Boris Johnson’s most senior aide, Dominic Cummings, is facing conflict of interest accusations over a consultancy role he undertook for a government-endorsed healthcare startup that is in position to receive a share of a new £250m flagship public fund.

Cummings advised Babylon Health, a controversial artificial intelligence (AI) firm working within the NHS, on its communications strategy and its senior recruitment, an investigation by the Guardian and the Bureau of Investigative Journalism can reveal.

A GP app developed by the company was later backed publicly on multiple occasions by the health secretary, Matt Hancock.

The former Vote Leave campaign director’s formal role with Babylon concluded in July last year but he continued to advise the firm about recruitment until September 2018 – the same month Hancock visited the firm and told staff he wanted the NHS to help the company expand.

In August this year, shortly after Boris Johnson entered No 10 with Cummings as his top adviser, Downing Street and the Department of Health announced a £250m fund to boost the use of AI in the NHS by using automated systems for diagnoses or data analysis. Although the money has yet to be allocated, Babylon – which welcomed the announcement – is well placed to benefit as a key player in the AI field.

Profile Who is Dominic Cummings? Show Dominic Cummings, the son of an oil rig project manager and a special needs teacher, was born in Durham in 1971. He attended a state primary school followed by the fee-paying Durham school and, in 1994, Oxford University, where he studied ancient and modern history. After three years living in Russia, where he attempted to set up an airline connecting Samara in the south with Vienna, the then 28-year-old became campaign director of Business for Sterling, which worked to prevent Britain from joining the euro. Although he has never, as far as anyone knows, been a member of a political party, Cummings was headhunted to be director of strategy for the then Conservative leader, Iain Duncan Smith, in 2002. While he was seen as a “young, thrusting moderniser”, Cummings quickly offended party traditionalists. He quit the job after only eight months, describing Duncan Smith as incompetent. Following the 2010 general election, the then education secretary, Michael Gove, appointed Cummings as his chief of staff. Many in Whitehall found Cummings as difficult as he found them. In 2013, civil servants in the Department for Education complained to the Independent of an “us-and-them, aggressive, intimidating culture” created by Cummings and Gove. He never hid his disdain for the workings of Whitehall and has derided Westminster figures in eye-catching media interviews and published rambling blogposts that are obsessed over by Westminster insiders. He described prime minister David Cameron as “a sphinx without a riddle”, and former Brexit minister David Davis as “thick as mince, lazy as a toad, and vain as Narcissus”. In 2015, Cummings and the political strategist Matthew Elliott founded Vote Leave, which was designated by the Electoral Commission as the official EU referendum leave campaign in April of the following year. Since the EU referendum, its tactics have been the subject of a series of high-profile scandals. Vote Leave’s use of data analytics has been scrutinised after the Observer reported that the data-mining company Cambridge Analytica had links to the Canadian digital firm AggregateIQ, on which Vote Leave spent 40% of its campaign budget.

In July 2018, the Electoral Commission announced Vote Leave had been found guilty of breaking electoral law by overspending, following testimony from whistleblowers. The group was fined £61,000 and referred to the police.

Cummings has used his blog to furiously defend himself and the Vote Leave campaign. In March 2019, he was found in contempt of parliament for refusing to appear at a committee of MPs investigating fake news. Frances Perraudin

Babylon already holds a contract with Hammersmith and Fulham clinical commissioning group (CCG), in west London, to provide NHS GP appointments via phone and video link to patients through its GP at Hand app. Although more than 50,000 have signed up for the service, the app is said to have increased the cash-strapped CCG’s costs, creating a £21.6m funding hole [paywall].

Earlier this year it was confirmed that the GP app was set to be introduced in Birmingham and this month Babylon announced plans to take it to Manchester in 2020.

Babylon recently raised $550m (£449m) in a new funding round led by Saudi Arabia’s sovereign wealth fund, valuing it at $2bn. It is recruiting heavily, with more than 40 adverts for AI-related roles listed on its website.

There are no political rules requiring special advisers to disclose previous private sector roles.

However, the shadow health secretary, Jonathan Ashworth, said Cummings’ undisclosed advisory role raised serious questions about potential conflicts of interest.

“The links between Dominic Cummings in the heart of Downing Street, the health secretary and this AI health firm are increasingly murky and highly irresponsible,” he told the Guardian.

“Mr Cummings’ work for this company raises serious questions about a potential conflict of interest, given the firm could be in line to receive public money from this new £250m AI fund.

“We need to know if he declared his work for the firm to the cabinet secretary when he joined the government payroll. If not, why not?”

Andy Slaughter, the Labour MP for Hammersmith and Fulham where Babylon’s GP app launched, said: “Babylon is an organisation which is, via its GP at Hand app, distorting and undermining the whole basis on which primary care has worked since the founding of the NHS.

“It’s not just privatisation, it is undermining the ability of local GPs to serve their patients in a sustainable way … To learn that the prime minister’s top adviser has been paid to help the firm is deeply concerning.

“Cummings’ work for Babylon raises a clear conflict of interest [concern].”

Hancock repeatedly boosted Babylon and promised to help change rules to benefit the company. In September 2018, soon after his appointment as health secretary, he visited Babylon and told staff how much he admired their work and wanted the NHS to help the company grow.

In an accompanying Telegraph interview, Hancock praised the company and said he used its GP app. “GP at Hand is revolutionary,” he told the newspaper. “I want to see GP at Hand available to all, not based on their postcode.”

Hancock was criticised for a further endorsement of Babylon’s app in a feature sponsored by the company in the Evening Standard two months later.

The app is controversial with some NHS clinicians, who are concerned it could leave conventional GP services underfunded and with only the most difficult patients. They also have concerns about the reliability of its AI for diagnosis.

The decision to allocate £250m a year to AI projects in health – via NHSX, a “healthtech” public body launched by Hancock earlier this year – could benefit Babylon, experts suggest.

Sam Smith, the head of policy at the patient confidentiality campaign group MedConfidential, said there was good reason to believe a large chunk of the £250m would go to private companies such as Babylon given the government has previously required NHS data and innovation projects to have commercial partners on board.

“The current government has a policy that all analytics must involve private companies, so whether [private companies] get the whole £250m or just most of it is a political decision,” he said. “A public option for AIs used by the NHS is necessary to ensure a competitive market.”

Babylon confirmed Cummings was paid via his company, Dynamic Maps Ltd, which he set up in October 2017 as the sole director. The firm – said to provide “information technology consultancy activities” – has net assets worth £78,751, according to Companies House records.

Downing Street declined to answer detailed questions about Cummings’ consultancy work, including his earnings from Babylon, which other firms he had advised, and why it had not been publicly disclosed. A spokesman said: “Special advisers act in accordance with special advisers’ code and the relevant provisions of the civil service code, acting with integrity, and serving the public interest. Special advisers have no role in authorising expenditure of public funds.”

The Department of Health did not respond when asked whether Hancock was aware of Cummings’ role at Babylon.

In a statement, Babylon stressed Cummings’ role had been a “very short piece of one-off consultancy to draft a communications strategy”, with 10 days worked in total. “Babylon helps the NHS by reducing A&E visits by 3.8% (4,560 fewer visits per year at our current size) – and at no extra cost to the NHS. Our symptom checker tool has been used over 1.5m times and no patient has ever reported a serious problem.”

It said of the government’s £250m fund: “Governments around the world are investing in AI and it’s brilliant that the UK government is following suit.”