Date 18/08/08 Your Ref
Our Ref RM/990 Enquiries to Richard Mutch Extension 89441 Direct Line 0131-536-9441 Direct Fax 0131-536-9009
Email [email protected]
Dear
FREEDOM OF INFORMATION – CONSULTANCY FIRMS
I write in response to your request of 10 July (received 15 July) and clarification provided on 24 July 2008 for information in relation to details of contracts between NHS Lothian and any management consultancy firm (including PriceWaterhouse Coopers, KPMG, Deloitte Touche Tomatsu and Ernst & Young) – including financial audit services and other services under SIC 70.22/9.
I have been provided with information to help answer your request by Mr Bob Martin,Head of Corporate Reporting and Clinical Governance – NHS Lothian.
Financial Auditing
This matter is being dealt with separate from that of consultancy for reasons which will be apparent from what is set out below.
External Auditors
The Auditor General appoints external auditors to Health Bodies in Scotland and in each audit rotation (which happens every five years) the Auditor General may appoint external firms or its own Audit Services Group.
For the period 1 April 2004 to 31 March 2006, KPMG were appointed by the Auditor General. Audit Scotland’s own Audit Services Group was appointed from 1 April 2006 and has completed two years of the current 5-year rotation.
Audit Fees in the four years from 1 April 2004 to 31 March 2008 have been charged in the NHS Board’s accounts as follows:
2004/05 538
2005/06 449
2006/07 442
2007/08 439
The significant fall in fees from 2004-05 reflects NHS Lothian’s move to single system working and migration to common financial systems from the former NHS Trusts that were abolished by 31 March 2004.
Internal Audit
Internal audit is carried out in-house by the Lothian & Borders Management Audit service. No external firm has received fees for internal audit services in the period under request.
Other Services
Of the firms cited specifically in the request:
• Ernst & Young received total fees of £108,258 in 2004/05 relating to VAT advisory services. They also received fees of £32,000 in 2006/07 and £422,000 in 2007/08 in relation to advice on the refinancing of the PFI agreement on the NRIE which was completed in May 2007.
• Deloitte Touche Tomatsu received £4,000 in 2005/06 for accounting advisory
services.
• PriceWaterhouseCoopers received £2,200 in 2006/07 for accounting advisory
services.
• KPMG has an annually renewable contract for the provision of audit services on the accounts of funds held on behalf of patients in hospital (Patients’ Private Funds). This audit assignment attracts a fee of £10,840 per annum (based on the most recently rendered account).
Other Firms’ Consultancy Costs
Excluding the sums outlined above the following annual costs were incurred on consulting services activities with management consulting firms covering all classifications under SIC 70.22: Year Cost (£000) 2004/05 615 2005/06 378 2006/07 552 2007/08 1,221 Major service provider and elements within each year are as follows:
Financial Year 2004/05
Jenkins & Marr £89,255 Soft FM Benchmarking
Extramed Ltd £56,037 Diabetes IT System
Extramed Ltd £15,600 Leith CTC Admin System
David Lauder £14,630 Cardiac Redesign
Mitchell Associates £21,750 Development Consultancy for Bangour Village
Hospital
Explore IT £34,457 Finance Systems Upgrade
Cedar Software Ltd. £53,082 Finance Systems Upgrade
BSI £17,764 Engineering consultancy
Shepperd & Wedderburn £21,450 Legal Advice re PFI
Total Software Solutions £22,370 IT systems support
AHC Information Servs. £26,798 Data Warehousing
Williams & Inglis £18,000 Property Advice
LIAISON VAT Consultancy £11,978 VAT compliance services
Accounting for VAT £12,280 VAT compliance services
Denis Rowley Associates £6,500 Learning Disability Strategy
Financial Year 2005/06
Explore IT £148,695 Finance Systems Upgrade
BSI £12,813 Engineering consultancy
Thomson Gray £29,750 Building Engineering consultancy
Mitchell Associates £10,875 Development Consultancy for BVH
Cedar Software Ltd. £17,095 Finance Systems Upgrade
Accounting for VAT £9,439 VAT compliance services
AHC Information Servs. £25,599 Data Warehousing
Total Software Solutions £30,310 IT systems support
Denis Rowley Associates £24,567 Learning Disability Strategy
Extramed Ltd £10,745 Clinical IT System
Financial Year 2006/07
Explore IT £102,647 E Financials system
AKH Associates £60,278 Business cases for Capital and Revenue projects
David Lauder £17,111 Cardiac Redesign
Accounting for VAT £39,875 VAT Compliance services
LIAISON VAT Consultancy £200,676 VAT Compliance services
Total Software Solutions £28,620 IT systems support
Denis Rowley Associates £18,125 Learning Disability Strategy
Currie and Brown £48,884 Business cases for Capital and Revenue projects
Thomson Gray £11,070 Estates Framework business case
Financial Year 2007/08
Currie and Brown £92,263 Business cases for Capital and Revenue projects
Denis Rowley Associates £50,000 Learning Disability Strategy
Thomson Gray Ltd £26,460 Building Engineering consultancy
Northgate Arinso UK Ltd. £53,918 Workforce Planning
Joint Future Consulting £44,296 Dental Services
Grant Thornton £44,506 Midlothian Community Hospital
Financial modelling
Margot White £12,000 West Lothian CHCP facilitation
McClure Naismith £45,940 Legal advice on capital projects
Montagu Evans £10,380 Property advice on capital projects
Quarto Consulting £26,400 Nursing Review
GE Healthcare £320,484 Lean in Lothian facilitation
Oberlanders Architects £16, 515 Minor capital schemes
AKH Associates £14,739 Business cases for Capital and Revenue projects
Professor M J Deighan £11,415 Heart Manual development
White Light Media Ltd £14,582 Public Health Annual Report
James Barr £22,500 Valuation services
LIAISON VAT Consultancy £154,625 VAT Compliance services
McRoberts £89,000 PFI legal advice on refinancing agreement
No details of contracts are held in the financial ledger. The only long term contract on record is a three year contract with LIAISON VAT consultancy for compliance services. This is due for re-tender in March 2009.
I hope this information answers your request.
If you are unhappy with our response to your request, you do have the right to request us to review it. Your request should be made within 40 working days of receipt of this letter, and we will reply within 20 working days of receipt. If our decision is unchanged following a review and you remain dissatisfied with this, you then have the right to make a formal complaint to the Scottish Information Commissioner.
If you require a review of our decision to be carried out, please write to Mr I Whyte, FOI Reviewer at the address at the foot of this letter. The review will be undertaken by Mr Whyte as he was not involved in the original decision making process.
FOI responses (subject to redaction of personal information) may appear on NHS
Lothian’s Freedom of Information website at :-
http://www.nhslothian.scot.nhs.uk/your_rights/foi/foi_09.asp.
Yours sincerely
ALAN BOYTER
Director of Human Resources and Organisational Development
