Examination of Witnesses (Questions 220
- 223)
MONDAY 23 MARCH 1998
MR ALAN LANGLANDS, MR FRANK BURNS, DR JAMES READ AND MR DAVID BIRD.
220. I see. That was a masterpiece of financial
arrangement, was it not? Mr Langlands, you must know why the Government
made this strange choice where it went from a cheap deal to a
dearer deal on the grounds that it did not want to have to pay
the costs of development but then itself took on the responsibility
for development. That seems a rather strange situation, does it
not?
(Mr Langlands) I think there were
two parts of the deal. You mentioned both. One was lower costs
to the NHS users who really only paid for installation and maintenance.
The development was centrally funded but still from the public
purse, I accept. The second was the profit cap which, as I understand
it, would not have been part of the first deal which, as has rightly
been said, was set at 30 per cent and I agree that the figure
that has been achieved on average up until the current year is
15 per cent, not 30 per cent[31].
221. I think I would like to have a note
from you as well on your understanding of what went on at that
22time and how the decision was arrived at and some detailed information
on the advice from Hambro's[32].
(Mr Langlands) I think all I could
offer on that is the documentation that was made available to
the NAO during their studies. If I could agree with the C&AG
what he thinks would be of best help to the Committee.
222. Yes. They obviously have to edit the
amount of documentation that comes forward to us. As long as we
have got it and if NAO feel they do have adequate information
that would be acceptable. Coming back to this basic point about
the conflict of interest. You then were put, Dr Read, as you see
it and I can understand why, in a situation where you had the
second best contractual arrangement for the deal and at the same
time you had to wrestle with conflicts of interest. What conflicts
of interest were you conscious of? What sort of occasions gave
rise to this awareness for conflicts of interest?
(Dr Read) I was advised by my board
at CAMS that it would be a useful thing for CAMS to develop software
systems that used the Read codes and that was the right and proper
thing to do, but I felt it was difficult because we could be perceived
to be taking advantage of the situation CAMS was in. So all those
years I said no. Commercially that was a bad and wrong decision,
but I felt it was a difficult position that I was not prepared
to go along with. In fact, I disadvantaged CAMS in many ways over
the years.
223. Can you give us any other example that
comes to mind? [33]Perhaps
you would let us have a note from your point of view of your experience
in dealing with the conflicts of interest that Mr Langlands does
not feel he can do. Thank you very much, gentlemen. I expect to
see you again soon, Mr Langlands.
(Mr Langlands) I look forward to
it!
31 Note by Witness: With the first deal there would
have been a profit cap of £250,000 a year. Back
32
Note: See Evidence, Appendix 1, page 25 (PAC 264). Back
33
Note: See Evidence, Appendix 2, pages 25-26 (PAC 250). Back
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