David Cameron rode the wave of Covid to target the NHS on behalf of Lex Greensill
On the same day Boris Johsnon emerged from ICU to declare the country’s health service ‘unconquerable’, his predecessor was trying to prove the opposite. The prize was huge.
On April 23 last year, the British prime minister Boris Johnson was at his country residence, Chequers, recovering from his stay in intensive care. He had emerged with a new appreciation for the country’s National Health Service (NHS), using his first appearance since leaving hospital to tell a traumatised nation that it was, despite everything, “unconquerable”.
On the same day, former prime minister David Cameron was in his Cotswolds country home, trying to prove the opposite.
The former prime minister wanted to prise open the NHS on behalf of Lex Greensill, an Australian banker whose financial services firm, Greensill Capital, had hired him as a lobbyist and given him share options worth millions.
The prize was huge. Greensill was rolling out a “free” advance payment app, Earnd, for doctors and nurses across the NHS, whose workforce, at 1.3 million people, is one of the biggest in the world - and most lucrative. The pandemic provided an ideal pretext to make progress. Time was of the essence: with their app delivering daily injections of cash, doctors and nurses would be freed from the anxiety of counting down to payday.
At 9.06pm, Cameron made his latest attempt to get the idea off the ground. He emailed Matthew Gould, who had served under him as Cabinet Office director of cybersecurity. Gould now headed NHSX, the health service’s digital arm, which was scrambling to support hospitals and develop technology that could help keep the pandemic at bay.
Cameron, 54, opened with pandemic pleasantries - “I hope you are keeping safe and well in these very strange times - and no doubt incredibly busy too!” - before getting to the point.
He was writing with a pitch from “one of the businesses I now work with": Greensill Capital, whose Earnd app was being piloted in several NHS trusts. By offering daily payment, he explained, “it addresses one of your key priorities: helping all NHS employees’ welfare, morale and wellbeing”.
Cameron then made a striking claim: his old protege, the health secretary, whom he had already lobbied over private drinks, backed Greensill’s idea. “As you can imagine, Matt Hancock ... as well as the many Trust CEOs are extremely positive about this innovative offer.”
He also reiterated Greensill’s claim that the pandemic had created a moral case for a product, which, until that point, the NHS had not used widely. “This is of such potential importance in contributing to the priority of doing all we can to help NHS employees at the current time,” the former prime minister added.
All he needed was for NHSX to speed up the process, and grant it access to the data of NHS employees. As Cameron put it: “Our ask is about electronic staff records, as Earnd will be much slicker if it can obtain access to employee data ... I think some help from you would go a long way.” He signed off: “Finally, and importantly, once this is all over, it would be great to see you again - maybe for lunch? Let’s stay in touch!”
Within months, Cameron had got what he wanted. In October, Earnd unveiled a partnership to deliver rapid payment to up to half a million NHS staff, having secured deals to get access to, and in some cases pay for, the sought-after data. The concept was simple: staff whose trusts had signed up would enter their name, date of birth and ID number into the app. Then Earnd would take advantage of data-sharing and commercial agreements, invisible to the customer, in order to verify their details. If these matched those held by trusts, a person could ask to be paid ahead of schedule.
It also had a route to make money. The model behind Earnd was to pay staff upfront, then recoup the money from their employer, taking a cut along the way. In the case of the NHS, it would do this at cost, raising funds by converting these future payments into bonds, then selling them and roughly breaking even. It was an attractive prospect for banks, which need to have “socially responsible” investments in their portfolios. In parallel, Greensill hired the likes of Lord Hogan-Howe, the former London Metropolitan Police commissioner, to lobby for Earnd to be rolled out in other public services, such as the police. Senior staff insist that the plan was to charge them - claims categorically denied by Greensill - and use the NHS rosette in order to break into the private sector. “It was the best PR strategy money could buy,” a source said.
Cameron did not know it then, but the company would never make good on its promise. Last month Earnd filed for administration with debts of $20 million, owing undisclosed sums to at least five NHS or taxpayer-funded entities. Its owner, Greensill, had gone bust, after insurers withdrew support for billions in high-risk loans, some of them potentially based on fraudulent invoices, to the steel magnate Sanjeev Gupta. The bankruptcy threatens 55,000 jobs, including 5,000 in Britain, and has reduced the value of Cameron’s shares to zero.
