NHS: Shared Business Services

Lord O'Shaughnessy Excerpts

Tuesday 27th June 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)]

My Lords, with your permission, I shall now repeat the Answer to an Urgent Question given in another place by my right honourable friend the Secretary of State for Health on NHS Shared Business Services. The Answer is as follows:

“As the House knows, on 24 March 2016 I was informed of a serious incident involving a large backlog of unprocessed NHS patient correspondence by the company contracted to deliver it to GP surgeries, NHS Shared Business Services, or SBS. The backlog arose from the primary care services GP mail redirection service that SBS was contracted to run. None of the documents was lost and all were kept in secure storage, but my immediate concern was that patient safety had been compromised by the delay in forwarding correspondence, so a rapid process was started to identify whether anyone was or had been put at risk. The Department of Health and NHS England immediately established an incident team.

All the documentation has now been sent on to the relevant GP surgery, where it is possible to do so, following an initial clinical assessment of where any patient risk might lie. Some 200,000 pieces were temporary residence forms and a further 535,000 pieces were assessed as low risk. A first triage identified 2,508 items with a higher potential risk of harm, of which the vast majority have now been assessed by a GP. Of those, 84% were confirmed as no harm to patients and 9% as needing a further clinical review. To date, no harm has been confirmed to any patients as a result of this incident.

Today’s National Audit Office report confirms that patient safety was the department’s and NHS England’s primary concern. But, as well as patient safety, transparency both with the public and this House has been my priority. I was advised by my officials not to make the issue public last March until an assessment of the risks to patient safety had been completed and all relevant GP surgeries informed. I accepted that advice for the simple reason that publicising the issue could have meant GP surgeries being inundated with inquiries from worried patients which would have prevented them from doing the most important work: namely, investigating the named patients who were potentially at risk.

A proactive statement about what had happened was again not recommended by my department in July for the same reasons, and because the process was not complete. However, as I explained to the House in February, on balance I decided that it was important for the House to know what had happened before we broke for recess, so I overruled that advice and placed a Written Statement on 21 July.

Since then, the Public Accounts Committee has been kept regularly informed, most recently being updated by my Permanent Secretary in February. The Information Commissioner was updated in August. I committed in July 2016 to keeping the House updated once the investigations were complete and more was known, and will continue to do so”.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for repeating that. Clearly, this is a serious matter. More than 700,000 letters with patient information were waylaid, with more than 1,700 cases of potential harm to patients. The correspondence lost included blood test results, cancer screening appointments, medication changes and child protection notes. I will put just three quick points to the Minister.

I noticed that the Secretary of State, in this Statement, referred a lot to advice that he received from civil servants. I find it rather odd that a Secretary of State should announce to Parliament the advice given by civil servants, which usually is not disclosed. Why can he not stand on his own two feet in relation to the decision made to delay an announcement to Parliament by four months? Secondly, I am still not clear from the Statement why such a perfunctory Written Statement was made the day before Summer Recess last year. Why was a full Statement not made?

Thirdly, I understand that Shared Business Services makes £80 million a year from this NHS contract, and that so far the exercise of trying to discover where the letters have gone and to put this right has cost £6 million. Can the Minister confirm that the entire cost will be paid by Shared Business Services? Can he also say what other penalties the company will pay? Finally, the NAO points out that the Secretary of State has a conflict of interest, as he is a major shareholder in this outsourced company. Is this why he was so reluctant to come to Parliament to give information?

[Lord O'Shaughnessy]

I will answer the noble Lord’s four questions. The first was on taking advice from officials. I think the noble Lord would probably be alarmed if the Secretary of State was not taking advice from officials. That should be welcomed. It is clearly the case that he was thinking on his own, because he took the decision to follow that advice in the first instance in March, but was of the view by July that enough was known and that it was important to update Parliament before recess.

The second question was about the timing of the Statement. The noble Lord will remember that summer 2016 was a reasonably busy period after the EU referendum. The main point here is that the Statement was made before recess and was not held back until the autumn. As regards NHS Shared Business Services and the consequences for it, those consequences have been severe: it no longer has this contract and will, as my right honourable friend confirmed in another place just now, pay its share of the costs.

Finally, as my right honourable friend said, it could appear that there was a potential for conflict of interest, but in his view there was not one, because at all times—as confirmed in the NAO report—patient safety was the driving force behind the actions of the department and NHS England. It will always be the case, whatever arrangements the department has with an ALB—whether a standard agency, a joint company or whatever it is—that patient safety must come first. That was confirmed in the NAO report today.

