London Eye: The Lloyds Bank £56m

Appointments limbo and breast cancer

The Department of Health and Social Care has been sat on several key London appointments for months now, most notably a new substantive regional director. There hasn’t been one since former Royal Free boss Sir David Sloman took up the national chief operating officer job.

After some prompting, the regional team confirmed his was a permanent move, rather than a temporary secondment which might see him return to lead London.

Sir David’s successor at the Free, Caroline Clarke, was chosen months ago now to take up the NHS England London regional director role, London Eye understands. But the hold-up seems to be at Richmond House.

North central London’s Helen Petterson has been covering the post since the start of 2023, and it’s been quite an eventful time to do so.

Group A Strep, unprecedented pressures on accident and emergency plus industrial action on a scale not seen in the NHS for a generation.

Meanwhile, another tier of the capital’s NHS structure also has unfilled leadership roles.

The successor to Millie Banerjee as chair of the South West London Integrated Care Board has, similarly, been picked but not approved in government.

Ms Banerjee left over the fallout from an employment dispute at another organisation she chaired, NHS Blood and Transplant.

The sub-regional tier matters. Because even with London’s dozens of boroughs squeezed into five enormous ICBs, there are significant variations at “place” borough level.

For example, data put out by the Mayor’s office shows eight of London’s boroughs (about a quarter) screening less than half of their eligible population for breast cancer.

The national picture has declined since 2008 sure, but London’s fall was only slightly smaller and from a lower base. And half of these less than 50 per cent boroughs were in north west London. Not the parts of NWL you might expect either, but the wealthy, inner London boroughs. Hammersmith, Fulham, Kensington & Chelsea and Westminster had by far the lowest rates.

These aren’t postcodes that usually struggle to access services. And there aren’t many access measures on which Barking & Dagenham outperforms Kensington & Chelsea, but this is one of them.

Breast cancer screening is commissioned by NHSE London but there was no comment from them as this piece went to press. The ICB said it was working with RM Partners, the local cancer alliance, to try and understand the barriers to access.

Breast cancer is fourth biggest cause of cancer death in the UK. The decline in screening rates in the capital is such that the Mayor’s office has started to include it in its benefits package for staff.

One fire and a £56m invoice from Lloyds’ people.

The good news is Lloyds Banking Group don’t seem to have equity in any NHS PFI schemes other than the Whittington.

The bad news is that, at the time of writing, administrators acting on behalf of those owned money by collapsed PFI firm Whittington Facilities Limited (ie. Lloyds) were still pursuing the trust for £56m.

The now-collapsed construction firm Jarvis built the PFI wing of the north London DGH in 2008, and all appeared well until a blaze in 2018 which saw an investigation of the fire-safety features of the new facilities.

The Whittington say this revealed significant faults, both in the construction and maintenance, and it withheld its regular payments to WFL. The administrators say this caused the collapse of the company, although the company’s accounts in 2018 say making the required changes would “cast doubt on its future ability to trade as a going concern” – ie, we might not have the money to fix the problem.

And that’s kind of the whole point of paying through the nose for a PFI.

Yes, it’s very expensive, but the risk has been transferred, right?

In this case, it appears that not only has the risk remained with the NHS – who will pay the more-than-£56m the trust estimate remedial works will cost? – but the principal creditor, Lloyds Banking Group (bailed out by the public 15 years ago), wants its money back from WFL.

According to the latest Treasury data (from 2018), the public owes the Whittington PFI firm £81.3m from 2023-24 to the end of the contract in 2034-35. Given the cost of making the Whittington safe (in the interim and permanently), it would seem perverse if this public money went instead to a bank. LBG’s due diligence apparently did not extend to checking that the firm which they (and a subsidiary) lent more than £80m to had enough capital to run a fire-safe facility.

The fact that WFL did not seem to have the wherewithal to meet fire safety regulations, and that this only became clear after a fire, is worrying on its own. But this is a very small PFI in the scheme of things.

Of the 128 projects that the public is still paying off in the health sector (just £46.2bn left to go by 2049-50), how many might also collapse if their PFI firm was handed a fire-safety costs estimate?

So, even if no other PFI firm’s creditors decide to sue the NHS (and on the 2018 data, Whittington was the only NHS scheme that Lloyds had equity in), trusts could still face massive bills and large-scale disruption if the PFI companies turn out not to have the cash to make buildings safe.

Whose job is it to check they do?