A private provider has been slammed in an internal Department of Health report for its management of an NHS diagnostics deal - but local trusts were also criticised.

The report, obtained by HSJ under the Freedom of Information Act, criticises Atos Healthcare's administration, level of clinical supervision and equipment. But it also says the NHS provided incomplete data on some of its referrals.

The deal was to provide ultrasound and MRI scans for eight primary care trusts in the North West. After the ultrasound deal was suspended in February and the MRI deal in March, two larger contracts for the whole region and the South West were held off. Seven women were recalled after ultrasound scans.

In July, health minister Ben Bradshaw said the bigger contracts would not go ahead because Atos was 'not in a position to deliver the services to the agreed timetable'.

The report on the North West contract, by DoH commercial directorate medical director Dr Richard Dale, says the firm's use of spreadsheets to record patient ultrasound data was 'inadequate' for the complexity of the task and led to a 'failure of safe and comprehensive patient record-keeping'.

It says there was not enough supervision of ultrasound service staff and no clinical or technical lead, leaving sonographers without access to specialist expertise. Most sonographers' reports were not authorised by a radiologist before going to referring clinicians.

Ultrasound equipment was also criticised. An independent DoH-commissioned audit found 43 per cent of images were not good enough to draw correct conclusions. However, the audit concurred with the original sonographer's report 'in the majority of cases'.

Staff practice should also have been better. 'The examination protocols were not appropriate to ensure there was a structured approach to scanning and images to be recorded,' it says.

The local NHS was also criticised. While some data was not inputted by Atos, this problem was 'compounded by the poor data quality provided with some referrals' by the trusts.

The report said ultrasound referrals made in batches 'created an administrative backlog'.

Atos Healthcare's submission to the DoH, by its NHS diagnostics programme general manager Alan Hodgkinson, said referral forms from PCTs were 'often incomplete and hard to read'.

The amount of information PCTs asked Atos to record for each patient was 'added to significantly' by the trusts after work had started in December last year, making it 'increasingly unmanageable'. No initial agreement was made between the DoH and Atos on what should be recorded. The requirements 'should have been clearly communicated and agreed by all parties' before the service began, Mr Hodgkinson said.

Dr Dale said he did not find 'any serious issues with examination and technical radiological reporting' for the MRI scans.

But recording of demographic information and examination completion dates showed inconsistency, and triage before examination did not obtain enough patient data.

A DoH spokesperson said: 'There are robust procurement and contract-management procedures in place for all contracts with the independent sector. [These] ensured that issues with service delivery were identified and dealt with.'

Atos said it co-operated fully with the DoH to produce the report. 'We are pleased to see that the early service delivery report confirms that no patients needed to be recalled for MRI scans. The radiological report supervised by the ultrasound clinical guardian concurred with the original Atos Healthcare sonographer's report in the majority of cases.'

NHS North West said it welcomed the report. 'As soon as it became apparent that there were problems with the service, we took immediate action.' Important lessons had been learned, it said.