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The Secretary of State for Health (Andy Burnham): I want to begin by challenging the myth put around by the hon. Gentleman that the NHS IT programme has been a waste. The programme has changed the way in which the Government pay for IT by creating a contract whereby we pay for what we get from suppliers only when it is fully delivered. Indeed, we have been praised by the National Audit Office for creating such a contract.
The national programme comprises a number of key elements that are already essential to the delivery of front-line services. For instance, digital X-rays and scans, which facilitate faster safer care, are in place in 100 per cent. of hospital trusts; electronic prescriptions are now the norm in general practitioner systems; choose and book-the electronic booking service-provides choice and convenience for patients; GP2GP-the electronic transfer of health records between GP practices-will in time support our policy of abolishing practice boundaries, giving patients more choice; and we also have the summary care record, whereby key information from the patient's GP record, including current prescriptions and reactions to medicines, can be made readily available.
To put it simply, the programme is a key part of delivering modern, safe, joined-up health care. It is supporting the ongoing reform of the NHS by giving choice and convenience to patients. The NHS could not function without it. However, in the current climate it is right to look again at efficiencies and value for money on all big projects, and at the Chancellor of the Exchequer's request-and that is what the Minister of State, Department of Health, my right hon. and learned Friend the Member for North Warwickshire (Mr. O'Brien) and I have been doing across my Department.
As part of that, I have looked closely at options for savings on the NHS IT system; it was to those that the Chancellor referred yesterday. The details of those discussions with the IT companies are commercially sensitive and ongoing, but I can give the House this update. My aim in conducting this exercise has been to ensure that the elements of the IT programme that can deliver most benefit to patients and front-line staff are taken forward, while cancelling certain additions to the system where it makes sense to do so.
Let me be absolutely clear: we have no intention whatsoever of cancelling the programme overall, not least because it is already making the NHS safer, more efficient and more convenient for patients. However, we are discussing with our suppliers potential reductions to the scope of the systems and the cost savings that could be generated. In addition, we are looking seriously into the internal savings that can be made from the costs of running the programme. In the light of that work, I can confirm to the House that we are working towards achieving a reduction of £600 million in the lifetime costs of the programme.
That means that we will now pare back the programme to the core elements that have been identified as critical by clinicians. Our aim is to give trusts more flexibility
and choice of IT systems, within a framework provided by existing contracts, to keep the benefits of a national approach. Specifically, that could include the IT systems that clinicians have told us are most important to them, such as electronic prescribing; enabling local innovation to take place by linking national systems with those provided by local service providers; and allowing the NHS to design IT systems to fit its local needs.
Mr. Lansley: Oh dear, Mr. Speaker. Rarely have we seen a more abject example of the Government's incompetence. They took central control of NHS IT- £7.5 billion in central contracts and £5 billion in associated costs on top of that. Seven years on, they are over budget and under-delivered. The electronic patient record is four years late at the very best-if it will ever happen. Everyone told them that big IT projects had to be user led, but that one was not. We told them that the system should be decentralised, with local procurement and patient control over health records, but they did not listen. Now the Chancellor of the Exchequer says it has to stop. The Secretary of State is clearly not in charge. The Government got it wrong and the Treasury is now belatedly putting a stop to the continuing disaster.
Let me ask the Secretary of State some questions. Will he now stop the centralised care record system and allow local procurement of care record systems to national standards? Will he allow general practitioners and hospital trusts to be purchasers of their own IT hardware and software from open sources of supply? Will he now be open about the contractual situation with the three local service providers, and about whether, as we suspect, it would now be possible to abandon the existing contracts without penalties-in either direction-because the costs of fulfilling the contracts to the companies exceed the value of the contracts to them? That could deliver up to £4 billion, unspent under those contracts, for support for front-line IT and other services in the NHS.
Will the Secretary of State now have the grace to acknowledge the Government's failure, the billions of pounds spent without delivery, the spiralling opportunity costs of delays, the confusion and frustrations over IT and choose and book, but-worst of all-the resulting lack of IT innovation in our hospitals, when it has the potential to be of such benefit to patients in managing their care and minimising errors in treatment? Will the Secretary of State just admit that they got it hopelessly wrong?
Let me begin with a phrase that the hon. Gentleman used towards the end of his contribution, about the "lack of IT innovation" in hospitals. I do not know how many he has visited recently, but I do not understand how he can make such a comment on the Floor of the House. The step change in the quality of images available to clinicians is evident to anybody who looks at the NHS today, and because people all around the hospital can view clear images, that has been a real benefit for patient safety across the NHS. I simply do not believe that there has been no innovation or improvement in services. Indeed, clinicians-not
Ministers-have today spoken in favour of the changes brought about by the national programme for IT across the NHS- [ Interruption. ]
Mr. Speaker: Mr. O'Brien, you have developed a bad habit of chuntering away from a sedentary position on the Opposition Front Bench, in evident disapproval of the answer from the Minister. The question has been asked: the answer must be heard.