Today (Sunday), the former prime minister is embroiled in eight separate inquiries into Greensill and his lobbying for it, which included asking the chancellor for access to COVID-19 loan schemes and introducing the Australian banker to Hancock over a “private drink”.
The resulting controversy has gone wider than Cameron, heralding the biggest re-examination of the boundaries between the public and private sectors, and ethics in public life, since the cash-for-questions affair almost 30 years ago.
Yet the story of how Cameron made money giving Greensill extraordinary access to people at the top of the Department of Health and Social Care and the NHS has never been told. It is an affair that poses many troubling questions.
Why did a former prime minister agree to lobby Hancock, a cabinet minister, on behalf of a dubious financier? How could Greensill have received such access to the NHS? And why was he allowed to use the nation’s most beloved institution to promote his brand and his company?
THE GREENSILL PLAYBOOK
On March 18 last year, with doctors working flat out, deaths spiralling and Britain on the brink of lockdown, Pret a Manger said it would give hot drinks to all NHS workers. The following morning, Greensill went to College Green, opposite Westminster, to announce his pilot of Earnd on live television.
Like a politician, Greensill referred to “our NHS” and the need to alleviate the stress of “those frontline staff who are protecting our country”.
Then he delivered the sound bite, making clear his app was more or less a form of charity during the pandemic: “In a way ... it is our free cup of tea!”
However, delivering this “free” tea had not been simple. Even proposals which appear to be win-win are difficult to insert into the NHS, whose staff and patients are intentionally walled off from private companies. Greensill understood as much. That is why, by the time he appeared on Sky News, he had spent months hiring names who made his company look credible - and had the contacts to make things happen.
Those who joined Earnd’s star advisory board included Lord Blunkett, the former home secretary, and Dame Louise Casey, the former homelessness tsar.
They were joined by former officials who knew how to work the system. In some cases their roles were publicly disclosed, such as that of Bill Crothers, the government’s former chief procurement officer, the ultimate gamekeeper turned poacher. The appointments watchdog has since revealed that Crothers, 60, simultaneously worked as a Greensill Adviser and civil servant in 2015.
In other cases, positions were not disclosed. On the day that Greensill launched the Earnd pilot, Sir David Dalton, a respected former NHS trust leader, offered an endorsement that featured in health industry journals and even appeared on NHS England’s website.
It is unclear when talks began, and there was never any announcement, but Dalton soon became a paid Adviser, introducing Earnd to at least ten trusts. Last night (Saturday), Dalton said he “always referred to my role as an Adviser” when contacting the NHS. His own former trust, Salford Royal, was one of the first to pilot it.
For Greensill himself, this strategy of using retired politicians and officials to break into the public sector was not new. It was the execution of a vision he had conceived a decade earlier, in 2011.
It was then that Greensill, the son of sugarcane farmers in Queensland, was brought into Cameron’s government to advise on his area of expertise, using finance to pay individuals and businesses who are vulnerable to late payment, otherwise known as supply chain finance.
Greensill, then 34, had quit a Wall Street bank’s London office and created his own company. He could not have wished for more willing advocates than those he found in No 10. Within a year, he persuaded Cameron to launch a scheme delivering billions in rapid payments to NHS pharmacies. His ex-employer, and then his own company, would run the scheme. The experience provided a template for Greensill’s business: develop low-risk public-sector schemes that made modest profits on vast flows of cash. He could then use the veneer of establishment credibility to woo investors, whose money he poured into riskier schemes.
By 2018, Greensill was executing this strategy. In February that year, he was invested with a CBE for “services to the economy” by Prince Charles. In August, he hired Cameron, now ousted from office, as an Adviser, taking him to meetings in the UK, US and Saudi Arabia.
All the while, Greensill Capital was issuing billions in loans to Sanjeev Gupta’s companies, which were, at best, unlikely to pay them back. Gupta has denied allegations that some loans by Greensill to his company were advanced against potentially fraudulent invoices.
OPERATION NHS
It was in spring 2019 that Greensill got to work on his biggest public-sector ploy yet: inserting himself into the relationship between the NHS and its workforce, which is eclipsed in size by only a few organisations, notably the US and Chinese armies. First, he entered talks to buy two start-ups: FreeUp, co-founded by British entrepreneurs, and Earnd, from Australia. Then Greensill moved onto the hard part: getting the NHS on board.
