North East London Local Pharmaceutical Committee failed to comply with
its constitution for a number of years, an independent review of the
LPC’s activities has found. The LPC disputes the content of the
review, saying that it gives only a partial view, a misleading impression
and that it is fundamentally flawed.
The review highlighted the following shortcomings:
· Failure to make LPC accounts available to the pharmacy contractors
it represents and to the Pharmaceutical Services Negotiating Committee
· Failure to produce annual reports
· Failure to call annual general meetings
· Failure to pay to the PSNC money it has collected from contractors
for that purpose
· Failure to seek guidance from, or report to, the PSNC on local negotiations
· Failure to report changes in its membership to the PSNC
The independent review also found that three of the seven primary care
trusts covered by the LPC did not consider it to be representative of
their pharmacy contractors. Nor did 87 of the LPC’s electorate
of 352 contractors, including representatives of the Company Chemists
Association, whose members hold 65 contracts in the LPC area.
It further found that the combination of the roles of treasurer and secretary
in a single post could lead to a conflict of interest and that there
was a perception that LPC decisions were made purely by its officers.
The review was carried out by an external reviewer — Richard Bates,
CPFA — selected by North East London Strategic Health Authority.
It was conducted using a semi-structured interviews and the submission
of written material.
Recommendations
The review resulted in four sets of recommendations being made.
The first set suggests that the NEL StHA should ask all PCT chief executives
to consider the findings of the review and agree a governance framework
for LPCs. The StHA is also asked to conciliate between the NEL LPC and
the PSNC to try to resolve their ongoing dispute. NEL StHA is also asked
to report the review to the NHS Counter Fraud and Security Management
Service.
The seven PCTs are asked, among other things, to consider whether or
not they will continue to recognise the LPC as a local representative
committee. They are also asked to ensure that their professional executive
committees scrutinise and agree the constitutions of all local representative
committees, including those of other professions, and look at the LPC’s
finances.
A spokeswoman for the StHA told The Journal that it had already carried
through the recommendations made in relation to itself and that it is
now for the boards of the seven PCTs to decide what they are going to
do.
The LPC is asked urgently to resolve its dispute with the PSNC and settle
its outstanding debt. It is also asked to amend its constitution, to
appoint a financial officer, to ensure good governance, to have external
oversight of its elections, to address its constitutional breaches and
to carry out an investigation into a disputed LIFT scheme, together with
Newham PCT. The PCT has also been asked to investigate the concerns raised
by Trevor Hadley of Anthony’s Pharmacy as a complaint (see Panel
below).
Allegations made against North East London LPC
A number of specific allegations were made by 87 anonymous contractors
in relation to the behaviour of the LPC, including that it failed
to comply with its constitution by:
· Failing to produce annual reports
· Failing to send copies of its account to contractors
· Failing to hold hold annual general meetings
· Failing to make payments collected from contractors to the PSNC
· Failing to seek guidance from, and report to, the PSNC on local
negotiations
Arising from these complaints, the inquiry also considered whether
the LPC was representative of pharmacy contractors, whether it
had behaved with financial probity and whether it had ensured that
good governance was followed.
A further complaint was made by one contractor (Trevor Hadley of
Anthony’s Pharmacy), that the LPC and Newham Primary Care
Trust had pre-arranged the allocation of a new pharmacy contract
in relation to a Local Implementation Finance Trust funded development
with the express aim of excluding his business. |
More widely, all pharmacy contractors represented by NEL LPC are asked
to consider their representation at national level, to ensure that the
LPC reports appropriately on the recommendations made to it and to consider
whether they are represented by it.
For its part, NEL LPC — whose secretary Hemant Patel is also President
of the Royal Pharmaceutical Society — accepts the review’s
recommendations and admits that it has been tardy in relation to the
publication of accounts and failed to call AGMs. It has acted promptly
to rectify some of the failings identified in the review. These actions
include putting audited accounts for 2002–05 to an AGM held on
30 June.
It has also drafted revised audit procedures and says that work to review
the committee’s governance was started by its audit committee in
November 2004. This work has now been modified to take into account the
complaints that led to the StHA’s review.
