Eighty-five ex-employees of a privatised NHS consultancy who lost their pensions when it went to the wall have reached a settlement - but the fight goes on for those still awaiting justice. Patrick Butler reports

'It's a public disgrace.' Victims of the NHS's own pensions scandal are still angry, even after settling for an estimated£4m pay-off.

Their eight-year battle for justice may be over, but former staff of the privatised NHS consultancy Qa Business Services who lost their pensions when the company went bankrupt are frustrated that they won compensation representing only 70 per cent of their losses.

And the 85 former employees who received a settlement are determined that the fight must go on to win recompense for former Qa staff not covered by last month's settlement.

If the NHS Executive felt that it could now withdraw elegantly from the sorry affair, it appears to be mistaken.

The picture drawn of West Midlands regional office and its predecessor regional health authority by ex-Qa staff is of officials desperate and determined at any cost to avoid political embarrassment.

'The high morals expected in the public sector were nowhere to be seen.

There was no honour. It's a public disgrace, ' says Les Gwinnett, an ex-Qa information technology specialist (now happily back in the NHS), who has been a key figure in the pensions battle.

Qa was a product of its Thatcherite times. The management services department of West Midlands RHA, it was privatised amid much fanfare in 1989. 'The company [Qa] will benefit from commercial disciplines and opportunities, ' boasted the then junior health minister, Roger Freeman.

Unfortunately, commercial disciplines meant it went bust in 1991. It turned out that there were insufficient commercial opportunities. What could have been made clear if the case had gone to court is how far the RHA knew that the demand for its services among health authorities in the region was unsustainably low.

Some Qa pensioners believe that the RHA knew that in the new world of trusts seeking to develop their own management services, Qa was not viable. The RHA, they believe, saw privatisation as a chance to avoid the hefty pay-offs required if it was to dissolve the department itself, as well as win political brownie points.

When Qa did call in the receivers, the shock to staff was mitigated by the belief, encouraged by the RHA, that their pensions, which had been transferred from the NHS to Qa, would not be affected.

The next eight years would prove how wrong they were, as they embarked - with the help of trade unions MSF and Unison - on a long and tortuous attempt to prove that the RHA was obliged to recompense staff for loss of pensions.

Mr Gwinnett says that he was particularly annoyed by the 'vindictive' way in which the RHA and its regional office successor acted towards him.

'I recall one senior manager told us they had no moral or legal obligation, and that we should have been grateful for being given the opportunity to work for the private sector.'

RHA barristers told him 'they had got mountains of evidence and they had a pit of money to fight us with. I had to stop myself saying: 'That's public money, money for patient care you are talking about.'' The bitter irony, believe Qa pensioners, is that the bill picked up by the NHS Executive last week, together with the resources expended over the last eight years in fighting the claims, is far greater than the cost to the RHA had it settled back in 1991.

The battle has also taken a physical and mental toll on the participants.

Graham Cotton rejoined the NHS four weeks after Qa collapsed. He left it last January on health grounds. He estimates that even after the settlement he is still£50,000 out of pocket. He suffers from stress-related anxiety and says the last eight years have been 'absolute hell'.

The Qa affair is blamed on the Conservative government of the time.

But there is anger among Qa pensioners that the Blair administration has been so slow to act. 'This government sets itself up as being for fairness. It has castigated private companies for mis-selling pensions but dragged its heels on this. Yet this was a case of pensions mis-selling by a government department, ' says Mr Gwinnett.

Many individuals mis-sold private pensions in the 1980s have been recompensed in full. The Qa settlement looks even weaker when compared to similar public sector cases in which staff in privatised civil service agencies which went bust have been returned to the civil service pension scheme without loss.

The NHS Executive issued a statement at the time of the settlement; no regret was expressed about the pensioners' near decade-long ordeal: 'This is the end of a long legal process.

Ministers wanted to wait for legal views and the weight of legal argument, and when this became clear it was decided to settle the matter. They listened to advice and the settlement is weighted in favour of the pensioners while protecting the public purse.'

It is worth recalling that junior health minister Gisela Stuart admits she was 'politicised' by the abuse of pension funds by companies in the late 1980s, and gave up her career as a bookseller to become a pensions researcher at, of all places, Birmingham University in 1993.

'It made me realise that you can do all sorts of work behind the scenes, but if you want to make real changes, you have to be on the inside at the heart of legislation, ' she said, explaining why she wanted to become an MP.

Ex-Qa staff may be forgiven for having expected greater things.