The Locus Association this week welcomed a report from the National Audit Office (NAO) into Dr Foster Intelligence. The report investigates the joint venture between the Information Centre and Dr Foster LLP and endorses the Association’s concerns about the venture which were outlined in a submission to the NAO in July 2006. In their submission Locus highlighted concerns that the contract had not been put out for tender and that it would hinder the creation of a level playing field and the potential conflicts created by the government’s policy of earning commercial returns on public sector information.  The NAO today responded to these issues in their report.

Key points from the NAO report include:

§         “The Department of Health and the Information Centre could not demonstrate to the National Audit Office’s satisfaction that they had achieved value for money in establishing Dr Foster Intelligence, a joint venture between the Information Centre and a private sector company Dr Foster LLP. This is primarily because they did not go out to tender to encourage fair competition”.

§         “The report concludes that, in the absence of a fair competitive tender process in this instance the Information Centre had no fair comparisons or benchmarks to demonstrate that the joint venture with Dr Foster Ltd was the best structure to meet its needs, or that it represented good value for money”.

§         “The Information Centre should ensure that all future services are procured competitively. It should take any necessary steps to ensure a level playing field in health informatics, consulting with appropriate companies which are competitors of Dr Foster Intelligence to understand the reasons underlying any unwillingness to bid for work”.

Michael Nicholson, Locus Chairman, said “Locus is delighted that the NAO report highlights the importance of fair competition and value for money in the Public Sector Information (PSI) marketplace.  The PSI sector benefits from healthy competition and the creation of apparent monopolies where contracts are not put out to tender can hinder this.  The Locus Association looks forward to working with the National Audit Office to help ensure that this situation does not occur again in the future”. 

He added, “Locus’s members recognise the significant potential that exists for the public and private sectors to work together in harnessing information and driving the UK’s knowledge economy and the Association is committed to working with Government executive agencies, regulatory bodies and Public Sector Information Holders to achieve this”.

-          ENDS –

Notes for Editors:

·          1. Locus was established in autumn 2005 and formally launched on 26^th January 2006. The Association’s President is a former Director General of the OFT and Oftel, Sir Bryan Carsberg.

§         2. The Association exists to raise awareness of, and promote the development of, a healthy and competitive private sector in relation to PSI. Locus acts as a forum for exchange of information, keeps its members up to date with latest policy developments, and provides advice and guidance. Our members recognise the potential of PSI, but also the benefit of uniting to address some of the challenges and pooling resources to meet them. It is worth noting that the particular nature of the PSI market structure, where individual private sector organisations have limited influence, lends itself to the development of a trade body.

§         3.  The role of the National Audit Office (NAO) is to audit the financial statements of all government departments and agencies, and many other public bodies.  The NAO also report to Parliament on the value for money with which these bodies have spent public money. Around 60 reports to Parliament are presented each year by the Comptroller and Auditor General on the value for money with which Government departments and other public bodies have spent their resources. Under the 1983 National Audit Act, the National Audit Office can examine and report on the economy, efficiency and effectiveness of public spending.

§         4. In February 2006 Dr Foster Limited, a commercial provider of healthcare information, announced the launch of a joint venture with the Health and Social Care Information Centre (HSCIC).  The venture was launched by Lord Warner, the Minister of State for Delivery, who billed it as a new public-private partnership “that will improve public access to health and social care information”.  The partnership is in the form of a 50:50 joint venture.

§         5. The HSCIC is investing £12 million in the venture—a direct injection of £4.4 million equity into Dr Foster Intelligence Ltd to fund working capital requirements, and a payment of £7.6 million to Dr Foster as a further contribution to working capital in Dr Foster Intelligence Ltd and to compensate the shareholders of Dr Foster Ltd.

·          Enquiries: Harriet Crosthwaite: 020 7930 9788 or harriet@quintuspa.com