HC Deb 15 March 1993 vol 221 cc143-50

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]

11.43 pm
Mr. John Denham (Southampton, Itchen)

I am extremely grateful for the opportunity to initiate this Adjournment debate. Over a period of eight years, Wessex regional health authority spent more than £60 million on the failed regional information systems plan—or RISP—computer project. Millions were wasted. The Public Accounts Committee will now examine the Wessex saga in detail, but it might not have done so had it not been for inquiries by Computer Weekly, The Independent and myself.

Ministers have known everything that I am about to say for months and, in some cases, years. They have done nothing to reveal the full facts. It is only today, faced with the prospect of this debate, that Ministers have announced new measures to control computer projects in the health service. Control will never be successful, however, until the full lessons of Wessex have been learnt.

I have four main concerns: the failure of the Department of Health to control Wessex and its active connivance at the cover-up; the network of personal, political, commercial and corporate interests that exploited Wessex and their interest in concealing the truth; the way in which Wessex sought to divert attention from key aspects of the RISP project, particularly those personally involving Sir Robin Buchanan, the chairman of Wessex and now of the NHS supplies authority; the abject failure in nearly every case to recover public funds or to take effective action against companies or individuals.

In September 1986, Arthur Andersen and Co. and IBM received the main RISP contract. Public concern broke out almost immediately because in May 1986 the tendering process had been reopened to enable the IBM-Andersen bid to move from fourth place to become the prime contractor.

The report that the Government had wanted to suppress reveals that, during that process, the RHA chair and/or the regional general manager were lobbied aggressively by people with vested interests: Jim Foster, who was an RHA member and also a board member of IBM; Sir Edwin Nixon, the then chairman of IBM, who became deputy chairman of Natwest; Sir Anthony Cleaver, the chief executive of IBM; and the noble Lord Jenkin, a consultant to Arthur Andersen, who clearly had unusual knowledge of rival bids which the district auditor implies were wrongly obtained through other Andersen consultancies with Wessex. At one stage, Andersen was allowed to accompany a Wessex visit to the United States to assess a DEC bid even though Andersen was a direct rival in competition. Andersen also took part in Wessex debriefings. There was much to cover up.

At least one company protested to the Department of Health. In 1986, the district auditor submitted a report in confidence which I am informed covered all the major issues revealed in the 1992 confidential auditor's report.

The Department knew what had happened, but immediately moved to conceal the truth. In December 1986, my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) asked the then Minister of State, the right hon. Member for Braintree (Mr. Newton), who had advised Wessex on any aspect of the prospective contracts before tenders were invited. He was given a list of consultants employed between October 1984 and October 1985, but those arbitrary dates excluded Andersen's role dating back to 1983. The Minister did not draw attention to Andersen's role in 1986. At the time that that question was answered, the hon. Member for Derbyshire, South (Mrs. Currie) was a junior Health Minister. Her husband and brother-in-law worked for Andersen.

On 17 December 1986, my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) asked the right hon. Member for Braintree on what basis, and by whom, the tendering companies for the Wessex RHA were selected. That question was answered five months later on 15 May, the day when Parliament was dissolved for the 1987 general election in which health was to be a major issue. A major scandal involving companies with individuals at the heart of the NHS and involving senior members of the Conservative party would have done grave damage to the Government. What better way to conceal a disingenuous answer than to wait five months until everyone's attention was elsewhere.

Not much happened in those five months. On 15 May the Minister told my hon. Friend the Member for Cynon Valley: I understand from the regional health authority that the tendering companies were selected under the EC-GATT arrangements."—[Official Report, 15 May 1987; Vol. 116, c. 431.] On 21 October, the Parliamentary Under-Secretary of State for Health, the hon. Member for Bolton, West (Mr. Sackville), told me There is no record of any correspondence between the right hon. Member for Braintree and the then Regional General Manager&it is possible that such assurances were given verbally although it would now be impossible to verify…it is clear that this procedure was not followed on subsequent re-evaluation of the tenders, which led to the contract being awarded to a different company than that originally selected. It took five months to make one alleged and unrecorded telephone call to produce an answer which was simply wrong and which the Department must have known, or suspected, was wrong.

It is not clear whether the district auditor who compiled the 1992 confidential report was asked to examine or was given access to the Department of Health's files on RISP. Last July, Wessex said the people with principal responsibility for RISP in the period 1982 to 1989 are no longer employed by the RHA. That was carefully worded and calculated to divert attention from three people associated with RISP after 1989. Sir Robin Buchanan became chairman in August 1988 after chairing the Bath district health authority when he must have been aware of the problems with RISP. Far from wrapping up RISP, he drove it forward long after health district support had collapsed.

Harry Tuffill was seconded to Wessex from IBM at Buchanan's request and reported directly to him. He was to abuse the conflict of interest inherent in the position that Buchanan had created for him. He did not leave Wessex until 1990.

