Revealed: The report that shows Labour can't be trusted to run the NHS

Revealed: The report that shows Labour can’t be trusted to run the NHS… How corrupt bosses at Wales’s biggest public body faked documents and misled auditors to cover up millions in reckless spending

  • Betsi Cadwaladr University Health Board spends a hefty £1.2 billion a year
  • For six of the past eight years, Betsi Cadwaladr has been in ‘special measures’ 

If you happen to be one of the 700,000 people who live in North Wales, then your health and happiness lies in the hands of the Betsi Cadwaladr University Health Board.

Named after a local contemporary of Florence Nightingale, it runs 20 hospitals and coordinates the work of 96 GP practices and 147 pharmacies across six counties, spending £1.2 billion a year.

This hefty sum — the equivalent of £400 for every man, woman or child in Wales — makes it the largest single public-sector organisation in the entire country. Sadly, against stiff opposition, it can almost certainly be described as the most incompetent, too.

For six of the past eight years, including this one, Betsi Cadwaladr has been in ‘special measures’, an emergency status that supposedly allows the Labour-run Welsh government, which has devolved responsibility for healthcare, to sort out failing NHS bodies.

Plagued by chaotic mismanagement, it has been through seven chief executives in 13 years, and four since 2019. At one point it was paying a ‘cost-saving’ consultant nearly £2,000 a day for nine months, in a deal that allowed him to work from his villa in Marbella.

Jo Whitehead (left), Sue Hill (centre) and Eluned Morgan (right) are under pressure over Betsi Cadwaladr

If you happen to be one of the 700,000 people who live in North Wales, then your health and happiness lies in the hands of the Betsi Cadwaladr University Health Board

A series of damning official probes culminated in February with an Audit Wales report chronicling ‘deeply worrying dysfunctionality’ among senior staff and ‘long-standing concerns about the performance, quality and safety of a number of specific services’.

Examples of chronic and sometimes tragic ineptitude abound.

In November, inspectors were forced to abandon a tour of its biggest hospital, Ysbyty Glan Clwyd near Rhyl, to save the life of a patient who had fallen ill in a corridor of the A&E unit.

The group had found itself unable to locate a single doctor or nurse in the chaotically run facility, where it was taking two hours to triage new arrivals, placing patients at ‘a significant risk of harm’.

Christmas saw two ‘critical incidents’ along with the publication of a review of vascular services which uncovered serious deficiencies and failings across the organisation, including the fact that the deaths of four patients had not been properly referred to coroners.

Spiralling waiting lists mean 30 per cent of patients wait more than nine months for treatment, with nearly one in four twiddling their thumbs for more than a year.

Some 9,000 locals have waited more than two years (the figure for the whole of England, which has 80 times the population of North Wales, is around just 20,000).

Meanwhile, the cost of settling the roughly 230 negligence claims the board clocks up annually runs to more than £25 million a year.

In March, an internal report identified ten ‘breaches of duty’ in the care given to a 61-year-old hairdresser from Anglesey named Janet Jones, who died after falling down stairs.

An independent medical report submitted to her inquest said in summary that her treatment by paramedics, A&E professionals and ‘squabbling’ teams of hospital staff had been ‘abject’.

Betsi Cadwaladr is, in other words, a byword for chaos and ineptitude. It runs death-trap hospitals, provides shoddy care to almost three-quarters of a million people, and represents a source of deep embarrassment to the Labour Party, which has run the Welsh NHS throughout its existence and would soon like to take over England’s, too.

Yet perhaps the biggest scandal in the failing health board’s history has been kept almost entirely under wraps. Until now.

The conspiracy, which meant a whopping £120 million of spending could not be signed off last year, has been laid bare in a secret ‘forensic report’ by investigators from Ernst & Young (EY) which was leaked to this newspaper last week

Today, the Mail can lift the lid on an extraordinary series of events that saw several of Betsi Cadwaladr’s most senior officials orchestrate a plot to dishonestly cover up £10 million of dodgy spending.

We can reveal how a cabal of corrupt senior staff created fake documents, knowingly misled auditors and independent members of their own governing board about how taxpayer money was being spent, and broke a host of ethical rules by choosing to file false financial accounts.

The conspiracy, which meant a whopping £120 million of spending could not be signed off last year, has been laid bare in a secret ‘forensic report’ by investigators from Ernst & Young (EY) which was leaked to this newspaper last week.