[Baroness Walmsley (LD)]

My Lords, as I understand it, that Statement on the last day of term before the Summer Recess last year was one of 30—which implies to me that the Government consider the last day of term to be a very good day to hide bad news.

The Minister suggests that the company, or its shareholders, will have to pay its share of the costs of investigating this scandal. Can he assure us that the NHS will not be out of pocket, particularly in the light of the fact that the loss is not just financial? A lot of doctors and various officials, in both the department and trusts, have had to spend a great deal of their time looking into this—and, of course, time is money. Will this scandal actually cause the Government to be a little more cautious in future when they claim that putting health services out to private companies always gives better value to the taxpayer and the NHS?

[Lord O'Shaughnessy]

The noble Baroness will know that I was not in post at the end of last summer, so I cannot explain why there were the number of Statements that there were. I know that Governments of perhaps different hues have also tended to put out Written Statements, so I do not think any political party is entirely innocent in this regard. The point is that the information was made available to Parliament.

On the point about cost settlement, there are interested parties here and the costs need to be settled once we have got to the bottom of exactly what has happened and once those inquiries and indeed the investigations into the potential for patient harm have been settled. I underline that as yet no instances of patient harm have been discovered.

Finally, the point about privatisation is quite an important one. The noble Baroness will know that the private sector is involved in the delivery of all parts of the NHS. Breach of contract, which is what this is, and the covering up of mistakes happen in all parts of the health service—public, private, shared and all the rest of it. It is not a case of “private sector bad, public sector good”: we know that from instances like Mid Staffs and so on. The core point is that we need very strong data security standards, and that is why the Government will be responding in due course to the Caldicott review and the review of these issues by the CQC.

[Lord Reid of Cardowan (Lab)]

On one of the points the Minister responded to, perhaps I may politely offer him a piece of advice. Everyone here knows that officials advise and Ministers decide—but it is not convention, protocol or indeed courtesy to announce in Parliament that advice has been given by Ministers’ officials and he has decided to overrule it. That is not just a matter of useless etiquette; it is a fundamental aspect of maintaining the trust between Parliament and the Minister and between the Minister and his officials, which will serve him well in future.

[Lord O'Shaughnessy]

I take the noble Lord’s advice very seriously. Indeed, I note that he, as a former Secretary of State for Health, understands what is going on and the dynamics within the department. I would say only that the NAO report has described a set of actions that have taken place and why they have taken place. It has described the decision-making process, which is why the Statement responds to the content of the NAO report as it was set out today.

[Lord Tugendhat (Con)]

Could I press the Minister further on shared costs? Why is the company paying only some of the costs? Is the NHS paying the rest of the costs or is there some other body, public or private, that is going to put up some of the money? It is difficult to understand why the company is not paying the whole of the costs.

--- Later in debate ---

[Lord O'Shaughnessy]

To date, the cost of dealing with this problem is around £6 million. Clearly there is a contractual relationship between NHS SBS and various bits of the NHS. It needs to be established clearly, independently and objectively where the culpability lies for any incurrence of costs, both with the problem in the first instance and in dealing with it. Once that has been established, costs will be fairly and correctly apportioned to whoever caused the problem in the first place.

[Lord Clark of Windermere (Lab)]

Has the Minister seen the reports that managers moved many of the documents out of sight and actually destroyed many of them? If that is the case, it is very serious. If it were a wholly private company, its directors would be suspended pending investigation. If it is the case that documents were deliberately destroyed, will the most serious action be taken against the directors of that company?

[Lord O'Shaughnessy]

Clearly, if there were such an incidence, the noble Lord is quite right that it would be dealt with very strongly—but it is important to point out that there has not been evidence that that has happened. Documents were destroyed that sat within SBS, but they were not part of the backlog and they conformed, as we understand it, to the protocols around destroying old papers when they have gone past a certain time limit. So there is no evidence that what the noble Lord described has happened in this instance—but, as he points out, if it had happened it would be of the utmost seriousness.

[Lord Patel (CB)]

My Lords, what is the governance mechanism of this joint private venture? Considering that one of the key tasks is to deliver letters and patient reports in a timely manner to GPs’ surgeries, what risk assessment was made during the process of the work?

[Lord O'Shaughnessy]

Yes, this specific case was a joint venture between a private company and the Department of Health, which has a share and director places on the board. The department had a director on the board of this joint venture throughout. Part of the problem was that the issue of this unacceptable practice was not brought to the attention of the board until far too late in the process. That is obvious from the timeline that has been set out. The particular issue about redirection is no longer the case. Mail is now returned to sender if it is not delivered, rather than creating opportunities for the things going wrong that happened through this redirection service.