To do that, in July, Greensill called upon his two top lobbyists: Cameron and Crothers, who got in touch with a Who’s Who of the most powerful figures in the Department of Health and the NHS.
Their styles varied. Cameron preferred polite texts and calls. Crothers combined water-cooler banter with forceful requests for meetings and help.
The pincer attack worked. In July, Lord David Prior, a Minister under Cameron who had become the chairman of NHS England, fixed a meeting for Greensill and Crothers with Julian Kelly, its chief financial officer, and Sir Simon Stevens, its chief executive, who dropped in for 15 minutes at Prior’s behest.
Such meetings achieved at least two things: they gave Cameron, Crothers and Greensill an appreciation of NHS bureaucracy, and an apparent licence to name-drop those present as they booked meetings with officials lower down the ladder.
Far more junior NHS procurement officers asked Crothers thorny questions that summer: was it even responsible to give workers daily payment? What were Greensill’s finances like? Was the company definitely not making any money? Leaked notes show that, in one meeting, he explained that Hancock backed the plan. “We’ve had meetings with basically everyone,” he is quoted as saying.
In October 2019, Cameron delivered two big coups, bringing Greensill and Crothers to a private drink with Hancock, where they lobbied him directly. The health secretary, 42, was supportive: he asked his officials to explore the idea. Cameron and Crothers let that be known among those who mattered. Allies of Hancock say he only backed the idea in principle on the condition there was no cost to the taxpayer or staff.
The same month, Greensill also went to meet Lady Harding, the Tory peer and chairwoman of NHS Improvement, which oversees all NHS trusts.
Off the back of that meeting, Greensill secured introductions to several trust leaders who could roll out Earnd in their own patches. They included Sir Jim Mackey, the former head of NHS Improvement, who runs a trust in Northumbria. Greensill representatives travelled to Newcastle to meet his officials. They were armed with slides littered with buzz phrases about “democratising capital” and references to their founder’s CV as a former Adviser to Cameron.
Similar meetings followed with trusts in London, Essex and Salford. After signing up to the pilot, Caroline Clarke, chief executive of Royal Free London, one of the biggest trusts in the country, made the decision sound self-evident. She told a magazine: “Why wouldn’t you do it?”
With the supposed backing of Hancock and Harding, Greensill acted with similar assurance - and made it sound as though it was only a matter of time until Earnd was rolled out nationally. The company’s tone changed accordingly: in December 2019, Jonathan Lewis, a Greensill representative, wrote presumptuously to NHSX, saying: “We will probably provide this service to the NHS for free, forever.”
PANDEMIC OPPORTUNITY
By March 2020, Lex Greensill had the world at his feet. He had bought four private jets, renovated the eight-bedroom mansion in Cheshire where he lived with his family, and secured the investment of SoftBank, owner of the world’s largest tech investment fund. He claimed to have a company worth about $9 billion.
But he was also a man in a hurry. The NHS would be the gateway to the rest of the public sector, a source of long-term income. As the company’s value and exposure to risky loans soared, it was time to act. The coronavirus provided the perfect opportunity: by citing the anxiety of staff during the pandemic, he could hurry along officials and create a narrative that his app was urgently needed by the nation’s key workers.
As Greensill himself said: “The firm believes it is the right thing to do, to make this technology available to public-sector employers and employees absolutely free of charge, especially at a time like this.”
In parallel, Greensill Capital developed a strategy that meant it could sidestep many of the NHS’s checks and balances, and rapidly accelerate the rollout.
In normal circumstances, start-ups that want access to the NHS must take part in an open competition, pitting them against other suppliers. However, Greensill’s offer to provide its service free meant it could exploit a loophole. On the face of it, no money was changing hands, meaning a number of trusts concluded there was no need for such a process.
Then came questions of access: to staff, their pay slips and their data.
Greensill was always going to have to deal with individuals and trusts directly, but it also wanted to enter partnerships with bodies that held data and delivered payroll services on a much bigger scale, across dozens of trusts. It is difficult to make these arrangements work. There are several NHS-affiliated entities that provide payroll services to trusts, while data is held across several bureaucracies, including central government agencies, individual trusts and private companies.
