NHS IT Programme

Part of Opposition Day — [13th Allotted Day] – in the House of Commons at 12:43 pm on 6th June 2007.

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Photo of Stephen O'Brien Stephen O'Brien Shadow Minister (Health) 12:43 pm, 6th June 2007

The hon. Gentleman makes a valid point. It has often been confirmed by our local expert, the surgeon commander on my right, my hon. Friend Dr. Murrison, that that system was working perfectly satisfactorily and did not need to be hugely improved under the current system. However, there are still other systems that must be brought up to standard.

One of the major concerns with the NHS IT programme, and one which an independent review must address, is the seeming lack of an evidence base for it. In a recent British Medical Journal article on the subject, one trust director was quoted as saying

"One of the things they haven't done very well is to clarify some of the benefits...I haven't seen a good list of benefits".

Cost-benefit analysis is basic to any capital project, let alone one of this scale, costing billions, and especially when it is taxpayers' money. The paucity of the evidence base testifies to the hurried planning and procurement of the programmes. With at least £12.4 billion of taxpayers' money being committed, some cost-benefit analysis should have been done, and a robust business case established.

The growing cost of the programme has been the inevitable and wholly avoidable consequence. The programme was launched with the putative cost, as we know, of £5 billion, which was excised from the document. Once the contracts were signed, the ministerial line was that it would cost £6.2 billion over 10 years, although Lord Warner admitted on "Newsnight" that

"the full cost of the programme was likely to be nearer £20 billion".

The NAO put the figure of £12.4 billion on the programme, and the PAC has suggested that even that massive sum may be surpassed. To October 2006, only £918.2 million-worth of that sum had been delivered.

Despite the highest paid civil servant being in charge of Connecting for Health, the programme has suffered from a lack of leadership. In two years, there were no fewer than six "senior responsible owners" of the NHS IT programme at Richmond House. Lack of leadership was one of the key themes of this week's PAC report into Government IT. It highlighted the failure of Ministers across Government to meet the senior responsible owners of mission-critical and high-risk IT programmes, or to take a grip by meeting them sufficiently regularly. It also highlighted the low profile and high turnover of chief information officers and the lack of clarity about their roles.

To all of that we must add that one of the design flaws of the NHS IT programme has been its massive centralisation. The programme structure has, in effect, established several regional monopolies through local service providers. From the original four, there are now three providers serving five regions: the CSC Alliance in the north-west and west midlands, the north-east and the eastern clusters; Fujitsu Alliance in the southern cluster; and the Capital Care Alliance—CCA—in the London cluster. CSC took on two clusters from Accenture when it pulled out of the programme in September 2006.

Hospitals have been forced to accept the IT imposed on them by those local service providers, or in some cases have had to invest in costly interim solutions due to delays in the programme. A recent BMJ study into the implementation of the programme suggested that the Connecting for Health software is more expensive than software on the open market. One medical director said:

"A lot of things are being sold to us at a much higher price than we would have been able to get if we'd been in a real market situation, so the total costs to the NHS have been very high indeed".

Those regional monopolies have caused serious supply-chain concerns. The exit of Accenture—at an estimated loss to it of £250 million—was a big blow to the credibility of the programme. The supplier that has been most in the public eye is iSOFT. Its share price has plummeted twice—that is public information—and on 6 April the shares fell a further 40 per cent. It appears that iSOFT's previous accounting policy, which it has now had to abandon, was based on its receipt of letters of credit, centred around advance payments from NHS Connecting for Health. In evidence to the PAC on 26 June, Richard Granger of Connecting for Health stated that it would make an advance payment only when covered by a letter of credit from a bank. That is nice work if you can get it. [Interruption.] That completely undermines the Department's claim that suppliers get paid only when they deliver. [Interruption.] But as the Minister cannot be bothered to listen, she will not understand that. iSOFT is now looking for a buyer. Its main customer, CSC or Computer Sciences Corporation, has opposed a bid by an Australian firm. [Interruption.] The Minister says from a sedentary position that she finds what I am saying boring. The trouble is that she is so bored by IT that she has not bothered to have regular meetings, or to supervise or take a grip of the process. She needs to listen to a proper critique of where the Government are wasting taxpayers' money, and to take control for once of a programme for which the Government are deeply responsible.