NHS boards continued giving public money to a doomed clinical waste firm after it had stopped trading and failed to pay staff wages.
Healthcare Environmental Services Ltd (HES) was handed over £30,000 in January by three boards even though the company had effectively closed its doors.
HES also pocketed around £280,000 after informing boards in December that it could no longer meet its contractual obligations to health service.
Monica Lennon, Labour’s shadow health secretary, said:
“It is appalling that the NHS continued to pay HES hundreds of thousands of pounds despite knowing the firm was not fulfilling its obligations and it is a further insult to the workers who were dumped without pay at Christmas.”
“The clinical waste scandal has exposed the incompetence at the heart of the Scottish Government and a Health Secretary who has failed to take command of the crisis.”
HES, a Shotts-based firm owned by businessman Gary Pettigrew, was responsible for the disposal of clinical waste in NHS bodies across the UK, but the company ran into difficulties late last year.
Contracts with NHS trusts south of the border were cancelled after backlogs of unprocessed waste were found at its depots.
Hundreds of tonnes of materials, including body parts, had not been incinerated, and the NHS in Scotland also distanced itself from the firm.
The crisis escalated after Pettigrew’s son sent staff a text on Christmas Eve about December wages:
“Guys, as it stands the bank are still unwilling to release the funds for Friday.
He added: “Try and enjoy your Christmas and switch off for a couple of days. Best wishes.”
Staff at the multi-million pound firm, which employed around 400 people, were made redundant two days after Christmas and Pettigrew confirmed HES was “ceasing operations."
In a parliamentary statement Health Secretary Jeane Freeman provided MSPs with a timeline of the key events behind the firm’s problems:
“The company repeatedly provided assurance that it could meet those contract obligations, but on 7 December 2018 HES advised NHS boards in Scotland that it was unable to continue to provide clinical waste services with immediate effect.
“As required in the contract terms and conditions, HES was given up to 20 days to resume normal service, but the company failed to do so. The company gave notice that it had ceased trading from 27 December 2018.”
However, figures reveal that some boards paid HES Ltd in January, which was following the firm's collapse and after some ex-staff turned to food banks due to the non-payment of wages.
NHS Borders paid Pettigrew’s firm around £18,000, the Orkney board stumped up £6,050 and NHS Lanarkshire put £9,683 into the company’s coffers. All the boards said the January payments related to work carried out by HES prior to the withdrawal of their contracted services.
HES was also paid by some boards in December, after the point at which the firm confirmed it could no longer fulfil the contract.
NHS Lothian, the country’s second largest board, handed over £163,716 before Christmas, NHS Ayrshire and Arran paid nearly £60,000 and NHS Lanarkshire gave £22,693. All the payments were for pre-December work.
It can also be revealed that seven boards owe HES around £450,000. Lennon said: “Any outstanding sums should be put into a fund for the workers. Jeane Freeman must open the books and reveal the true cost of the HES scandal to our NHS.”
Scottish Tory MSP Miles Briggs said: “It’s worrying that taxpayers’ money was spent even after it was clear there’d be no return on the cash. The NHS can ill-afford to be spending hundreds of thousands on now worthless contracts, and I hope efforts can be made to return this cash.
“There are increasing questions being asked over SNP ministers and their handling of the situation.”
A spokesperson for NHS National Services Scotland said: “All payments to HES from NHS National Services Scotland relate to services provided prior to HES withdrawing contracted services. When Healthcare Environmental Services (HES) became unable to fulfil their contractual services (for the collection, treatment and disposal of clinical waste to Health Boards in Scotland), it became within the rights of health boards to withhold payments to HES in lieu of the cost of contingency arrangements as per our contractual agreement.”
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