In its defence, NEL LPC says that it has been placed under extreme pressure
by having to accommodate NHS organisational changes, including the recent
transition from three health authorities to eight PCTs (subsequently
changed to seven), a shortage of trained staff, the election of a new
committee, the increased ambitions of pharmacists and a greater focus
on community pharmacy.
It says that matters that would normally be covered in an AGM are dealt
with at bi-monthly contractors’ meetings and that these meetings,
taken together with local pharmacy forum meetings amounted to 70 contractors’ meetings
in one year. It adds that the failure to hold AGMs is common among LPCs
and is brought about by apathy among their constituent contractors.
So far as its failings in relation to circulating accounts to contractors
or to provide them on request is concerned, the LPC says that accounts
were prepared and approved by LPC members, who included representatives
of the CCA and the other complainants.
PSNC dispute
PSNC response
A statement from the Pharmaceutical Services
Negotiating Committee says that it is regrettable that a local
pharmaceutical committee
should have failed to conduct its affairs properly. “LPCs
represent contractors in their area and are funded by levies from
contractors. They cannot act in blatant disregard of the constitution
under which they are established or fail to account to contractors
for levy expenditure.”
It adds that the situation covered by the review is exceptional
and that the majority of LPCs are properly conducted and ensure
that they merit the trust of contractors they represent.
It concludes: “As community pharmacy at last begins to take
its proper place in NHS primary care we need to ensure that local
representative bodies adopt the highest standards. PSNC will use
the report as the basis for issuing guidance to LPCs so all can
review their own governance arrangements. We will also undertake
a review of the model constitution for LPCs in the light of the
recommendations in the report and propose amendments.” |
On the matter of the dispute between the LPC and the PSNC, NEL LPC
points out that LPCs, not the PSNC, are the statutory representative
bodies
and that the PSNC is subordinate to LPCs. It says that the decision
to withhold funds from the PSNC was a decision of the whole LPC, including
representatives of the contractors who prompted the review, and that
it is supported by the majority of contractors. The decision was taken
because the LPC believed that the PSNC had failed to implement resolutions
of the annual conference of LPC representatives in a timely and appropriate
manner. In particular, NEL LPC believes that the PSNC failed to negotiate
the terms of the new pharmacy contract in a manner that adequately
takes into account the interests of smaller independent contractors
in the NEL area.
As a result, it withheld levies that would have been payable to the
PSNC from April 2002 to December 2003. On 17 December 2003, the PSNC
ceased
providing services to NEL LPC contractors and no payments have been made
since then. Despite this, the LPC continued to collect levies from contractors.
It says that outstanding funds due to the PSNC up to the point at which
it ceased to provide services to NEL contractors are safe in bank accounts
and available to be paid to the PSNC when its dispute is resolved.
Mr Bates (the reviewer) rejected the LPC’s reasons as being insufficiently
credible to support the ongoing dispute with the PSNC.
Whether the LPC will separate the roles of treasurer and secretary remains
to be seen. In this regard, it points out that the PSNC does not have
a treasurer and that the LPC has always had procedures to safeguard its
funds and to provide a complete audit trail.
It is clearly surprised at the review’s finding that some PCTs
do not consider the LPC to be representative of its contractors.
“These misgivings have never been brought to our attention by any PCT,
all of which have dealt with the LPC for some years,” it says.
Further, the LPC says that it is modelled along the same lines as all
other LPCs, with representatives from all contractor groupings — independents,
small multiples, Company Chemists Association and Co-ops — in numbers
that correspond to the local mix. This composition, and the LPC constitution,
had been agreed by all involved.
Anthony’s Pharmacy
Consortium members
The 10 members of the Church Road LIFT scheme pharmacy consortium
are Samuel Adjei, Bernard Black, Shiv Bagga, Ali Janmohamed, Brighesh
Katechia, Arshad Malik, Mohammed Mokoddus, Ashok Pandya, Shobna
Patel and Harish Solanki. |
NEL LPC membership
Members of NEL LPC in April 2004 were Shiv Bagga, Herman Benjamin,
David Blyth, Gary Boorman, Alan Castell, Philip James, Imran Khan,
Mukhtar Manji, Saiqa Mughal, Rajiv Pahwa, Bakul Patani, Atul Patel,
Hemant Patel, Jignesh Patel, Mayur Patel, Nishit Patel, Prakash
Patel, Raj Radia, Surinder Singh Kalsi and Jim Thomas.