Andy Burnham: Before I was so rudely interrupted, I was saying that it is clinicians who have come out today to say that they value the improvements that the national programme for IT has brought. The hon. Gentleman would do well to listen to those voices before he comes here and makes sweeping statements suggesting that that programme has brought no benefit to patients.
The hon. Gentleman said that the programme was over budget and under-delivered. In my statement I mentioned the views of the National Audit Office, and I hope that he will acknowledge that the programme has been praised by the NAO. Its 2006 report said:
"The Office of Government Commerce considered there to be many good features in the procurement process for wider application to government IT procurement. These included elements of contract innovation, which it has built on to develop its good practice guidance."
It is simply not true to say that this programme is flawed and has not delivered benefits: it has delivered considerable benefits to the NHS and has improved the way in which the NHS contracts for IT. We get what we pay for, and the NHS has learned the lessons of IT failures in the past.
The hon. Gentleman said that the programme was over budget and under-delivered: it is not, and never has been, over budget. The last NAO report confirmed that the cost of the original contracts had not changed and that the overall programme costs, including NHS costs and the costs of additional items such as payment by results and the 18 weeks, are substantially unchanged from the figure of £12.4 billion in the earlier NAO report.
The hon. Gentleman asked about the care records system. That will be a matter for local choice-[Hon. Members: "Ah!"] I said in my statement that we wanted to create a system in which acute hospitals had more choice and flexibility in relation to their IT requirements within a national system. He seems to reject the benefits of a national system across the NHS, but we do not. We believe that there are significant benefits from a national health service having a programme of IT that can link up clinicians across the system. We further believe that it is safer for patients if their records can be accessed across the system.
Mr. Speaker: Order. I do not think that we need to go into that. I know that the Secretary of State has been provoked by quite a lot of sedentary chuntering, which I have just deprecated, but may I urge him to be economical in his replies? I am keen to get Back Benchers in as well.
Mr. David Heath (Somerton and Frome) (LD): The Secretary of State was provoked into whistling in the dark by claiming that the programme had been a success. He quoted the NAO report, but did not the Public Accounts Committee conclude in January that the programme was, among other things, "very disappointing," and
"not providing value for money,"
"understandable concerns about data security"?
That does not sound to me like a system that is going well. Is this not the classic case of an IT programme that is too big, too expensive, too late and insufficiently planned? By building the system from the top down, the Government have smothered the option of local schemes with interoperability, which would, I agree, have been a better solution.
Do the enormous compensation counter-claims by suppliers of which we read represent a contingent liability against the NHS? If so, does that mean that they will be paid at the expense of front-line services? The Government's dithering over cancellations of quite large elements of the scheme has resulted in eye-wateringly large amounts of money being sunk in a scheme that has produced nothing like the benefits claimed for it, but which has, I am afraid, used a great deal of NHS money for very little result.
Andy Burnham: The hon. Gentleman also seems to have misunderstood the very nature of the contract. It was an innovative contract that meant that the NHS paid only once it received the system and the system had been passed over and was operational. That was a step forward in how the NHS paid for IT systems.
The hon. Gentleman quoted the NAO at me, but the NAO recognised the improvement in contracting that came with the system. If he is saying that it is not right, in the current climate, for me to take a look at the system and see whether we can make savings, then quite honestly I disagree with him. It is right that we should look at the system again in the current climate and, where we can, make savings.
Let us be absolutely clear: we are being led by clinicians on this issue. They are saying to us that they value the improvements in patient safety and the reduction in errors that have come with the national IT programme. The British Medical Association issued a statement today to that effect, and I think that I would prefer to listen to the BMA than to the hon. Gentleman.
We can make savings and pare the system down to the core elements that have been identified as important by the clinical community. If I may, let me give the hon. Gentleman a specific example of those changes. We have made a big investment in GP systems. GP systems are working well across the country and have high levels of satisfaction. GPs are happy with them and they are internationally recognised. Recognising that, we have agreed that we will not now go ahead with the replacement of further enhancements to that system, because people are happy with it. It is working well, and technology makes it possible for those parts of the system to talk to other parts.
We are looking at the system again in a new financial context, but the technology also makes possible other developments that were not available to us when the programme began. It is right that we should always re-examine the system in the context of current developments.
Andrew Miller (Ellesmere Port and Neston) (Lab): In rejecting the siren voices from those on the Opposition Benches, who clearly know very little about computer systems, may I ask my right hon. Friend to undertake some research into the productivity gains that some of the systems have produced? As a customer of the health service over a number of years and from discussions with consultants, I can say that it is unambiguously clear that massive improvements have been made. However, they need to be studied and published, so that people understand properly the value of that incredibly sensible investment.
Andy Burnham: I could not agree more with my hon. Friend. For instance, the widespread use of the choose and book system in general practice makes it much easier for GPs to have direct access to referrals in secondary care. I would argue that that cuts out significant amounts of time in the referral process. It is also better for patients, because they can see in their GP surgery, and have explained to them, the options open to them in booking a secondary appointment. I agree entirely with my hon. Friend: there are huge productivity gains to be had for the NHS and it is right that we press on with the system.
