Ex-CfH CTO’s firm earns £46.3m from NPfIT

An IT consultant who worked as Chief Technology Officer of NHS Connecting for Health for three years is also the senior partner of an IT consultancy firm – ASE Consulting – that has so far earned over £46m from the NHS IT Programme in consultancy fees.

E-Health Insider has learned that Alan Duncan McNeil, who acted as CfH’s CTO between December 2002 and August 2005, and who still acts as Technology Advisor to CfH, is also the lead partner and director of ASE Consulting.

Figures obtained under the Freedom of Information Act reveal that ASE has receivced payments since 2003 in excess of £46m. The firm says its current contract with CfH is due to expire in June 2008 “with an option to extend to June 2009.” ASE continues to provide design and technology assurance services, particularly related to the NHS Spine infrastructure.

ASE told EHI the £46m total was correct. “This figure is accurate and is gross of VAT, OGC commission and subcontractor costs. The figure to ASE net of these costs is £23.5m.”

ASE’s company accounts for 2005-2006 show that as of 31 March 2006 McNeil was the major shareholder in the company, with 62% of the issued shares. Responding to questions from EHI last week McNeil said he personally holds 27.9% of the issued share capital.

The accounts show that in 2006 the company had an average of 31 consultancy and three support staff, with a wage and salary bill of £3.75m. In 2006 the highest paid director earned £310,375 in remuneration.

Almost uniquely among the senior executives of the NHS IT agency McNeil has remained a consultant throughout the five-year period of his employment, never being a full-time employee of CfH. Instead McNeil has, as a consultant, been first CTO and then a senior technology advisor to CfH while simultaneously running a consultancy firm that has won a series of highly lucrative contracts from the DH agency.

NHS procurement rules appear to permit this kind of arrangement and ASE Consulting outlined the measures taken to avoid conflicts of interest.

In response to written questions, ASE Consulting said that McNeil, while head of CfH’s Technology Office and then CTO, was not involved in selecting or evaluating consultancy procurements.

Asked what mechanism there was to separate McNeil’s role as CTO from potentially influencing the award of consultancy contracts to ASE Consulting, the firm replied: “He was simply not involved in anything to do with these things, neither he nor NHS procurement policy would allow it.”

As head of CfH’s Design Authority and then the agency’s CTO, between 2002-2005, McNeil played a critical role in defining the information architecture and technology strategy adopted by NHS CfH for the multi-billion National Programme for IT (NPfIT). Initially he reported directly to CfH director general Richard Granger, and then later to chief operating officer Gordon Hextall.

According to CfH, McNeil and ASE currently provide expertise on “design assurance and advising on the Spine infrastructure and services”. As well as being instrumental in the early stages of CfH, ASE Consulting has provided consultancy and professional services throughout the five-year history of CfH.

In 2002, at the very beginning of the programme, ASE shared a £600,000 contract with Xansa to establish a new ‘Design Authority’. In May 2003 – as CfH was being established – it was announced that McNeil had been appointed to lead the new National Design Authority to “develop and control the standards to which IT systems of the future will be required to adhere to”.

In 2003-2004 this figure grew dramatically and ASE was paid £6m for its services by CfH, then hosted by the NHS Information Authority (NHSIA). In 2004-2005, payments to ASE through the NHSIA swelled to £9.9m. By 2005-2006 payments by CfH, now a fully independent DH agency, grew another £4m to £13.9m. And by 2006-2007 payments from CfH had reached £16.4m.

The 2006-2007 £16.4m payment equated to almost three-quarters (77%) of the firm’s reported 2005-2006 turnover of £21.2m. In the year 2004-2005 ASE Consulting reported a turnover of £14.9m.

Questioned about the procurement mechanism, contract periods and values of the contracts awarded to ASE Consulting, CfH told E-Health Insider the information was difficult to produce as the initial awards had been by the now defunct NHSIA.

The DH agency said in a statement: “ASE have held five competitive procurements since the inception of the National Programme for IT” [NPfIT].

ASE Consulting’s company accounts state most of its work has come through a framework contract. “For the last several years most of our government work has been secured through a framework contract which was due to expire in November 2006 and was being re-tendered. In common with most of our main competitors, our bid for a place on the new framework was unsuccessful and therefore at risk. This risk has now been mitigated by both the securing of our current main contracts (including NHS) until 2009 and the winning of a further significant contract through the European Journal process.”

Asked whether it was cost effective to employ McNeil as a consultant to fill the role of CTO for over two and a half years, far longer than standard consultant contracts, CfH said: “Those working on the longer term assignments through consultancy and the interim contractor market, provide specialist skills, knowledge and experience which is not readily available in the employment market – and can be scarce even as an exetrenal resource. Contracts are subject to any requirements of the Public Contracts Regulations 2006 and departmental policies and procedures. Awards are made on the basis of best value for money.”

McNeil is the founder and senior partner at ASE Consulting and has been providing IT and management consultancy to the private and public sectors for 20 years. Like other key senior figures at CfH – including Granger and Hextall – McNeil previously worked on major IT projects for the Department of Work and Pensions (DWP).

According to ASE “through the late eighties and nineties he [McNeil] designed and helped build and deploy much of the infrastructure which runs the DWP today (three main programmes each lasting more than three years each).”

McNeil has been characterised as a strong advocate of the Spine-based transactional messaging approach adopted by CfH. Speaking at Healthcare Computing in 2003 McNeil said his job was to enforce adherance to the NPfIT vision: “We are there to keep the vision and ensure designs comply with policy.”

ASE Consulting describes itself as a specialist in provision of IT services from business and IS strategy; commercial and procurement management; IT architecture and design; together with project and programme management and technical assurance.

McNeil has served as a technology advisor to CfH since relinquishing his position of chief technology officer to Paul Jones in 2005.

Links

Main NPfIT contractors paid £1.2bn last year

Two key contracts awarded to consultants

Jon Hoeksma