The third was not a matter for Wessex staff: Philip Sellers was chairman of CSL. CSL advised Wessex on the privatisation of its computer division—the division responsible for RISP—and, through subsidiaries CFM and WIS, took over services. As the district auditor noted, The involvement of CSL as consultant and supplier was contrary to accepted best practice. The WIS contract was negotiated before Buchanan became chair and signed just afterwards. It effectively enabled Sellers' company to determine Wessex's computer budget in the company's interests. According to the district auditor, at worst, CSL knowingly or recklessly intended to promote its own interests and those of its subsidiary, WIS, at the expense of the RHA and public funds. Did Sir Robin end this deplorable situation? Far from it. He tried to raise a loan from Sellers to fund RISP in Bath, which, given WIS's position, would have been used to fund work by Sellers' companies, CSL and CFM, which enjoyed a unique ability to exploit the region, and would have been repaid by the taxpayer.

Sir Robin personally renegotiated the WIS contract in February 1990 on terms even more favourable to WIS. By this time, RISP was collapsing. Eight out of 10 districts had refused to accept the system. RISP should have been closed down, but Sir Robin went ahead. Bypassing the region's internal and external legal advisers, he brought in solicitors, Blake Lapthorn, who had never worked for the RHA before and who reported directly to him. The contract removed penalty and performance clauses. New provisions, which Deloittes advised against, were incorporated in the new contract that Sir Robin personally negotiated.

What was the position? WIS, a private company, could undertake work for other organisations knowing that its staff costs and overheads were already paid for—even overpaid for—by Wessex. The contract signed with WIS paid for 40 staff more than worked for the company. Work done by WIS for Rampton and Broadmoor was undertaken at non-commercial rates but was of course pure profit. Wessex was meant to get a share of the profits, but the original 50:50 split was altered under Sir Robin's chairmanship to become two to one in favour of WIS. According to the district auditor, there are strong grounds for questioning whether Wessex regional health authority has received full credit for profits earned on outside work undertaken by WIS. A payment of £68,000 "would appear suspect", as WIS recorded a turnover of £4.7 million.

When WIS and its parent company, CFM, ended their relationship with Wessex in 1991, they took possession of office equipment and personal computers. According to the auditor, it is probable that the equipment taken by CFM included items that were the property of Wessex. CFM should be required to prove that equipment they had taken possession of had not been paid for by Wessex. Under the contract, WIS records should have been made available to the auditors. To date, the confidential report records that these records have not been examined by Wessex or its internal auditors. Sir Robin Buchanan attempted to borrow money from Sellers to implement the RISP project. He negotiated the WIS contract in Mr. Sellers' favour, but he did not apply elementary audit procedures to Sellers' companies. Sir Robin Buchanan is now chairman of the NHS supplies authority, responsible for £4 billion a year of public money.

The Department had said that the WIS contract should be tightened. It knew that it had not been. The Department did nothing. I understand that one district auditor who reported on RISP to the Department of Health from 1986 to 1989 finally resigned from the service in frustration, sending a file to the Department.

The district auditor said that Wessex should take action against CSL for breach of contract. He said that it should take action against CSL and WIS in respect of neglect and/or fraudulent advice and should recover money paid ultra vires or for work not needed by, and in respect of which no benefit accrued to, the regional health authority. He also said that Wessex should take action against Andersen/IBM; and that IBM should be asked to return part of the money paid for a 3090 computer, bearing in mind that the RHA had a good legal claim against the IBM secondee, Tuffill, who advised against cancellation.

I have, before this debate, tabled a series of early-day motions covering the auditor's main conclusions about the action that Wessex should have taken. To date, all action against IBM and Andersen has been dropped. Ministers have told me in parliamentary answers that this is entirely a matter for Wessex, but Wessex is the very organisation chaired by the very individual with the most to lose from full exposure of these facts in a court of law.

Wessex is now attempting to avoid court action involving WIS and its parent companies, again avoiding exposure and public scrutiny of private settlements. No doubt Ministers will say that this is a matter for Wessex as well, but it is all a convenient means of hiding the truth.

Full exposure would not just hit those directly associated with the Wessex saga. In his report, the auditor criticises the NHS management executive for lack of co-ordination, lack of effective management and project control, little attempt to cost-justify it, and too much reliance on suppliers. Much responsibility for the state of affairs that allowed Wessex to be exploited must lie with the chief executive of the NHS management board. From 1986 to 1989 the chief executive of the board was Sir Leonard Peach, now chairman of the Police Complaints Authority. He had been seconded to that post from IBM, which continued to pay his salary.

The drive to bring business principles into the NHS laid bare the heart of the NHS to business exploitation and a network of influence with close connections to the Conservative party. That, above all, is why everyone has been so anxious to cover up the RISP affair.

