So, a public body “loses” tens of millions, yet no one is responsible? ANDREW PELLING attended the latest session of the south-west London NHS scrutiny committee

Lawyers, paid for out of precious NHS funds, have been hired by senior health service officials to stonewall and threaten a public scrutiny committee that is trying to discover what happened to £22.7 million of public money that has somehow, somewhere, been lost in the accounting process.

Councillors drawn from Croydon and four other boroughs to sit on the “South West London Joint Health and Overview Scrutiny Committee” met on Monday night and revealed that they have received a threatening letter from the NHS’s lawyer. NHS officials are seeking legal protection from helping the committee, preferring to give greater importance to “duties of confidentiality”, and avoiding being held to account in public.

But through astute questioning by the scrutiny committee’s chairman, Croydon councillor Jason Cummings, it was discovered that there is a great deal that is rotten at the heart of the NHS in Croydon.

The scrutiny committee was originally set up by the Leader of Croydon Council, Mike Fisher, many suspect as an attempt at a piece of petty point-scoring political theatre. Tens of millions of pounds of unaccounted liabilities in local health spend were accumulated under the stewardship of a Croydon Primary Care Trust board that was chaired by Labour councillor Toni Letts and had the Leader of Croydon Labour, Tony Newman, on the board as well.

The scrutiny committee was instructed to find out what went wrong, and on Monday it staged a public meeting at Sutton Civic Centre.

There, we went over how unexplained invoices for the financial year 2010-2011 emerged in the subsequent year, after Croydon NHS had already started to be wound up under the government’s NHS re-organisation.

It seems plausible to assume that some people somewhere had been disguising accumulated overspends on much-needed health care, using the sort of “creative accounting” of which investment bankers would be proud. A £1 million, six-month-long investigation commissioned by NHS London and the newly empowered NHS SW London was conducted by Ernst & Young, which found serious process problems. But they preferred to blame systems rather than people.

Jason Cummings: astute questioning

But the scrutiny committee is discovering that matters may go deeper than clever accounting and public officials asserting that they are not accountable because of the law.

And while Fisher probably thought he had Letts and Newman in a snare, unfortunately he was also catching fellow Conservative councillor David Fitze in the trap, as he was chairman of Croydon NHS’s audit committee at the time.

The questionable accounts came through Fitze’s committee. Fitze, though, has never been regarded by Croydon’s Conservative leadership as being entirely sound or straightforward. He may be “collateral damage” worth taking as far as Fisher is concerned.

Monday night’s meeting was treated to an exquisite rendition of attempted whitewashing. The recitation that “it was the system that was at fault” was oft repeated. Nothing so gauche was done as to name an individual or individuals as being at fault.

Another very common excuse was also employed. Changes in senior management meant that we got the usual mantra that lessons had been learned, but sorry, you can’t talk to any departed officers who might be the miscreants.

The new NHS SW London chief executive (and thus the Croydon NHS chief executive) Ann Radmore started off in very determined mood. She was not going to name any individuals. She had her lawyer sitting next to her. It was like some US Senate hearing, but in the stifling heat of the Civic Centre.

The committee chairman talked of a “letter that looked like a threat” from her lawyer.

Radmore’s publicly funded lawyer even had the temerity to address the committee directly, warning that his client would have to be satisfied as to the reasons why the scrutiny committee needed to ask specific questions in their inquiry, before deciding whether it was appropriate to respond.

The arrogance of that position prompted Gareth Evans, of Richmond Council, to suggest that an unaccounted for £22.7 million of public money was a good enough reason.

But no, the lawyer said that they risked breaching confidentiality and, most unconvincingly, angering the toothless Information Commissioner in breaking the Data Protection legislation.

David Fitze: collateral damage?

The NHS chief executive said she would let her current finance director attend a scrutiny committee session, but no one else. The previous CEO, Caroline Taylor, had already declined to attend.

Radmore, somewhat haughtily, told the committee to spend its time on looking at what the impact of mislaying the money was, not on where the money went and who sent it where. It is as if the non-accountability of public officialdom is even worse in the NHS than in local government.

The committee seemed to accept the view that Radmore, who had signed off the accounts with the £22.7 million black hole, could not have been expected to be able to pick up anomalies in accounts just one month into taking up her job, as the government threw the organisation of the NHS up in the air. She felt that in future NHS officials should not be put in that impossible position of signing off old accounts in an NHS where tenure of office is changing fast with radical re-organisations taking place.

Ernst & Young had taken six months to investigate the matter, so a few more hours by her looking at the accounts or a better effort by the Councillor Fitze-led audit committee would not have found its way into the complex hiding of money flows.

No one on that audit committee was doing audit now, Radmore assured the scrutiny committee, but there had been no change in practice as regards recruiting suitably qualified members of the SW London NHS audit committee.

Croydon NHS had been given light touch audits as it had a reputation for financial excellence. It all sounded as if Croydon NHS was the Enron of NHS trusts. Good at bigging up its financial reputation whilst posting false accounts.

As Radmore relaxed under questioning, she did concede that people within Croydon NHS had been involved in “deliberate actions” as regards the budget.

“These things did not happen in a random way. Numbers had to be written on the various appendices and things that made up the accounts,” she conceded.

None of those involved in these non-random acts were now employed by the NHS, although the scrutiny committee discovered from another witness that this did not mean that they were not still paid by the NHS, no longer as staff but in some instances as “consultants”.

As regards the Ernst & Young report, Radmore felt that her “reading of the report is that it was clear actions were taken by someone consciously. But these actions did not create the deficit”.

Radmore said that she felt that there was one specific guilty party and that accounting problems might have gone beyond hiding the deficit. What was clear was that the chief executive said was that she was not at liberty for reasons of confidentiality to say as to whether anyone left as a result of the misleading “deliberate actions”,

It all sounded as if there had been confidentiality and compromise agreements with those who were obliged to walk the plank, and that this was as far as Radmore, and her NHS-funded lawyer, were prepared to go.

Through good questioning though, Councillor Cummings did find out that no one had been formally disciplined or dismissed over the unaccounted for millions.

All terribly English and very civilised.

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