NHS Contract Awarded To Private Firm Despite Rival Bid Being "£7 Million Cheaper"

    Private company Alliance Medical beat an NHS bid to win a contract to provide cancer scan services across the North West of England. Conservative MP Malcolm Rifkind sits on the board of the private bidder.

    An £80 million contract to run cancer scans for the NHS has been given to a private health firm with a Tory MP on their board, despite a rival NHS consortium allegedly offering to carry out the work for £7 million less.

    The NHS Trust that runs Royal Stoke University Hospital in Staffordshire put together a consortium with other NHS hospitals to enter what they called a "competitive bid" for a 10-year contract to run scans across Cheshire, Staffordshire, Shropshire, Liverpool, and Lancashire. The scans, known as PET-CT, are mostly used for diagnosing and measuring cancers, and are a vital tool for fighting the disease.

    However, NHS England, the "head office" of the health service, rejected the bid from state-run providers and instead awarded the contract to Alliance Medical, a private health firm whose board members include leading Conservative MP Malcolm Rifkind.

    The NHS consortium is now challenging the decision to hand the contract to the private company. In January, managers from Staffordshire and Stoke NHS Trust told a public meeting that they believe their bid is £7 million cheaper than the deal agreed with the private company and "have now launched a formal challenge", according to the Stoke Sentinel.

    The decision to award the contract to Alliance Medical was made earlier this month by NHS England, the body set up by the coalition government to oversee the health service.

    A special department of NHS England called the Strategic Projects Team was in charge of the procurement for this scanning contract. This team was founded in 2009 to handle the management of Hinchingbrooke hospital in Cambridgeshire, which then led to the first full privatisation of an NHS hospital. That privatisation deal failed earlier this month when the healthcare firm involved, Circle, announced it was abandoning the hospital after a damning report from quality inspectors.

    The individual who led the Strategic Projects Team, Ernie Buckley, was named as the contact on procurement documents for the Stoke scanning contract. He was previously a project manager for privatisation specialist Serco.

    Ian Syme, coordinator of North Staffordshire Healthwatch and a long-time critic of privatisation, uncovered the original NHS bid by, in his words, "digging through 150 pages of board papers". His research revealed that the bid from the private provider had beaten the NHS bid.

    Syme told BuzzFeed News: "There's little or no openness or transparency in these tendering processes, no public debate, no meaningful public scrutiny. Ask for details and you get obstructed by the 'commercial confidentiality' excuse."

    He added: "The evidence is stacking up that NHS England have a privatisation agenda and NHS England are at the moment privatising NHS by stealth."

    Asked about the contract win, a spokesperson for Alliance Medical said "the process has been open and transparent from day one" and that the company is "delighted to be successful" in winning the contract. Alliance Medical also highlighted its existing work for the NHS in the North West.

    Conservative MP Malcolm Rifkind gets around £60,000 a year to sit on Alliance Medical's board, according to public records.

    He is a prominent backbencher in a government whose health policy is now enriching his own company. Alliance Medical has a turnover of around £120 million a year, so this scanning contract, worth an estimated £8million a year, is a significant part of its work. Alliance Medical said Rifkind was not involved in the bid.

    Stoke Hospital intended to use a £3 million scanner – bought in November 2013 with donations from Keele University and members of the public – if it won the contract. Local campaigners believe the scanner might either remain unused or be brought into the private Alliance Medical's scheme.

    When asked why it had apparently chosen a more expensive bid from a private company for the scanning contract, NHS England told BuzzFeed News: "NHS England is currently running a procurement process to ensure people who require medical imaging continue to receive a high quality sustainable service.

    "We are working with all parties to try to reach an agreement that is in the best interest of patients and allows continued use of the charity-funded scanner at the Royal Stoke University Hospital."