www.nhsexpose.co.uk

PricewaterhouseCoopers St George's NHS Trust External Auditors

Simon Sharp Of PricewaterhouseCoopers    

PricewaterhouseCoopes were for the financial year 2001/02 and for several years before that the external auditors of St George's Healthcare NHS Trust.  Their appointment was made by the Audit Commission and they act like a public watchdog on NHS Trust's in order to ensure that the financial administration of NHS is conducted honestly, effectively and efficiently.

In all the time that I was Director of Finance at St George's I had a good relationship  with the external auditors, indeed when they produced  their management report on the 2000/01 St George's accounts they said," Once again we have been impressed by the organisation and effectiveness of the final accounts process at the Trust" and "We have commented in the past on the strength of the finance function at the Trust and consider that with its skills it may well be placed to contribute significantly to the Shared Services Initiative".   With these comments so recently made it becomes a little difficult to see how this squares with the comments contained in Catherine McLoughlin's dismissal letter which stated, "Ian Perkin failed to establish the quality of relationships with external advisers, stakeholders and other external agencies, necessary to preserve and advance the Trust's interests, and on this the evidence of Melvyn Esterman and Simon Sharp was accepted".

What was the evidence of Simon Sharp that Miss McLoughlin so readily accepted.  The facts were that in early July, I met with Simon Sharp for an annual meeting to discuss the financial performance of the Trust during 2001/02 and to discuss the financial position for the year ahead.  As Dominic Sharp (who was present at the meeting) confirms in the statement that he gave under oath to the Employment Tribunal , "Ian expressed his view that the NHS cost reduction regime - whereby the Trust had to achieve year on year savings of 3% pa to part fund the growth of clinical services - was unrealistic. He was certain that the Trust would not be able to secure the level of savings to achieve the target for 2002/03 and furthermore to fund the loss of non-recurring income received in 2001/02. Therefore he predicted that unless additional funding was forthcoming the Trust would not be able to achieve its statutory duty to break-even on income and expenditure. Simon Sharp concurred with this analysis".  Although as Dominic Sharp confirms, Simon Sharp did not disagree with my analysis, following a meeting he had with the St George's Audit Committee which is made up of some of the non-executive directors of the St George's Board, I was told by the Chief Executive (information that he repeated in the Trust's statement of case against  me) that, "The External Auditor considered that the Finance Director had taken a view that the Trust's finance position was irretrievable and that there was no solution likely within the Trust without external support. The auditor felt that the Director of Finance's views disclosed a very negative approach and he was most concerned that this would percolate to other members of the finance team."  This is really an extraordinary statement for the external auditor, someone who should be fulfilling a public watchdog role, to make.  In effect he seems to be saying that a Director of Finance can only impart "good news".  Tell the truth about the NHS's  obvious problems and you are perceived as being very negative.   As a result of being told this at the meeting that was held on the 29th July, I telephoned Simon Sharp on the 30th July to try and ascertain what he had actually said and I took the precaution of recording the conversation so that I had an accurate record of our conversation.  The following is part of the transcript of the conversation that we had the tape recording of which was submitted in evidence to the Employment Tribunal:-

IP: I can understand you may have the view that in the current political climate that giving bad news is not required. But I don’t think that anything I said at the meeting you wouldn’t agree was the truth.

SS: Ok, no I, you know. I’ve got concerns about how the NHS financial regime works myself and that’s from the outside perspective.

SS: I can’t remember exactly what I said; your pretty robust and sceptical attitude might not necessarily be in the best interests of the Trust.

IP: Because you think it won’t find favour with the centre?

SS: Exactly, they’ll say that the Trust has got this rogue finance director that won’t tow the line.

IP: I will agree that I don’t tow the line because it is the truth and it needs to be said by someone. What’s my alternative I either sit here and pretend everything in the garden is rosy, whereas I feel that I’ve always told the truth and I felt that with you as external auditors you had always felt that that was the case?

SS: And, I think so. That’s the reason why I thought it was important to get that message through to Ian and the non-execs. Ian knows this.

IP: So from where I’m sitting I feel that by telling the truth, as you say, its not something finding favour with the centre, but I feel its something that had to be said.

SS: I just wanted to be in the position where I could say, look Ian is pretty robust and he can get up people’s noses and therefore its not always in the best interests of the Trust, just so they know that not all finance directors are as honest, robust and open as you are.