Mr Bagga and Mr Patel are also members of the Society’s Council. |
In relation to the complaint from Mr Hadley of Anthony’s Pharmacy,
the review found failings on the part of Newham PCT, as well as NEL LPC.
So far as the PCT’s involvement is concerned, it found that it
had tried to set up a meeting between Anthony’s Pharmacy, NEL LPC
and members of the consortium that was awarded the pharmacy contract
in order to broker an agreement to work together. The meeting had been
cancelled at short notice by the LPC secretary and the LPC had declined
subsequent offers to meet. The PCT had failed to respond to a range of
correspondence from Anthony’s Pharmacy concerning the matter.
So far as NEL LPC is concerned, the review says that it is not clear
that sufficient action was taken to engage Anthony’s Pharmacy within
the successful consortium. Anthony’s Pharmacy was not included
even though it fell within the qualifying distance for consortium membership.
Further, the qualifying distance had been extended from 1km to 1.2km
in April 2004, enabling the inclusion in the consortium of a contractor
who was an LPC member (Shiv Bagga). Much later, the PCT received confirmation
that the pharmacist in question had resigned from the LPC, the review
says.
The LPC says that the decision to change the consortium’s qualifying
distance was taken by members of the consortium, not the LPC, that Anthony’s
Pharmacy chose not to take part on the consortium and that Mr Bagga had
never resigned from the LPC. “This is an example of the inaccuracies
that the review is riddled with,” Mr Patel said. He added that
the sum of money the review says is outstanding to the PSNC by NEL LPC
is also wrong. It is £90,000 and not £45,000.
Reporting that the LPC failed to acknowledge correspondence from Anthony’s
Pharmacy and that it failed to respond appropriately to requests that
the LIFT project be discussed at LPC meetings, the review concludes that
the LPC failed to discharge its statutory responsibility to represent
contractors. It also finds that the LPC failed to comply with a constitutional
requirement to consider complaints between contractors and to make representations
on their behalf to the PCT, the StHA, social services and the PSNC. The
review made no findings itself about the allegation that the LPC and
Newham PCT had prearranged the allocation of a new pharmacy contract
in relation to a Local Implementation Finance Trust funded developmemt
with the express aim of excluding Anthony’s Pharmacy.
The LPC says that the fact that complaints were sent to the PCT/StHA
has revealed that, like most, if not all, LPCs it has no formal procedures
for investigating complaints itself, even though its constitution requires
it to do so. It adds that a complaints procedure should be established
that allows recourse to another LPC in cases of dissatisfaction, with
a possibility of appeal to the relevant PCT.
Colin Baldwin, chief executive of the Company Chemists Association, confirmed
that the 65 CCA member contracts constituted part of the 87 contractors
who had sought the investigations. He denied that the complaint had been
orchestrated by the CCA and said that it had been Mr Bates who sought
to meet CCA representatives as part of his investigation, and not vice
versa. Nor did the CCA wish to see the LPC system undermined in any way.
Mr Baldwin said: “We want a strong, viable LPC infrastructure.”
Mr Baldwin agreed that there was no suggestion that LPC funds had been
misappropriated or misused.
After publication of the final review, a further response from NEL LPC
said that the review was misleading. “While some reference is made
in the final report to the LPC’s response, most of the detail of
that response is omitted from the review,” it said. “It is
NEL LPC’s view that the review has failed properly to take into
account the detail of that response, thereby giving only a partial review
and a misleading impression. It is NEL LPC’s view that much of
the review is, therefore, fundamentally flawed.”
It adds: “The findings in fact of the review relate almost entirely
to corporate governance issues, which are separate to the issue of contractor
representation. Findings that are relevant to the issue of whether the
LPC represents the contractors are not so much findings as mere assertions
by some contractors that they do not regard the NEL LPC to be representative
of the local contractors. There is no evidence to support the contention
that the LPC is not representative of all the
contractors.” |
The
Pharmaceutical Journal