A review undertaken by six councils in south-west London has criticised the NHS for failing to hold individuals to account for financial mismanagement at Croydon Primary Care Trust.
Councillors on the joint health overview and scrutiny committee called for the health secretary to compel Caroline Taylor, who was chief executive of the now defunct organisation, to answer questions about how a £22m overspend arose. Ms Taylor refused to appear before their committee.
They also demanded power to ensure NHS officers can be compelled to attend similar scrutiny panels in future.
Six boroughs – Croydon, Merton, Richmond, Sutton and Wandsworth London borough councils, and the Royal Borough of Kingston upon Thames Council – formed the committee in September 2012 to consider how the accounts had been misstated by at least £28m.
When the PCT’s accounts were signed off in June 2011, they showed a £5.54m surplus. In fact, there was a £22m deficit.
The councillors also criticised the refusal of the PCT’s finance director Stephen O’Brien and interim director of finance Mark Phillips to appear before their committee. They also questioned the professional competence of the PCT’s financial management at the time and urged successor clinical commissioning groups to review the qualifications of staff who are responsible for budgets.
Committee chair Jason Cummings (Con), a councillor in Croydon, 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 [which investigated Croydon PCT’s finances on behalf of NHS London] 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 joint committee disputed NHS London’s claim that the misstatement of accounts arose from systems failures alone. It also demanded the health secretary granted health scrutiny committees the power to force NHS officers to co-operate fully in future investigations.
In response, a DH spokesperson said the issue had already been investigated by Ernst and Young.
“They examined more than 600,000 individual items of evidence over a period of one year and found no individual was to blame, but instead the failings were due to poor systems and controls which failed to pick up on errors made,” the spokesperson said. “At the time NHS London wrote out to the NHS to ensure lessons are learned and acted upon to prevent this happening again.”
Information provided to HSJ and Local Government Chronicle