Examination of Witnesses (Questions 240-259)
DEPARTMENT OF
HEALTH, PROFESSOR
PETER HUTTON
AND DR
ANTHONY NOWLAN
26 JUNE 2006
Q240 Greg Clark: Just on that, yes
or no.
Mr Jeavons: —renegotiation
of the commitment from the NHS to the managed employee scheme.
In other words, the NHS was committed and that commitment was
changed as part of that contract change.
Q241 Greg Clark: That is the same
thing, is it not? If they were committed to supplying some staff
and they have bought themselves out of that, they have effectively
paid commercial suppliers.
Mr Jeavons: That was part of the
overall negotiation.
Q242 Greg Clark: You seem to be playing
with words. The original contract was renegotiated and it is now
less advantageous to the local NHS.
Mr Jeavons: The NHS was committed.
There was a financial value in the original contract which committed
the NHS to commit NHS staff and that was changed as part of the
contract change notice.
Q243 Greg Clark: Why was it changed?
Mr Jeavons: Because experience
showed that it would be easier to deliver the contract without
that commitment. The main reason for that was that the NHS found
the opportunity cost of NHS staff was higher than the value they
had placed on them and that is what resulted. It was a very sensible
change.
Q244 Greg Clark: When it came to
Fujitsu in the southern region, how much did the NHS pay to be
released from that obligation?
Mr Jeavons: I cannot remember.
Sir Ian Carruthers: We shall get
you a note on that.[16]
Mr Jeavons: We shall give you
the exact number.
Q245 Greg Clark: But it bears no
relation to £19 million.
Mr Jeavons: We shall give you
a note on that.
Q246 Greg Clark: Does it bear any
relation to £19 million? Is that a figure that you recognise?
Mr Jeavons: It could be around
£19 million.
Q247 Greg Clark: Is it a figure you
recognise, yes or no.
Mr Jeavons: If I could remember
the figure, I would tell you.
Sir Ian Carruthers: We shall give
you a note.
Q248 Greg Clark: Is £19 million
a figure you recognise to be released from this obligation?
Mr Jeavons: I recognise the figure
of £19 million from press reports.
Q249 Mr Bacon: What is the figure
for CSC in the North West? How much will the NHS have to pay to
CSC? There is a contractual obligation to pay £6.9 million
per year for 10 years, which is £69 million, is it not, if
the NHS does not supply the requisite number of staff? Are you
negotiating your way out of that one and what is it going to cost?
Is it correct that it is £37 million?
Mr Jeavons: I cannot recall the
number. We can give you that.
Chairman: Send us a note.[17]
Q250 Mr Khan: How soon before 100% of
bookings are made by Choose and Book? It is 12% now.
Mr Granger: It is more than 12%.
Q251 Mr Khan: Good. How soon then?
Dr Mark Davies: I wish I had a
graph so I could show you the trajectory.
Q252 Mr Khan: I just need a time
line.
Dr Mark Davies: It is going up.
The intention is for 90% of referrals from GPs to first consultant
outpatient appointment to be reached by March next year and we
anticipate being on plan for that.
Q253 Mr Bacon: Going back to this
question of paying to be released from obligations, were the NHS
trusts locally, the local acute hospitals, aware that there were
these contractual obligations which had been agreed centrally
with the main LSPs such as Fujitsu and CSC and that if they did
not supply the number of staff they were supposed to supply, the
NHS would have to make financial payments? Were they aware that
if they did not supply the required staff the NHS would have to
make financial payments?
Mr Jeavons: I believe they were
aware and the reason I can say that is because I was personally
involved in discussions where these arrangements were described.
Q254 Chairman: There has been a lot
of confusion Mr Shapcott about the £6.2 billion and the £12.4
billion. When was the £6.2 billion cost announced?
Mr Shapcott: At the time the contracts
were placed, that is the end of 2003-beginning of 2004.
Q255 Chairman: So it is not so much
that this is an overspend, it is just that you, as a result of
your work, have uncovered that it is now going to cost the public
sector £12.4 billion. Is that right? At the time of the publication
of the Report there was some reportage that the private sector
might be going to take the extra cost. It is going to be the public
sector, is it, in the shape of the NHS trusts? Is that right?
Mr Shapcott: The additional costs
are falling on the public sector.[18]
Q256 Chairman: The £6 billion extra?
Mr Shapcott: Yes.
Sir Ian Carruthers: May I say
that some of the £6 billion extra is not actually real cost
it is a mixture of forecasting, extrapolation and other things?
We need to be cautious.
Q257 Chairman: If you want to send
us a note, here is your chance. May I ask about this famous meeting
with the Prime Minister in February 2002? Who was at that meeting?
Mr Granger: Nobody who is here,
so I am sorry, but we cannot comment.
Sir Ian Carruthers: Nobody who
is here.
Q258 Chairman: Can you let us know?
Sir Ian Carruthers: I am not sure
how we do that, but we can try.[19]
Q259 Chairman: Did the Prime Minister
give the provisional go-ahead for the NHS National IT Programme
which would last two years and nine months? This has been reported.
Can you get us a note on it?
Mr Granger: Delivering 21st
Century IT Support to the NHS is the document which was the
starting point for the programme.
16 Note by witness: At the time of the contract
of award, Fujitsu reduced its price by £34 million on the
grounds that the NHS would make staff available to them to perform
work that the supplier would otherwise have performed. £19
million was paid to Fujitsu to remove this obligation. Back
17
Note by witness: The contractual obligation with CSC was
for the NHS to make staff available to them to perform work that
the supplier would otherwise have performed. The default position
in the contract was a payment of £6.9 million per year which
could have amounted to £62.1 million over the nine years
of the contract if the NHS could not provide the necessary staff.
In March 2006, NHS Connecting for Health reached an agreement
with CSC under which this obligation on the NHS was cancelled
for payment of £5 million. Back
18
Ev 51 Back
19
Note by witness: The principal attendees at the meeting
with the Prime Minister in February 2002 were: Rt Hon Tony Blair
MP, Prime Minister, Rt Hon Alan Milburn MP, Secretary of State
for Health, Rt Hon Andrew Smith, Chief Secretary to the Treasury,
Lord Macdonald of Tradeston, Chancellor of the Duchy of Lancaster,
Lord Hunt of Kings Heath, Parliamentary Under-Secretary, Department
of Health, Sir Richard Wilson, Cabinet Secretary, Sir Nigel Crisp,
Permanent Secretary, Department of Health & Chief Executive
of the NHS and Professor Sir John Pattinson, Director of Research,
Analysis and Information, Department of Health. Back
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