| METHOD OF DISPOSAL
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| C&AG's Report, para 1.23
| 3. The Authority chose to dispose of SWift by a service procurement process. They invited prospective purchasers to tender for, and offer discounts on, either all or separate packages of SWift's services. They also invited separate bids for SWift's primary (or computer software) assets and secondary assets (mainly computer equipment). They did not market SWift as a business opportunity.
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Q 1
Q 108
| 4. Our predecessors asked the NHS Executive why the Authority had not sought to dispose of SWift as a business. They said that their choice of method of sale had been driven by NHS users and the primacy of the Authority's objective to ensure service continuity to NHS users. The disposal took place at a time of great organisational change in the Health Service. The Authority, which was itself facing abolition, had been under considerable pressure from health authorities and NHS trusts in the South West to be sure that service continuity was the prime objective. The Authority had deliberately chosen to adopt what they regarded as a risk-averse method of disposal in the belief that this best suited their objectives and the context in which they had to sell SWift.
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| 5. Our predecessors asked whether this method of disposal had adversely affected achievement of the Authority's objective to maximise the financial return to the Health Service, by imposing an unnecessary straitjacket on bidders who were forced to make separate bids for parts of what was, in effect, a single business.
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Q 107
Q 113
| 6. The NHS Executive said that, in their view, bidders had been aware that they were bidding for a single entity and had been briefed accordingly. They felt that the purchaser had paid a competitive price and that the business opportunities wrapped up in the deal had been transparent.
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Q 136
Q 108
| 7. Our predecessors nevertheless asked the NHS Executive whether, in retrospect, they accepted that this disposal could have been carried out by competitive trade sale. The NHS Executive said that, subject to carrying out a trade sale in a way which protected the continuity of service objective, they accepted that this could have been possible. They accepted that, as the business opportunity included continued provision of services, a trade sale need not have compromised the Authority's prime objective in this disposal.
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| Q 135
| 8. The Executive agreed with the principle that vendors should generally dispose of agencies which are effectively business entities by a method of sale, such as competitive trade sale, which is likely to achieve value for money for the business opportunity.
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| Conclusions |
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| 9. We note that the Authority chose to sell SWift by a service procurement process in which bidders were asked to offer discounts on SWift's prices to NHS customers and to bid separately for SWift's software and physical assets. The Authority could have sold SWift as a business in a competitive trade sale, but we note that they saw this course as putting at risk the continuity of service to the customers. We are concerned that by carrying out a service procurement process, however, the Authority did not address directly the value of SWift as a business.
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| 10. As the value of the business opportunity lay in the continued provision of services to customers we are unclear why the Authority should have concluded that a trade sale might have put services to customers in question. In our view the service procurement process followed by the Authority carried a clear risk that full value might not be obtained for the business opportunity being sold.
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