'astonished' that Chris Watney, director of regionally managed services, pursued the privatisation of the supplies branch without the health authority's knowledge and when the authority had no policy for such a privatisation. It also attacks the management buyout which created Qa Business Services, a company which has since failed. The authority provided turnover guarantees which have cost it pounds 928,000.

The committee said it was 'unsatisfactory' that Martin Davies, a former finance director, made a pounds 300,000 loan to another company in financial trouble without reference to the authority. The authority had also provided a 'quite unjustifiable' severance package for Mr Watney and honoured a pounds 41,500 overpayment when it should have considered dismissing him.

The report said Mr Watney, new to the NHS, 'was able to follow his own path, making a bonfire of the rules in the process, uncontrolled either by the regional health authority or senior management'.

With the committee due to report shortly on the scandal surrounding the Wessex region's computerisation programme, Mr Sheldon said there had been 'a weakness in the new culture in the organisation' in the West Midlands which resulted from bringing in 'people from outside who had not had the standards of the civil service, or of the NHS itself'.

He added: 'I am so concerned about these matters and I think there are now so many examples where things have gone wrong that I want to bring them all together and show how it is that we had a reputation for honesty and integrity and proper conduct (in public service) and there is a danger of that being whittled away.'

The committee said all senior management and members of the West Midlands authority were to blame for the 'catalogue of mismanagement and lack of control' but only one senior manager had been disciplined. Dr Brian Mawhinney, Minister for Health, said 'extensive remedial action' had been taken with a new chairman, chief executive, senior managers and non-executive members.