‘Crony’ row over fees for relatives’ firms

Paul Corrigan, a former health adviser to Tony Blair, stepped down as "director of commissioning, improvement and innovation" as a wider crisis engulfed health in the city. He is at the centre of questions over consultancy fees paid to firms linked to relatives of senior members of staff.

The payments include more than £500 to events organiser GovNet, which is advised by ex-chief whip Hilary Armstrong, who is married to Professor Corrigan. Another £20,000 went to management consultancy Mitchell Damon, owned by John Mitchell, the husband of Dr Sheila Adam, who was NHS London public health director at the time.

NHS London was accused of cronyism after spending more than £25 million of taxpayers' money last year on consultants — more than double the previous 12 months.

The £25.14 million annual bill for firms such as Ernst and Young, KPMG, PricewaterhouseCoopers and Deloitte, is significantly higher than anywhere else in the country.

Health campaigners accused NHS bosses of "playing favourites" with taxpayers' cash and demanded to know why the budget had spiralled.

Geoff Martin, of London Health Emergency, said: "This smacks of cronyism and I'm not comfortable with it. There are enough people out there qualified to do the job without using firms with links to the partners of health chiefs."

NHS London insisted that cash had been handed out to the best firms for the job and said the £25 million bill represented two per cent of its yearly £1.25 billion budget.

A spokesman said: "Any personal involvement is always declared during the selection process. But we chose companies on the basis of value for money and being able to provide the best work."

But lobby groups asked for more evidence of where the money was spent and how contracts were handed out.

Dr John Lister, of London Health Emergency, said: "We aren't much wiser now than before on how they have managed to spend so much with so little to show for it. NHS London has spent hugely more than other strategic health authorities on management consultants despite having massive numbers of highly paid managers already in post."

Mike Penning, shadow minister for health in London, said: "It is really worrying that taxpayers' money is being spent in a way which could be construed as helping out family and friends."

Mr Mitchell said: "I can confirm that Mitchell Damon were commissioned to undertake a number of projects during the financial year 2007/08, involving executive coaching, management and organisational development for NHS London.

"None of this work was commissioned by Sheila Adam. I am aware that Dr Adam declared her association (through her marriage to me) with Mitchell Damon on the SHA [Strategic Health Authority] register of interests."

Ms Armstrong said she "did not know anything" about the payment GovNet received for three NHS London staff to attend a training conference.