The Public Accounts Committee inquiry is welcome, but I believe that an inquiry is also needed into the conduct of Ministers and the Department. I believe that at every stage there were Ministers and officials who were aware of what was happening in Wessex, but did nothing about it. I want an inquiry that will reveal how much the Department knew, when it knew it, who was informed, what advice Ministers gave, what decisions were taken about what, if anything, to reveal, and why so little was done. I want to know tonight whether the Government will encourage and support such an inquiry.

Meanwhile, the people of Wessex should be compensated for what they have lost. Tonight in aging Victorian wards at the Royal South Hants hospital in my constituency, patients will be settling down to sleep in wards that are run down, outdated and impossible to maintain at today's standards. Despite the care that patients receive from staff, those conditions should not exist in the NHS. It would cost £10 million to replace those wards—money that has been wasted on the RISP scandal. Will the Government refund the people of Wessex for what they have lost because of their neglect in recent years?

On 11 February, the hon. Member for Bolton, West told my hon. Friend the Member for Bradford, South (Mr. Cryer): I have every confidence in Sir Robin Buchanan".—[Official Report, 11 February 1993; Vol. 218, c. 762.] Does he still have that confidence? When I raised this matter at Question Time on 23 February, the Minister told me: Waste is something that we do not recognise."—[Official Report, 23 February 1993; Vol. 218, c. 749.] I wonder whether the Minister can now recognise what has been happening in our health service. When the NHS was set up under a Labour Government by Nye Bevan, the idea was that the wealth of the community should be used to banish the pain and suffering arising from ill health. When we see how companies and powerful individuals, who read like the roll call of the British establishment, have got into the NHS and used and manipulated it for their own benefit, we realise how far we have come and how low the Government have sunk.

11.59 pm
The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville)

I congratulate the hon. Member for Southampton, Itchen (Mr. Denham) on his success in the ballot for a debate on the Adjournment of the House. As I know from previous questions of his interest in information systems in the NHS, it is no suprise that he has chosen today to raise the matter of the Wessex regional information systems plan. However, there is no connection between the debate and the announcement of various future monitoring systems for the procurement of information technology in the NHS, made at Health Care Computing 1993. That is the largest such event in Europe, so it is not surprising that I made such an announcement in Harrogate this morning.

Before I reply to the points made by the hon. Gentleman, I think that it is important to make abundantly clear, in case any hon. Members or the public are under any misconception, that those events did not occur yesterday, this year or even in this decade. The matters to which he referred were proposed first by the Wessex regional health authority in the early 1980s, and were developed from 1984 until cancelled in early 1990 by the then new regional general manager of Wessex RHA.

That is not to say that I am trying to, or would, defend what occurred on the project during that period. We do not defend what appears to be a gross mishandling of public money, and neither does the regional health authority. That is why my right hon. Friend the Secretary of State for Health said on 10 February that she welcomed the decision by the Public Accounts Committee to commission a further report on the project for the Comptroller and Auditor General. We believe that it is important that the matters should be studied and lessons learnt. That is also why I welcome the opportunity to reply to the hon. Gentleman on that important matter.

Before I go any further, I must say that the hon. Gentleman has used his parliamentary privilege to cast aspersions on the integrity of a number of people in public life. I found particularly regrettable the mention, which he did not develop, of my hon. Friend the Member for Derbyshire, South (Mrs. Currie) and her work with a certain company. I think that he would not dare repeat several of his remarks outside the House.

Mr. Denham

If the Minister reads the official record, he will see that I put together a conjunction of simple factual statements. I have not repeated certain allegations that were made in 1986 about the hon. Member for Derbyshire, South (Mrs. Currie). Does the Minister agree that the best way to resolve the issues involving that hon. Member and others would be for him to support an independent inquiry into the conduct of the Department of Health, and of Ministers, which I urged on him earlier in the debate?

Mr. Sackville

The hon. Gentleman knows that the Public Accounts Committee will be investigating all those matters.

I do not propose to defend the actions of individuals previously employed by Wessex RHA. As the hon. Gentleman knows, some of those individuals appeared in court in Winchester earlier this month to answer for their actions. I am here to defend the actions of the current management of Wessex RHA, which has devoted a considerable amount of time to ensuring that all factors contributing to that have been fully investigated and that budgetary, financial and management lessons have been identified and learnt.

It is important to remember that it was the current regional general manager, fully supported by his regional chairman, Sir Robin Buchanan, who took urgent action on his arrival in the region to rectify the weaknesses inherited from the previous general manager which were the root cause of the RISP affair. It was these remedial actions that the district auditor commended in his report in the public interest.

