A PwC-backed startup received tens of millions of taxpayer dollars through a closed, non-competitive grant to develop a digital mental health platform, which was scrapped due to health workers finding it an administrative burden.
Policy experts and transparency watchdogs have raised alarm about the grant and called on the federal government to explain why the money was not allocated through an open and competitive process to ensure value for money.
In June 2017, the federal Department of Health and Aged Care entered a funding agreement with Innowell Pty Ltd for a series of collaborative research trials known as Project Synergy. Innowell Pty Ltd was established in February 2017, Asic documents show, with one of the largest shareholders being PwC.
A department spokesperson told Guardian Australia a total of $33m in funding was allocated to Innowell between 2017 and 2019 “via a closed non-competitive process” and that “PwC’s relationship with Innowell Pty Ltd was declared to the department”.
“The aim of Project Synergy was to understand how a digital technology solution, the Innowell Platform, could assist mental health service providers to improve mental health outcomes for their clients,” the spokesperson said.
Asked to explain how the grant was allocated, the spokesperson only said: “The decision to directly fund Innowell, and not go to open tender, was a decision of the government at the time”.
Charles Maskell-Knight, who spent more than two decades as a senior public servant in the health department, said it was difficult to see how the closed tender met a requirement for taxpayer money to be spent “efficiently, effectively, economically and ethically”.
“Testing the market allows the officer entering into the contract to be assured that it does represent value for money for the commonwealth,” said Maskell-Knight, who is now a visitor with the Australian National University’s national centre for epidemiology and population health.
“In the absence of a competitive process there would need to be a very solid case that the services to be delivered under the contract could not be obtained from any other supplier, and that the expenditure was economical. This is particularly the case for a multi-year contract worth tens of millions of dollars.”
The research director of the Centre for Public Integrity, Catherine Williams, said closed, non-competitive grants “should only occur when there are exceptional circumstances to justify it”.
“The default approach should be an open, competitive approach that is more likely to achieve value-for-money,” Williams said.
The federal health department was asked by Guardian Australia to provide documentation or reasoning explaining why there was not a competitive grant process and how the decision was made, but declined, only repeating it was a government decision.
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The Innowell platform was built and trialled across a number of NSW mental health services, with the Project Synergy trial concluding in June 2021 and a final report submitted to the federal health department the following month.
Both the federal health department and the NSW health department confirmed there has been no further use of or investment in the Innowell platform by the governments.
“The platform had a mixed response particularly by practitioners, many of whom have, at least initially, perceived it as adding another administrative burden to their work,” the federal department of health spokesperson said.
Instead, the federal government allocated a portion of $111m in digital services funding in the 2021-22 budget towards transforming the government’s existing Head to Health website into a more comprehensive national mental health platform.
The federal health minister, Mark Butler, was contacted for comment, but did not respond.
A PwC Australia spokesperson said the consultancy firm’s involvement with Innowell was “about creating a shared value investment to support thousands of individuals across workplaces and clinical care to improve mental health”.
“We make all appropriate disclosures of our involvement and shareholding in proposals relating to digital mental health,” the spokesperson said.
