Feeds

PAC slams exclusive DoH deal

Where was the tender process?

5 things you didn’t know about cloud backup

The Department of Health ignored procurement guidelines and pursued a back room deal with an informatics company, according to a committee of MPs.

Parliament's Public Accounts Committee (PAC) has criticised the Department of Health for agreeing a joint venture with health informatics company Dr Foster without putting the deal out to tender.

In a report published today, the influential committee says the department failed in its duty to be open with Parliament and the taxpayer because the deal went ahead without being fair and open competitive, and contrary to public sector procurement guidelines.

High quality data on NHS performance is central to the government's reform agenda and in April 2005 an arm's length body, the Health and Social Care Information Centre, now called the Information Centre, was set up to improve the collection, analysis, and use of health and social care information. But the Department of Health recognised that the Information Centre lacked some of the necessary skills and expertise and decided that the quickest way of acquiring these skills was a partnership with the private sector.

It entered into exclusive discussions with Dr Foster, a health informatics specialist, without any attempt to identify other possible providers, the report says.

KPMG advised the department that Dr Foster had an indicative valuation of between £10m and £15m. But in February 2006 the Information Centre paid £12m for a 50 per cent share of the joint venture company, Dr Foster Intelligence. This was 33 per cent to 53 per cent higher than its financial advisers' indicative valuation of a half share, and included an acknowledged strategic premium of between £2.5m and £4.0m.

Edward Leigh, chair of the committee, said: "Without the competitive pressure inherent in a tender process, the department's Information Centre simply cannot demonstrate that it paid the best price for its 50 per cent share of the joint venture.

"Certainly, the £12m that it paid, £7.6m of which went straight into the pockets of Dr Foster's shareholders, was between a half and a third higher than its financial advisers' evaluation."

The report concludes that the department should remind its non-departmental bodies and Commercial Directorate that best practice is to advertise such opportunities appropriately, and to offer health informatics work to open competition.

This article was originally published at Kablenet.

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

Build a business case: developing custom apps

More from The Register

next story
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
Felony charges? Harsh! Alleged Anon hackers plead guilty to misdemeanours
US judge questions harsh sentence sought by prosecutors
This'll end well: US govt says car-to-car jibber-jabber will SAVE lives
Department of Transportation starts cogs turning for another wireless comms standard
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?