The hon. Gentleman suggested that on many occasions the Wessex RHA tried to cover up or suppress the events concerned with RISP. That is rubbish. I remind him that it was the RHA which invited the district auditor to carry out his investigations. It was the RHA which held a press conference in July 1992 to announce the findings of the district auditor. It was the RHA which on several other occasions held press conferences at which it always answered questions put to it. In addition, the RHA and its staff have complied fully with requests from the National Audit Office, the District Audit Service, the Public Accounts Committee and the NHS Management Executive for any information or clarification on matters relating to RISP. I know that they will continue to do so despite allegations to the contrary from sections of the press and the hon. Gentleman. I find the hon. Gentleman's allegations all the more remarkable as I understand that the regional chairman wrote to him in November 1992 offering to discuss his concerns and to answer fully any questions that he wished to put. I am aware that the hon. Gentleman has now taken up that offer to discuss the matter personally.

With regard to requests that Ministers should——

Mr. Denham

Will the Minister note that I accepted the invitation before I knew that I had secured tonight's Adjournment debate?

Mr. Sackville

Indeed the hon. Gentleman did—several months after the offer was made.

I have mentioned the very thorough actions taken by Wessex RHA to rectify the organisational and financial weaknesses where they were found to be the main cause of the failure of RISP. Before I turn to the actions that my Department has taken as a result of this and other problems with computer systems in Wessex, the west midlands and elsewhere, I should mention that legal actions are being taken by Wessex RHA as a result of its and the district auditor's inquiries.

As recommended in the district auditor's report, Wessex RHA has taken comprehensive legal advice. As a result of that advice, the RHA has reached a settlement with one of the computer suppliers, AT and T Istel. It was also decided at that time, on the basis of independent legal advice, not to pursue legal action against Arthur Andersen and Co. and IBM in respect of the contract for three of the five core systems which were to make up RISP. The RHA is taking actions against other companies involved in RISP and it would be inappropriate at this time to comment further on that. I would wish to reassure the House, however, that Wessex RHA is pursuing all avenues for legal redress. In addition, on the basis of the confidential information provided by the district auditor, the Hampshire constabulary has been pursuing its own inquiries into possible criminal charges resulting from the RISP project.

I turn to the actions taken by my Department to seek to ensure that events such as this one cannot be repeated. Earlier, as I have said, I addressed the 1993 conference in Harrogate. I was able to announce a series of measures to be taken to increase our control over future investment in information technology. Before describing them, I would not wish you, Madam Deputy Speaker, or anyone else, to gain the impression that the example that has been quoted is in any way typical of the investment that the NHS has made and makes in IT.

At today's prices, there are about £800 million-worth of computers operational in the NHS. Most of the money spent has gone into operational systems in hospitals such as patient administration systems, pathology and radiology. The majority of these systems are working day in and day out without problem. Unfortunately, things can and do go wrong. The events in Wessex and the west midlands, and unfortunately in the London ambulance service, are the results of what happens when things do go wrong.

There is never any simple explanation. We shall continue to study all the projects to learn from our mistakes. We have already identified some common threads, especially managers and IT professionals losing touch with the end users of systems; unrealistically high expectations; lack of formal project control, including financial control; lack of informed involvement by senior management; and, in some places, a level of IT skills that does not match what is required.

Mr. Denham

The Minister's list is interesting, but it does not include corruption, the use of influence, the use of insider knowledge, close relationships between NHS staff and suppliers of equipment, and the exploitation of those weaknesses by unscrupulous firms. Does he agree that those should also be on his list of what has gone wrong with the health authorities in Wessex and other places?

Mr. Sackville

If any of those allegations are proven, appropriate action will be taken.

Last December I announced the launch of a national strategy for IT. I stipulated that all future IT investments of more than £1 million would be reviewed by the management executive in the Department of Health against explicit criteria. I shall briefly list them—a properly structured business case based on good investment appraisal; a clear plan for benefits realisation; sufficient skilled and experienced IT staff; commitment from the chief executive, board chairman, clinicians, nurses and everyone involved to implementation and benefits realisation; proper project management; an adequately resourced and structured training programme; and a clear post-implementation evaluation of investment. I stress, as I did at the conference earlier today, that not only projects costing more than £1 million will be evaluated against the criteria; I have asked all authorities approving all substantial investments to use them.

I reiterate my appreciation to the regional chairman and the regional general manager of Wessex for their considerable efforts both in dealing with the affair and in the efficient and effective way that the health service is managed in Wessex. I have every confidence in Sir Robin Buchanan as chairman of the Wessex RHA and, indeed as chairman of the supplies authority. Only with his strong backing has the regional general manager been able to take the necessary actions, so commended by the district auditor, to rectify the weaknesses that led to the events mentioned in the debate. I have full confidence in the work that they and the authority have done to investigate these matters fully.

Question put and agreed to.

Adjourned accordingly at twelve minutes past Twelve o'clock.