CROYDON COMMENTARY: With tens of millions of NHS cash not properly accounted for, ANDREW PELLING asks why Croydon’s Conservative MPs and councillors are not doing more to protect their constituents’ health care
A public inquiry into the mystery of the £22 million budget deficit at Croydon NHS heard this week that some senior board members supported a culture that opposed the thorough analysis of the organisation’s finances and performance.
The South West London Joint Health and Overview and Scrutiny Committee, to give it its full title, met at Kingston’s council offices on Monday night where David Fitze, the Conservative councillor for Fairfield ward, came in for specific criticism for his role in the running of Croydon NHS.
With £8 million docked from local NHS spending in Croydon last year to pay back some of the missing money to the Treasury and up to £18million of dues to be foisted on a new GP-led body running Croydon’s health services, the inquiry was worried that Croydon people are being denied proper standards of health care.
The financial attack on Croydon’s health service must make Inside Croydon‘s loyal reader ask why Croydon’s MPs are so quiet on this issue. Cowes Week finished back in August, after all.
The inquiry’s key witness this week was John Power, who was the chairman of Croydon NHS’s audit committee from April 2007 until July 2008, when individuals’ and institutional resentment of his detailed follow-up of budget and performance issues caused him to leave.
Power, a Purley resident, came across as a credible witness. A retired Parachute Regiment colonel, a successful businessman at BAE Systems and Hawker Siddeley, Power moved into the public sector as part of Margaret Thatcher’s search for private sector expertise in government when he became a finance director in the troubled Ministry of Defence, dealing with procurement.
Power has that ram-rod straight back that inspires men into battle. Some, though probably not those in Taberner House, might hanker after a Power review of Croydon Council’s financial management.
Fitze had to stand down from his first sojourn as Croydon NHS’s audit committee chairman because of a Labour government requirement for such appointees to have relevant financial qualifications. Monday’s evidence suggested that Fitze resented Power’s appointment as the chair of the audit committee.
Power encouraged cross-referencing of reports to monitor progress and widened reporting to the audit committee to include budget heads in addition to the finance director. Power said that he appreciated that “some might have felt uncomfortable with my level of challenge”.
Power said that he found the Croydon NHS Primary Care Trust board unwilling to track performance changes. Such attempts at follow through was regarded as rather poor form within the Croydon NHS culture and Power told the inquiry that some resentful members of the audit committee abstained from meaningful participation in deliberations.
Power referred to back-biting behind the scenes with some “manifesting unhappiness”, obliquely referring to Fitze and the trust’s finance director, Stephen O’Brien, while Power said he received support from other trust directors.
Clearly sympathetic to Croydon NHS chair, Toni Letts, a Labour councillor, Power referred to a clique-ishness within the Croydon NHS and the three Croydon councillors on the board that also included Labour leader Tony Newman.
Power left Croydon NHS to volunteer his services to Surrey and Sussex NHS Trust. The less-qualified Fitze was re-appointed to chair the audit committee of an organisation that eventually discovered that there was £22 million for which it could not account.
In damning words Power said, “the previous audit chair, who had been required to stand down as unqualified, was then re-appointed as chair of the audit committee that presumably settled down to the more comfortable arrangement that had preceded”.
While Power accepted that any audit committee would likely not have discovered expenditures that were simply not recorded, he felt that any well-led audit committee would have picked up general trends of overspend. He felt that professional staff – there were internal audits, external audits and approval by London NHS – must have known that things were going astray, although he recognised “a state of turmoil” in the uncertainty created by NHS re-organisation distracted officials’ attention to such key matters as following where public money was being spent.
Ann Radmore, South West London NHS chief executive, in her second appearance before the committee, told the inquiry that it had become apparent when she took up the reins during re-organisation of London’s NHS that “Croydon NHS was living beyond its means”.
Ernst & Young, the very well-paid accountancy consultants brought in to look for the missing money, were not asked for their £1 million fee to investigate whether the monies had gone astray in earlier years.
Radmore was unable to pinpoint where the overspends had been incurred. Oddly the inquiry committee did not pursue any line of questioning on whether any of the expenditures had been inappropriate or corrupt. Bearing in mind the poor financial recording highlighted by whistleblower Dr Peter Brambleby, Croydon’s former director of public health, jointly appointed by Croydon Council and the PCT, and the scandalous misspending by Dr Ravi Sondhi at Croydoc, this lack of curiosity seems to be a weakness of the inquiry to date. It’s unlikely that Colonel Power would approve.
So far, £8 million has been clawed back through “efficiencies”.
Radmore was resolute in not conceding that patient care in Croydon had suffered as a consequence (had she not seen the CQC’s reports about Mayday?).
Disturbingly, Radmore asserted that the new Croydon Commissioning Group of GPs has a leading – though unnamed – doctor who thinks that the missing money was good news as it pushed Croydon local health services into better, cheaper practices earlier than other parts of the NHS, which will have to deal with a freeze in real terms while dealing with increased demands.
At the meeting, Radmore revealed the extra costs that South West London’s NHS faces as a result of the government’s shake up of the NHS: £10 million, to pay redundancy costs and for break clauses on vacated rented properties. Insiders suggest that the cost of the NHS privatisation by stealth may run to twice that amount.
A marvellous but distressing bureaucratic euphemism was used by Radmore to describe the additional financial pressure of ” acute over performance on contracts”; translated into English, this would usually be understood as people getting ill and going to their doctors.
Radmore said that the worse case scenario was that the new Croydon Commissioning Group of GPs would inherit a legacy of £18 million to pay back to government out of money meant to be spent on Croydon people’s health care.
Radmore said that she would lobby for much of this shortfall to be forgiven and in addition said that if the government switched to using the 2011 census to allocate money, Croydon’s NHS would get a better settlement reflecting more effectively its larger than previously estimated population.
The latter comment is probably a clue to why Croydon overspent in the first place: not enough money for too many people and a NHS foolishly Balkanised by national politicians. Of course, if Croydon’s sitting MPs weren’t too busy with foreign affairs or running someone else’s election campaign, they might actually be doing their jobs, of representing the interests of their constituents. And then they might be demanding that NHS services should be funded based on actual population numbers, and that Croydon NHS should not be fatally encumbered by the huge payback requirement that must be limiting Croydon people’s access to health care.
Meanwhile the inquiry, which sits again on November 7, will need to ask those who ran NHS Croydon to justify the retrograde step of appointing an unqualified audit committee chairman, in contravention of NHS and appointment commission regulations.
Taxpayers would expect qualified scrutiny of the spending of their money. Something went badly wrong in Croydon. The government is clear on the NHS: just having some ill-defined business experience may be thought adequate for an ordinary non-executive director but an audit committee chair has to have substantial, recent and relevant financial experience of running a large complex operation.
If personal relationships complicated matters, as Power alleged, then this inquiry, launched as a piece of political theatre by Conservative council leader Mike Fisher on the cruel calculation that his colleague, Fitze, is dispensable, may yet come back to question his own governance of Croydon.
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