Watchdog finds no evidence that the Greensill NHS program has benefited the taxpayer
The UK government’s spending watchdog said there was no evidence that Greensill Capital’s supply chain finance program for NHS England provided any benefit to taxpayers, contradicting claims by the founder of the collapsed lender that he saved the government £ 100million a year.
The findings were part of a National Audit Office report released on Friday following an investigation focused on a pharmacy loan program in England that Lex Greensill helped establish during his tenure as a government adviser and has was then administered by the company he founded.
Greensill Capital, which once claimed to be the UK’s most valuable fintech firm, took office in March, prompting scrutiny over its founder’s extraordinary access to the UK government. His disappearance also resulted in former Prime Minister David Cameron in Westminster’s biggest lobbying scandal in a generation.
The NAO report said the UK Department of Health was “unable to provide evidence of realized benefits” from the program, contrary to projections in its 2012 business case that it could generate £ 100million from annual savings to the NHS.
The report notes that this estimate was based on “advice provided by Lex Greensill”. The now disgraced financier made the same claim during an appearance before the Treasury Select Committee in May, telling MPs the scheme “has saved the taxpayer over £ 100million a year”.
Meg Hillier, Labor MP and chair of the House of Commons public accounts committee, said the findings raised “even more questions about the government’s ability to prevent conflicts of interest and the independence of the boards it receives ”.
“The consequences once again weigh on the taxpayer, with increasing risks of value for money and promised savings vanishing into thin air,” she added.
The program was initially awarded to Greensill’s former employer, Citigroup, in 2013, under an existing contract between the US bank and the UK government. It was then awarded to US tech firm Taulia in 2018, with Greensill Capital acting as a “subcontractor” providing the underlying funding to pharmacies, after the two groups submitted a joint bid as part of a tendering process.
While Greensill had completed a five-year term as the government’s adviser on supply chain finance just months before the bid was submitted, the NAO found no evidence that there was “a discussion of a potential conflict of interest ”. The report also revealed that Lex Greensill “wrote to complain and threaten legal action” when the offer was initially excluded from the process.
The NAO also looked at a so-called ‘payday advance’ system that Greensill provided to NHS England, which allowed staff to draw on their monthly wages before payday at no additional cost. Lex Greensill has heavily promoted the program, saying it was his way of giving hospital workers battling the first wave of coronavirus the equivalent of a “free cup of tea.”
The NAO found that there was “limited employee use” in the NHS trusts in England that adopted the program. The report also noted that Greensill Capital offered supply chain finance programs to NHS trusts that adopted the program, but found no evidence that any of them used the proceeds of company signature loan.
Greensill Capital declined to comment.
A spokesperson for the Department of Health and Social Affairs said the report made it clear that the programs were voluntary and pharmacies could join if they wished.
“When the problems arose, DHSC protected affected pharmacies from financial hardship by continuing the short-term payment program and supporting pharmacies in their transition to a new payment schedule.
“Our approach has always been that local NHS employers are in the best position to decide how to use flexible payment options as part of their overall compensation and reward offer for staff.”