It was in this context that Cameron emailed Gould at NHSX, hoping he could put in a word and help cut through the thicket of bureaucracy. In his email last March, Cameron also reintroduced Gould to someone who could follow up on the specifics: Crothers. “Bill worked in the Cabinet Office during the coalition years, leading the government’s procurement and commercial agenda. He also tells me that you received your CBs at the same investiture!”
Less than three hours after the former PM’s email, he had received an effusive response. Gould, 49, said: “We know Greensill, and have been supporters of their offer for the NHS.” He confirmed he would “certainly look into the electronic staff records questions” and follow up with Crothers, adding: “Lunch post-Covid would be excellent.”
A short time later, Gould passed Cameron’s email onto a colleague, who pursued it with a body the former prime minister had mentioned: NHS Electronic Staff Records, the integrated HR and payroll system for the entire health service, with data for 1.3 million people.
Sources claim that subsequent discussions helped the company develop a two-pronged strategy. The first prong: partner with semi-private bodies, which kept Earnd outside public procurement rules. The second: if necessary, pay.
The first port of call was NHS Shared Business Services (NHS SBS), one of two big providers of payroll services for hospitals. Despite looking and sounding like a public body, it is actually a private entity jointly owned by a French IT consultancy and the Department of Health, run by Hancock. Greensill Capital struck an agreement to partner with NHS SBS, giving Earnd access to up to 400,000 people whose NHS organisations used SBS payroll services, as well as the right to be housed on the MySBS app, which is available to all NHS staff.
The company, whose branding includes the NHS logo, helped Earnd as it reached out to other intermediaries, such as apps for locum workers, and tried to increase its visibility. It even started pumping out publicity on Twitter. One tweet used a picture of a cartoon animal to say: “Not using Earnd? That’s cocoa-nuts.” Like most references to Earnd, it has since been deleted.
In turn, Earnd is said to have pledged to pay NHS SBS hundreds of thousands of dollars for every 10,000 members of staff enlisted via its app. In parallel, Greensill paid for the development of platforms which would access staff data held by trusts and verify it, allowing salaries to be paid. One was built by Allocate Software, a major NHS partner. Greensill still owes the company $645,000.
An agreement was also struck with the body that Cameron had mentioned in his email: NHS Electronic Staff Records. In exchange for $16,500 it would build a service cross-referencing staff data entered into the app with the person’s name, date of birth and ID number, as held by the trust. Earnd still owes money to NHS ESR, NHS Providers and Behavioural Insights Ltd, a consultancy. Such partnerships were to form the core of Earnd’s empire after the pilot, which Greensill said had gone “fantastically well”.
RISE AND FALL
It is unclear how many trusts agreed to send staff data to Earnd. In March 2020, NHS England said that “seven trusts” were working with it. By December, some publicity claimed the app was being rolled out to 30 trusts. A paid-for “commercial feature” in a magazine falsely claimed “tens of thousands of NHS employees” were “already” using the service. Although it was technically available to hundreds of thousands of key workers, there is scant evidence that staff or trusts actually wanted their “free cup of tea”.
During the pandemic, most staff were enduring huge stress. Few had the time or desire to sign up. Trusts were also hesitant; some felt the impact of giving workers daily payments under any platform had not been explored in enough detail.
Last night (Saturday), NHS SBS, Earnd’s main gateway to the health service, acknowledged for the first time that, despite its own bold claims of being rolled out to “all” NHS bodies, fewer than 450 people signed up, through three organisations.
The resulting cash flow of a few hundred thousand pounds at most was never enough to create the new class of bond envisaged by Greensill.
Last month, Greensill and Earnd went bust. Greensill is being wound up, Earnd has been bought by a competitor.
The question of why Greensill was ever given such extraordinary access to the NHS, and why the health service put itself at the disposal of the financial engineer and his company, leaving the taxpayer out of pocket, has yet to be answered.
NHSX said: “Greensill was one of many fintech firms which approached NHSX to discuss their products, as part of our ‘innovation surgery’, but we did not enter into any contract or partnership with them.” NHS England said that “experts scrutinised [Greensill’s] proposals but decided not to go along with them”.
A spokesman for David Cameron said: “These discussions were about the mechanics to ensure Earnd was delivered for NHS workers in an efficient way.”
Last night (Saturday), a Greensill family spokesman said: “Lex is devastated the Earnd project didn’t succeed. In total, tens of thousands of NHS employees had access to zero-cost early pay via Earnd. Having that option alone was of great help.”
The Times
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