|Croydon Conservatives - Article From our Database|
|30 April 2013|
|£22m NHS scandal: individual officers should be accountable|
In a report of its findings published today, the committee called for the NHS to identify and take necessary action against those responsible for the £28m misreporting of finances at Croydon Primary Care Trust, in 2010/11. It wants the secretary of state for health to compel Caroline Taylor, former NHS Croydon chief executive, who refused to appear before the committee, to answer questions about the £22m overspend that occurred when she was the “accountable officer”, and to publish the findings. And it questions the professional competence of NHS Croydon’s finance management at the time, when poor accounting practices masked and prevented the deficit from being identified sooner.
Clinical Commission Groups in south-west London are recommended to now review the qualifications of staff that have responsibilities for budgets. All budget holders should be made personally responsible for their budgets. And NHS bodies should make a commitment to help foster a culture of openness, honesty and challenge.
The review was conducted by six local authorities in south-west London. Croydon Council, along with Kingston, Merton, Richmond, Sutton and Wandsworth, formed a joint health overview and scrutiny committee (JHOSC) in September 2012 to investigate how the accounts had been misstated by at least £28m. When they were first signed off in June 2011, the accounts reported a £5.54m surplus, but the true figure was a deficit of more than £22m. The local authorities felt that a £1m, NHS London-commissioned report into the fiasco did not provide proper public accountability for what had happened and did not hold any individuals responsible. They were also concerned that professionally weak individuals might remain in the NHS and continue to pose a risk to sound financial management.
The JHOSC’s report disputes NHS London’s claims that the misstatement of accounts arose from system failures alone, and has called on the NHS to conduct an investigation into officers whose “action or inaction” had been the root cause of the overspend, and the subsequent cover-up. From evidence received, it was able to conclude that there was insufficient senior supervision of the finance team and that Mark Phillips, interim deputy director of finance, did not meet the mandatory professional requirements and was not suited to lead the finance team in finance director Stephen O’Brien’s absence. It also cannot rule out that there was significant motivation for senior officers to disguise the extent of the financial incompetence at NHS Croydon to safeguard their own positions.
The refusal of key NHS officers, including Caroline Taylor, Stephen O’Brien and Mark Phillips, to appear at the JHOSC meant it was not able to get a clear picture of the financial management at NHS Croydon, which has left crucial questions unanswered. The JHOSC has called on the secretary of state to grant health scrutiny extra powers to compel senior NHS officers to cooperate fully in future investigations.
The JHOSC disagrees with the NHS’s own findings, which stated there was no adverse impact on health-care provision in Croydon. It found that the financial management was so poor it was not possible to track where the money had been spent and that it would have had a detrimental impact on health services in Croydon.
The JHOSC conclusions also:
- Noted that the culture of complacency and the need to achieve a balanced budget at NHS Croydon prevented internal challenge.
- Noted that a large number of interim appointments had contributed to a culture in which accountability was low and long-term issues not considered.
- Noted that external and internal audit reports are unreliable indicators of good governance even when conducted properly, although in this case they fell short of expected standards.
- Noted that the audit committee and the NHS Croydon board had been too passive and prevented the overspend and lack of budget management from being identified and addressed sooner – they placed too much reliance on audit reports.
- Asks CCG Accountable Officers in south-west London to take personal responsibility for implementing Ernst and Young’s recommendations.
The chair of JHOSC, Croydon councillor Jason Cummings, said: “What has become clear from the committee’s review is that the accounting errors were deliberately hidden. This was not the result of any system failure but a consequence of the action of individuals, who have still to explain their actions.
“We have been faced by a wall of silence from key witnesses in the NHS and subsequently there are still some questions that remain unanswered. In particular, we still don’t know why the accounts were altered and whether patients had been directly affected.
“This cannot be right, and we now call on the department of health to carry out rigorous investigation and ensure the relevant officers can be publicly held to account.
“We are satisfied that efforts have been made to address the concerns raised by Ernst and Young but we are also recommending a number of extra measures to make sure this never happens again. The public needs to have confidence in the NHS and be sure that their money is in safe hands.”
The review was carried out at a south-west London level because all six PCT populations were affected by what had happened, and involved a series of public meetings which invited witnesses to discuss their experiences of Croydon PCT.
The JHOSC was convened in September and invited a number of key witnesses to answer questions at a series of pubic meetings.
A copy of the report is available at www.croydon.gov.uk