IP: But it’s a crying shame that being honest, open and robust gets you into trouble.

SS: Well, yes.

IP: As an external auditor how does that happen?

SS: Um, I think it happens in the regime you’ve got.

IP: As external auditors you have always commented on what a strong budgetary control system we’ve got in place. You said in last year’s report that was the case, you commented on the strength of the finance function.

SS: I don’t think we have ever had any problem about the finance function or your leadership of it and each year the production of the accounts and the whole of that process just gets better and we have no concerns about that. Well I’m definitely going to produce a letter, but obviously we are going to have it craft carefully in view of the fact that it may end up as evidence in Industrial Tribunal if you think it will come to that.

IP: Well, absolutely, but all I’m asking for is an honest analysis. I’m being told that it’s a perception about you. Technically you are doing a good job, no one can say you’ve done anything wrong, but you’ve fallen out of favour because you are confronting too many people with the unpalatable truth and you and I have had that discussion at several meetings at the end of the day. When you said at the sign off meeting that Dominic was present, that you were concerned that you there was a danger that there was an Enron type situation building.

SS: I fully stand by that. Yes.

IP: Was it you who said to me yesterday that when I got up at the conference and explained to Richard Douglas that HRG’s are flawed, that actually locally that is being perceived as a mistake?

SS: Yeah. I said that someone had mentioned it to me that they had been at the conference and that you stood up and said that, yes.

IP: And that wasn’t the right thing to do?

SS: Oh, no I don’t think that was their perception. I think that their perception was that yeah, probably it isn’t as being seen as very good by the powers that be, but I don’t think actually they thought it was a bad thing but they wouldn’t have done it personally

IP: But from what you’re saying you don’t have a problem with my leadership of the finance function.

SS: No. Not at all. Except for the perception you create within the wider economy.

IP: But that perception comes doesn’t it, because I give them truthful information, which they don’t want.

SS: Which they don’t want to hear or acknowledge.

IP: It’s frightening, its intimidating people. If I go down for it how many finance directors will speak the truth in the future?

SS: Not that they do now.

IP: Even less likely to in the future. It will be perceived that he was honest, open and robust and it got him the bullet. So what’s the implication from that?

SS: Not a pretty one.

 

I have outlined those answers in red that I think are the extraordinary ones for an external auditor to give and which in my mind raise fears about the standards of conduct being expected of public servants in the current climate that exists within the NHS.  My concern about these views was increased because of the two letters that were submitted in evidence by PricewaterhouseCoopers at my NHS Internal Disciplinary.  The first letter dated 5th August 2002 contains no criticism of me other than  to say that my robust and well aired views on the NHS financial regime might adversely impact on the Trust's partners within the local health economy and that it might have a negative impact on the officers within the Trust who had to find the savings, although no evidence is supplied to support that supposition.  The second letter is even more worrying in that it restates the content of the earlier letter and says in addition that, "It was not Ian's views that gave us cause for concern but rather the potential impact arising from the way in which he aired them openly, both within and outside the Trust.  We were concerned that he might be perceived as having a negative attitude to the financial difficulties facing the Trust and that this could undermine the action being taken by the Trust to address the situation".   This is a clear statement that the external auditor agreed with what I was saying, but was criticising me for speaking the truth because of the impact that the truth might have both internally and externally within the NHS, although he provided no examples of where of how he thought my speaking the truth might be damaging to the interests of the Trust.  I submit that as Finance Director of St George’s Healthcare NHS Trust, a public body that it is required to publish to its financial position at regular board meetings which are held in public, it is wholly wrong for me to be disciplined for speaking the truth about the difficulties St George’s faced in meeting the Statutory Break Even Duty and that by telling the truth I was making a protected disclosure. and that it is therefore wholly wrong for me to be subject to disciplinary sanctions as a result.  The fact that the External Auditor Simon Sharp met with the non-executive directors on the 23rd July 2002, while I was on annual leave and that the moment I returned to work on Monday 29th July I was asked without any warning of any kind to resign from my employment from the Trust, shows that the real reason for my dismissal was not related as Miss McLoughlin suggests to long standing problems related to my  “Management Style”, but is clearly linked to the protected disclosure I made to the External Auditor on the 2nd July 2002 and his reporting of that disclosure to the non-executive directors on the 23rd of that month.   The statement made by Dominic Sharp  confirms that he was present when the disclosure was made to the External Auditor Simon Sharp at the meeting held on the 2nd July.