Spanning 95 gruesome pages, it details ‘deliberate’ and ‘systemic cultural failings’ by senior officials — most notably Betsi Cadwaladr’s £250,000-a-year chief executive Jo Whitehead and her £150,000-a-year finance chief Sue Hill — and raises serious questions about the dysfunctional nature of not just the Welsh NHS, but the country’s entire public sector.

It tells how senior executives at the health board sought to ‘hinder’ Ernst & Young’s inquiry by altering key documents, and reveals that a recording of a key Teams meeting at which fraudulent behaviour is likely to have been discussed was mysteriously deleted before it could be handed to investigators.

The shoddy affair dates back to late 2021. It began when Betsi Cadwaladr found itself on track to underspend its budget for the financial year by around £10 million.

A sensible response would, of course, have been simply to return the money to the Exchequer. But this is the Welsh public sector, where profligacy is the order of the day. So chief executive Whitehead and her team decided to instead find elaborate ways to get rid of huge sums of money.

Spending like a drunken sailor proved to be remarkably easy. But soon, a problem emerged.

Namely, some of the products and services that Betsi Cadwaladr had purchased weren’t actually being supplied until after the end of the financial year. Others involved contracts that ran until 2024. And many big-ticket items on the shopping list involved ‘capital expenditure’ which had to be accounted for over several years.

In other words, hardly any of the shopping spree could legally be paid for with the ‘spare’ £10 million they had sitting in their budget for 2021/22.

At this point, a properly run public body would, again, have returned the unspent cash. But instead, the report finds, Jo Whitehead doubled down, taking what she called a ‘pragmatic decision’ to place it on the books for the incorrect year.

This policy, which breaks a host of basic rules of governance, was enthusiastically pursued by many senior officials.

The report finds that they deliberately recorded transactions wrongly, often against the better instincts of subordinates, providing page after page of transcripts of emails and calls in which executives orchestrated the scam.

On one occasion, Andy Whitfield, the chief finance officer at Ysbyty Maelor Wrecsam (Wrexham Maelor hospital), instructed two members of staff to falsely account for £258,314 of spending on bladder scanners as day-to-day rather than ‘capital’ spending, so they could be paid for using the spare £10 million, saying: ‘The more we can find a way to charge to revenue right now, the better for everyone, so I hope you’ll support the party line that these should be treated as revenue.’

On another, two senior officials, chief finance officer of the board’s central area Nigel McCann and acting executive director of finance Rob Nolan, exchanged emails in which they appeared to criticise a junior member of the finance team for querying an instruction to cook the books.

The report has been kept almost entirely under wraps since Ernst & Young submitted it on January 25. Neither Betsi Cadwaladr nor the Welsh government will agree to place it in the public domain

A third incident highlighted by Ernst & Young saw Sue Hill, Betsi Cadwaladr’s finance chief, attend a meeting where plans to account for a £500,000 contract with the British Red Cross in the incorrect time period were discussed.

When investigators asked Hill why she failed to intervene to stop the plan, she was struck dumb, staying silent for 40 seconds before saying: ‘I guess I should have done but I didn’t.’

By far the murkiest transaction, and the biggest, involved a £1.8 million contract with a consultancy firm called Lightfoot Solutions, which was invoiced to 2021/22 despite the fact that it actually covered services ‘for the following financial year and beyond’.

To create a paper trail supporting this, a fake purchase order was produced on March 30, 2022, one of the last working days of the financial year.

The Ernst & Young report says it was drafted by Simon Whitehead, head of procurement at NHS Wales Shared Services Partnership (NWSSP), in consultation with McCann. It was ‘intentionally designed’ to contain several deliberate errors that meant it would never actually be sent to Lightfoot but could seemingly be retained to create misleading internal records. ‘PO [purchase order] will now fail as no fax number . . . so it won’t go to LF [Lightfoot],’ Simon Whitehead told McCann, who replied ‘Great stuff’.

NWSSP — which has 2,000 employees, spends £400 million a year and provides critical support to every health trust in Wales — would not comment when asked about its head of procurement’s involvement in this false accounting scandal.

A second fake document was then produced two months later, when Audit Wales, which had by then uncovered ‘significant errors’ in Betsi Cadwaladr’s accounts, asked to see a copy of Lightfoot’s original bid for the job.

