Rising cost of NHS IT 'fiasco'

The costs of the multibillion-pound national health IT programme abandoned by the government are set to continue rising significantly, MPs have warned. The Commons public accounts committee issued the warning as it branded the scheme one of the “worst and most expensive contracting fiascos” in the history of the public sector.

It is two years since ministers shelved the ambitious scheme, intended to create electronic patient records for use across the NHS in England, but there are still outstanding costs and some elements of the project have continued in different parts of the country.

When the government announced the failed National Programme was being dismantled it put the bill at £6.4bn. Officials later estimated the total would reach £9.8bn.

But the PAC said the full costs of the scheme were still uncertain as the latest forecast did not include the bill for terminating Fujitsu’s contract for care records systems in the south of England, or other future costs.

Taxpayers were continuing to pay the price for the failures of the Department of Health and its contractors, the MPs said.

They also highlighted the government’s attempt to renegotiate contracts worth £3.1bn with company CSC, saying officials had been left in a “weak” negotiating position because they failed to meet their own contractual obligations to provide 160 trusts to take on a new system.

PAC member Richard Bacon said: “Although officially ‘dismantled’, the National Programme continues in the form of separate component programmes which are still racking up big costs.

“The original contracts with CSC totalled £3.1bn for the setting up of the Lorenzo care records system in trusts in the North, Midlands and East. Despite the contractor’s weak performance, the Department of Health is itself in a weak position in its attempts to renegotiate the contracts. It couldn’t meet the contractual obligation to make enough trusts available to take the system.

“The department is now assuming that just 22 trusts will take the Lorenzo system.”

He added: “We still don’t know what the full cost of the National Programme will be. The department’s latest estimate of £9.8bn leaves out the future costs of Lorenzo or the potential large future costs arising from the department’s termination of Fujitsu’s contract for care records systems in the South of England.

“Parliament needs to be kept informed not only of what additional costs are being incurred, but also of exactly what has been delivered so far for the billions of pounds spent on the National Programme.

“The benefits flowing from the National Programme to date are extremely disappointing. The department estimates £3.7bn of benefits to March 2012, just half of the costs incurred.

“This saga is one of the worst and most expensive contracting fiascos in the history of the public sector.

“Yet, as the much more recent Universal Credit project shows, there is still a long way to go before government departments can honestly say that they have learned and properly applied the lessons from previous contracting failures such as the National Programme. It should be plain to anyone that we are witnessing systemic failure in the government’s ability to contract.

“Given the department’s track record with the National Programme, it is very hard to believe that the paperless NHS towards which the department is working has much chance of being achieved by the target date of 2018.”

Original article from www.hsj.co.uk Health Service Journal