The Scottish Mail on Sunday
A convicted conman, a generous donation to SNP coffers... and a £2m NHS contract
Cronyism row as f irm lands lucrative tech deal Tory questions over the use of public money
THE Scottish Government is at the centre of a damaging new ‘cronyism’ row after handing work worth millions of pounds to a company linked to a prominent SNP donor.
Jamie Rae – a convicted criminal who has been jailed for fraud – has also given money to the election campaign of Airdrie and Shotts MSP Alex Neil, who is currently Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights.
Last year, Rae, 50, was appointed to the board of medical technology company Nugensis.
Only months later, the company was awarded contracts worth £2.2 million by the NHS – run by then Health Secretary Mr Neil.
The allegations come as the SNP faces criticism for giving public money to the organiser of T In The Park – in a deal brokered by an employee who was a key SNP aide.
Details of the Rae deal have emerged following an investigation by The Scottish Mail on Sunday.
Last night, a Scottish Tory spokesman said: ‘Ministers must demonstrate the award of public money in this case complied with all the rules and was won fairly. There is no room for cronyism in our public life and contracts should not be awarded on the basis of an SNP old-pals act.’
Rae was brought up in a former mining community on the outskirts of Falkirk, Stirlingshire, and became SNP councillor for Laurmont West aged only 27. But his career in local politics ended in disgrace after an investigation found he had been falsely claiming housing benefit for two people at an address he used as a mail-drop, netting £16,500.
He was also found guilty of writing false references for friends and family looking to borrow £151,000 from building societies.
Rae resigned from the SNP, admitted nine counts of fraud, and was jailed for 15 months in 1997. After his release from prison, the party took him back – even though he never repaid the money.
Alex Salmond stood by Rae – even when urged in the House of Commons to expel him.
With savings of £1,800, Rae started a business, Meridian, selling refilled printer ink cartridges at computer fairs. He expanded into recycling mobile phones and electrical goods. Renamed Redeem, the company built a turnover of £11.6 million.
Having won a battle with throat cancer in 2010, Rae sold the business the following year, becoming a multi-millionaire.
Also in 2011, he donated £10,012 to the SNP, as well as £1,500 to the local party in Falkirk West.
Rae – a prominent member of the pro-independence group Business for Scotland during the referendum – also gave £1,525 to the SNP branch in Mr Neil’s constituency.
In January last year, Rae was hired as a non-executive director by Lanarkshire-based IT provider Nugensis, a limited company set up in 2011. An article in trade magazine Business Quarter last year said Rae had been ‘using his networks to raise the profile of Nugensis’.
The company markets the WardView system – a ‘digital whiteboard’ that helps track hospital patients. Software allows a whole ward to be pictured on a touch-screen display and links up the central patient database so an individual’s needs can be checked and amended in real time.
Although there are other systems available, Mr Neil announced in April 2014 that WardView had been granted favoured status. He revealed £2.2 million of extra funding for health boards but only to buy the Nugensis app.
The Health Secretary claimed the deal would create 20 jobs at the company, which has offices at Uddingston, Lanarkshire, Aberdeen and Warrington, Lancashire.
Mr Neil said: ‘This innovative system is already working well at hospitals across Scotland by enabling staff to have a view of their patients and wards at the touch of a finger.
‘This additional funding will enable more hospitals across Scotland to benefit from this system.’
WardView is now used in nearly every hospital in the country, cover- ing 720 wards and 20,000 beds. Documents show Nugensis’s net assets doubled from £377,336 to £744,961 in 2014, with cash reserves up from £453,481 to £1,138,929.
TaxpayerScotland director Eben Wilson said: ‘Sizeable public projects must go through a robust tendering process because it is vital taxpayers are assured their money is being spent properly.
‘It does seem odd that the momentum of the implementation of this technology across the NHS in Scotland is proceeding in a way that seems to favour only one company.
‘As questions are now being asked, the Scottish Government must be rigorous in providing an independent assessment of what has been contracted and how.’
But the Scottish Government said the deal had been done correctly and Mr Neil had not influenced the decision. Although it confirmed he had met Rae, it insisted the meeting was in August 2014 – after the decision had been taken.
A spokesman said: ‘WardView is one of several cutting-edge technology options proven to benefit patients, cutting time in hospital.
‘The previous Cabinet Secretary [Mr Neil] announced funding for the roll-out of such technology in May 2013 after it demonstrated excellent results in NHS Borders. Following this, expert clinicians and leads on
‘Proceeding in way that favours one company’
digital health around Scotland confirmed their support for WardView.
‘On that basis, a second round of funding, specifically for WardView, was announced in April 2014.’
No one from Nugensis was available to comment. Rae could not be contacted for comment.
The Government is embroiled in another cronyism row over £150,000 given to T in the Park organiser DF Concerts.
T in the Park moved to Strathallan, Perthshire, this summer after leaving its former home in Balado, Kinross-shire. Despite pre-tax profits of more than £4.5million, DF Concerts asked for a Government grant to help with the move.
Jennifer Dempsie, a former aide to Alex Salmond and a prospective SNP candidate, worked for DF Concerts and helped broker the deal, which was signed off by Culture Secretary Fiona Hyslop.
Although the Government says the grant was legitimate, critics have questioned the links between the company and senior SNP figures.