In response, Tim Woodhead, Betsi Cadwaladr’s ‘finance director: operational finance’ issued an extraordinary instruction to a subordinate, telling him not to hand over the actual document in question. Instead, Ernst & Young claims, he held two meetings on Teams with Lightfoot, after which an ‘altered’ copy of the proposal was supplied to the auditors.

It had several key dates removed and some items of wording changed in an effort to ‘introduce ambiguity’ and therefore misrepresent the deal.

It’s unclear what knowledge (if any) Lightfoot, which works widely across the British NHS, had of this murky affair. The firm did not comment on its role in creating the ‘altered’ proposal, but tells me it was ‘given assurances’ that the basis of its employment was legitimate.

Woodhead’s fake document was later used to persuade Betsi Cadwaladr’s board of directors to green-light the Lightfoot deal.

He was not the only senior executive at the health board pulling wool over their eyes, either. So, too, was finance chief Sue Hill.

Because of the value of the contract, the Lightfoot deal needed to be signed off by the Welsh government. However, in May 2022 the chief executive of NHS Wales refused to grant it, saying: ‘Colleagues do not consider that this contract is value for money and have heard mixed reports about the work of Lightfoot.’ This hugely important fact was concealed from directors at a board meeting held in August 2022, when Hill claimed that the Welsh government had simply asked for some ‘additional information’ about the deal.

The briefing persuaded the board to support the deal. The result, according to Ernst & Young, is that the consulting firm is now working for Betsi Cadwaladr without any valid contract in place, and without Welsh government approval.

All told, the ‘forensic report’ is explosive stuff of significant public interest which shows an array of highly paid staff at a public body that turns over £1.2 billion a year displaying contempt for standards and governance.

James Davies, a local Tory MP and former doctor, described its findings as ‘damning’ saying: ‘Its description of collusion between multiple individuals both within and outside of the health board to present dishonest accounts, falsify documents and manipulate and withhold information suggests an indifference to rules and standards and a lack of accountability.

‘It provides yet further evidence of the systemic and cultural malaise that pervades Betsi Cadwaladr. It is a disgrace.’

David T.C. Davies, the Secretary of State for Wales, added last night: ‘The report highlights systematic failures at the heart of the health board, most notably officials appearing to fudge and fiddle figures. Serious questions must now be directed at both the health board and the Labour-run Welsh government about what has been uncovered.’

The report has been kept almost entirely under wraps since Ernst & Young submitted it on January 25.

Neither Betsi Cadwaladr nor the Welsh government will agree to place it in the public domain. Not one of the highly paid officials who faked documents, misled auditors and carried out false accounting has yet been made to suffer the slightest consequence.

A criminal fraud investigation was dropped a few weeks ago, seemingly on the grounds that none of the perpetrators of the conspiracy personally profited. And although an ‘internal review’ is ongoing, the people responsible for the £10 million scandal have been neither disciplined nor sacked.

Most are still being paid six-figure salaries with the exception of Betsi Cadwaladr’s chief executive Jo Whitehead — who was allowed to retire early, citing ‘family reasons’, before Christmas.

‘The management of the issues raised in the EY report is progressing in line with existing procedures and policies,’ is all Betsi Cadwaladr will say.

‘It is inappropriate to comment on the status of any employees at this stage.’

Perhaps most scandalously of all, finance chief Sue Hill who, according to Ernst & Young, gave evidence to the inquiry that was ‘inconsistent with documentary evidence’ and then refused to co-operate further by submitting to a follow-up interview, somehow remains an executive member of Betsi Cadwaladr’s governing board of directors.

Does the Welsh government care? Its Corbynite First Minister, Mark Drakeford, claimed in the Senedd (Welsh parliament) that he had not even read the Ernst & Young document, while Health Minister Eluned Morgan’s only meaningful response to its publication has been to sack several of Betsi Cadwaladr’s ‘independent’ directors — the very people behind the original decision to hire Ernst & Young to investigate.

Their jobs have been handed to replacements considered unlikely to rock the boat, including one Gareth Williams, a former special adviser to Drakeford. Some smell a political stitch-up.

‘The apparent attempt to cover up the Ernst & Young report is bad enough,’ says David Jones, a local Tory MP.

‘Even worse, however, was the effective sacking by the Welsh government of the independent board members — two of whom are constituents of mine — who were simply doing their best to throw light on this disgraceful affair. The police must now be asked to investigate.’

Quite so. For as the forensic and — until now — secret inquiry has shown, the biggest public-sector organisation in Wales also appears to be its most corrupt.

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