One of the Conservatives’ biggest ever donors has profited from £135m of contracts with the Department of Health and Social Care in under four years.
Frank Hester, a healthcare tech entrepreneur whose company supplies computer systems to the NHS, gave Rishi Sunak’s party £5m this summer, the joint biggest donation to the Tories in decades.
His company, the Phoenix Partnership (TPP), paid out more than £20m in dividends between 2019 and 2022, with Hester the only shareholder.
The group supplies software to about 2,700 GP surgeries in England as well as support services to allow them to hold medical records for patients electronically.
Its main operating company, the Phoenix Partnership (Leeds), recorded a turnover of £75m, with profit before tax of £47m in the year to March 2022, Companies House documents show. It paid dividends during the year of £10m to its parent company, which is ultimately owned by Hester, and a salary of £515,000 to him, its sole director.
Over a period of four years from 2019 to 2022, the ultimate parent company, TPP Group, paid out £23.5m in dividends, which appear to have gone to Hester as its only shareholder.
Contracts with the Department of Health and Social Care appear to make up a large proportion of TPP’s business. TPP said it did not wish to comment when asked about its business with the NHS and whether all the dividends were paid to Hester.
Last year, Hester wrote an open letter to the NHS saying: “We are here for our NHS. We are here to help. Not to drive profits for shareholders, or to grease revolving doors. Let’s do it for the frontline and choose to digitise in an entirely different way.”
The scale of business that Hester and TPP have with the NHS was uncovered by the Good Law Project, which found payments totalling £137m to the company since the start of the Covid pandemic in April 2020, largely under the GP IT Futures framework.
Jo Maugham, the director of the Good Law Project, said: “Once you see how much Mr Hester gets from an NHS that is desperately starved of money, you can understand why he is so committed to the government that lets him.”
Hester, a computer programmer from Leeds, is included on the Sunday Times rich list with an estimated wealth of £415m. He was made an OBE in 2015 for services to healthcare. TPP has met government figures three times since July 2021, including Steve Barclay, the health secretary.
Writing in the Telegraph this month, when he made his £5m donation, Hester said he was donating to Sunak’s party because he believed it could deliver for the NHS.
“As a businessman from Yorkshire I have been fortunate enough to have met the prime minister. He shares my passion for harnessing the data revolution to transform the way we as citizens access healthcare,” he wrote.
“Artificial intelligence has the ability to collect, store and analyse patient data in a way that could revolutionise diagnostics, identifying, for example, whether someone is more at risk from cancer or dementia. Robotics can help minimise invasive procedures, meaning less trauma for patients and speeding up recovery times.”
Earlier this year, it was reported that TPP was awarded a £150,000 contract with the UK Health and Security Agency about seven months before the company gave a £150,000 donation to the Conservatives. A correction was later issued to say the donation came from Hester rather than the company.
At the time, the company said: “TPP strictly follows the guidelines for public sector contracting. In regards to the donations, these should have been made by Frank Hester in his personal capacity rather than through the business. Mr Hester repaid the company in full. For absolute clarity, TPP is unequivocally apolitical.”
The company has remained relatively low-profile as a supplier to the NHS. However, it was the subject of controversy in 2018 when TPP failed to inform NHS Digital that 150,000 patients had opted out of sharing their medical data, resulting in their information being shared by mistake.
At the time, Jackie Doyle-Price, a health minister, described it as a “supplier defect in the processing of historical patient objections to the sharing of their confidential health data”.
She said TPP had “apologised unreservedly for its role in this matter and has committed to work with NHS Digital so that errors of this nature do not occur again”. The government stressed there had not been any risk to patient care.
TPP declined to comment about the scale of its business with the NHS. The Department of Health and Social Care was also approached for comment.
