Rishi Sunak is facing questions over a possible conflict of interest after it emerged that a private healthcare firm handed a government contract to reduce regional NHS waiting lists is linked to a No 10 policy adviser. Bill Morgan, a founding partner of the PR and lobbying firm Evoke Incisive Health (EIH), joined Downing Street as a health policy adviser last November to help drive through NHS efficiencies. InHealth, a fee-paying client of EIH when Morgan was a founding partner, has since been awarded a contract as an independent sector-led diagnostic centre, to run the south-west network. There are about 114 NHS diagnostic centres, with those run by private providers set to increase from four to 12. Five of the new centres in the south-west from Cornwall to Bristol will be run by InHealth, which was founded by a British entrepreneur, Ivan Bradbury. Morgan is also a member of the elective recovery taskforce (ERT) convened by the health secretary, Steve Barclay, to cut waiting lists. It is understood Morgan no longer works for Incisive Health and has no financial connection or continuing interest in his former employer or InHealth. In a letter to the health minister Will Quince, who is chair of the ERT, Liz Kendall, the shadow social care minister, has questioned what measures were taken to manage potential conflicts of interests when the contracts were awarded, and whether Morgan was required to declare his past connection to InHealth when taking the No 10 job. A Labour source said: “This stinks. Rishi Sunak brought a private healthcare lobbyist into Downing Street and has now handed his former clients a plum NHS contract. “Sunak has to come clean about what appears to be a clear conflict of interest. The government should be focused on pulling the NHS out of the biggest crisis in its history, not rewarding private healthcare chums.” The Guardian understands the decision to approach InHealth and other independent sector providers to deliver the five diagnostic centres in the south-west announced on 4 August was taken before the formation of the ERT. Kendall said in her letter to Quince: “The [elective] taskforce recommendations advocate the use of spare private sector capacity – a proposal put forward by Labour back in January 2022 which, if adopted at the time, would have resulted in 330,000 fewer patients waiting for treatment today. “I understand that, of the 13 of the community diagnostic centres you now plan to launch, eight of these will be run by the private sector. I note in particular that an organisation named ‘InHealth’ has been awarded the contract to run the south-west network. “I further understand that the company is a former fee-paying client of Mr Bill Morgan – both a special political adviser to the prime minister and member of the elective recovery taskforce – and that the CEO of InHealth was one of seven private healthcare bosses present at the launch event for the elective recovery taskforce in December 2022. Your department has declined to publish the attendee list for this meeting and no minutes appear to have been taken.” Kendall also asked Quince what steps the government’s health department has taken to mitigate its exposure to future potential conflicts of interest. Downing Street says it has robust processes in place to manage any potential conflicts. Stella Vig, the NHS England clinical director for elective care, said the NHS had already increased use of the independent sector by more than a third since April 2021. Record numbers of people are paying for private healthcare, spending up to £3,200 on having a cataract removed and £15,075 on a new hip, amid growing frustration at NHS waiting lists. Across the UK last year 272,000 people used their own funds to cover the cost of having an operation or diagnostic procedure at a private hospital. That was up from 262,000 the year before and a sharp rise on the 199,000 who did so in 2019, the year before the Covid pandemic struck. There had been renewed focus on the prime minister’s views on private healthcare after the Guardian reported he was registered with a private GP practice that charges £250 for a consultation.