Southern Health NHS Trust 'paid millions' to Katrina Percy's associates

A troubled NHS trust has paid millions of pounds to companies owned by previous associates of its embattled chief executive, BBC News has learned.

One firm received more than £5m despite winning a contract valued at less than £300,000, while another was paid more than £500,000 without bidding at all.

Both are owned by former acquaintances of Southern Health NHS Trust’s chief executive Katrina Percy.

The trust said it took its financial responsibilities “very seriously”.

‘Failure of leadership’

The BBC has also learned Southern Health has access to the services of former Labour spin doctor Alastair Campbell, after it hired Portland Communications to help with its ongoing problems.

Mental health trust Southern Health has been under intense scrutiny since an NHS England-commissioned report in December found it failed to investigate the unexpected deaths of hundreds of patients.

A failure of leadership and governance at the trust was blamed for the problems, a conclusion a subsequent CQC report in April agreed with.

In light of the criticisms, Katrina Percy, the only chief executive the trust has ever had, has faced widespread calls to resign but has refused to do so.


Timeline

2006 – Management consultant Chris Martin and Katrina Percy start working together during her capacity as chief operating officer at Surrey and Sussex Hospitals

2009 – Ms Percy becomes chief executive of Hampshire Community Health Care and Mr Martin follows her, providing coaching and leadership support

2010 – Mr Martin starts a firm of organisational psychologists called Talent Works Ltd, whose website says they are “experts in culture and behaviour change”

2010 – In December, Southern Health advertises for management development support. The tender has a value of £288,000, and the contract is to last three years, with an option for a one year extension

2011 – Ms Percy joins Southern Health as chief executive and the work is awarded to Talent Works Ltd

2014 – The initial three year contract ends and the firm is paid £5.365m – an over-spend approaching 2,000%. The trust chooses to exercise its option for a one-year extension


Now she is facing fresh questions about two former associates, Chris Martin and Paul Gray, whose companies were paid by Southern Health.

Roy Lilley, former chairman of an NHS trust and now a health policy expert, said the overspend on Mr Martin’s company was “extraordinary”.

He said: “It really doesn’t look good, and it casts a deep shadow over the people involved and the way in which the trust has been run by the board.”

A former governor at Southern Health, John Green, who has a background in running quality management programmes, said he queried the work that Talent Works was doing at the trust.

“I was fobbed off,” Mr Green said.

“I didn’t get any information for well over a year. I believe the spending of public money in the NHS is nothing as accountable to the public as it should be.”

Paul Gray worked with Ms Percy as director of strategy at Hampshire Community Health Care and his firms made money from the trust without having to bid for a contract.

In July 2009, he set up consultancy firm Consilium Strategy Consulting Ltd and in 2014 he formed a second company, Consilium Partners Ltd. Together they have been paid at least £602,000 by Southern Health since 2011.

In a statement, Southern Health said it had “tested the market to ensure value for money in 2011. There has been no increase in rates since this benchmarking exercise took place”.

‘Not unusual’

Regarding Talent Works, the trust said: “We fully accept that the original contract for Talent Works was for a sum far less than the eventual spend, however it was made clear in the tender documentation that there would be scope for additional work to be provided.

“The trust’s audit committee were aware of the contract overspend but were satisfied that the market rates had been tested and that for a number of reasons, it was in the best interests of the trust for their work to continue.”

It added that it was “not unusual” both men had worked with Ms Percy “given the specialist services they provide to the NHS”.

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BBC News – Health