Mr. Richard Bacon (South Norfolk) (Con): I am left gasping by this woeful performance. The Secretary of State talked about GPs doing well, but GP Systems of Choice was the reason why they were doing well-and that system came before the national programme. It is also no accident that he referred to digital scanning. That was added to the programme in September 2004, and it is an example of something that worked; it had nothing to do with central patient records. I could go on about this for ages, but you would not let me, Mr. Speaker. Can the Secretary of State explain how the NHS could not operate without the system, as he says, while at the same time the Chancellor of the Exchequer says that it is of no value to the front line? Which is it?
Andy Burnham: I said clearly that there are elements of the scheme that can now be pared back. I also made it clear that one of those elements was the enhancement to the GP system, which is unnecessary because GPs are happy with how the system is working now. If the hon. Gentleman is saying that there have been no benefits for hospitals from the PAC-picture archiving and communications-system, I do not agree with him. There have been significant benefits for patient safety and the reduction of errors. The strong support from clinicians for the system that they now have refutes what the hon. Gentleman has just said.
Mr. David Anderson (Blaydon) (Lab): In conducting the review, will the Secretary of State also look at the business service authority's plans to outsource its IT infrastructure? In doing that, it has ignored the views of the work force about where the greatest savings could be made.
Andy Burnham: My hon. Friend raises a separate issue, and I promise to come back to him with a detailed reply. It is important in the coming period for the NHS to make savings from back-office functions. That is the right thing to do in the current climate, so that we can put every possible support into the NHS front line. I will give my hon. Friend a detailed answer on shared business services.
Mr. John Baron (Billericay) (Con): The history of this Government's involvement in major IT projects has been woeful, as was confirmed by the latest Public Accounts Committee report. For future reference, will the Secretary of State explain why this major IT programme was imposed from the top, rather than being user led?
Andy Burnham: It was both. There was a clear drive to improve IT across the NHS, and I make no apology for that. To support the reform in the NHS that this Government wanted to see, we needed a better IT system that reflected a national health service, and could be interoperable across the huge NHS system. Choose and book has facilitated the policy of giving patients choice, and I have mentioned the GP2GP system in which whole patient records can be transferred electronically. That will soon support the abolition of practice boundaries, so that people can have a full choice of GP. We are supporting reform in the national health service, but we have listened at all times to the voices of the clinicians. That is why they have come out today and strongly supported the system.
Mr. Gordon Prentice (Pendle) (Lab): A quarter of all prescriptions go to pharmacies electronically; I think that that involves about 155 million prescriptions. How will my Friend's statement today affect the future of the electronic prescription service?
Andy Burnham: My hon. Friend is right to focus on the potential benefit of electronic prescribing. In my view, it could be further developed. He cites a figure for electronic transfer between GP surgeries and pharmacies, and I think that there is scope for further progress so that we could move to a paperless system for prescriptions. I will give him an update in due course, but this is an important area that is working. As I said in my statement, where the system is working, we will press on and ensure that we derive full benefits for the NHS front line.
Dr. Richard Taylor (Wyre Forest) (Ind): If there is any further delay in the summary care record, will the Secretary of State look at the work being done by Coventry university and the City university, London? They are producing a most exciting, cheap, simple, personalised smartcard with an extendable memory stick, which could solve most of the problems of the summary care record.
I can give the hon. Gentleman an assurance that I will take a look at that particular system. As I said to the hon. Member for Somerton and Frome (Mr. Heath) a few moments ago, as we hear of good practice around the system and as developments in technology make it possible for new developments to be considered, it is always right for us to reflect on them to see whether we can improve the system. Knowing the
hon. Gentleman as I do, I suspect that that initiative has the strong endorsement of clinicians and has been led by clinicians, so I give him the assurance that I will take a further look at it.
Rob Marris (Wolverhampton, South-West) (Lab): Of the NHS IT programme, the Secretary of State said earlier today in the House that the Government would "only pay once it has been received and is operational". As a measure of the proportion of the NHS IT programme that is operational, will the Secretary of State tell the House what percentage of the cost has been paid by the NHS so far?
Andy Burnham: I have a precise figure, but it is not in front of me right now. I can tell my hon. Friend, from memory, that I believe that about 40 to 50 per cent. has been paid out so far. While the overall contract value has not changed, with this contract we pay only as we receive the benefits. I will come back to my hon. Friend with the precise figures. As of today, however, we are making clear our intention to make £600 million savings from the overall contract value, which will be achieved by paring back elements of the system that we do not believe are any longer necessary.
Mr. David Jones (Clwyd, West) (Con): Will the Secretary of State please say what the effects of the proposed cuts will be on the interoperability of the English and Welsh NHS IT systems? This has already been a cause of concern to, among others, the BMA in Wales.
Andy Burnham: I am afraid that I will have to reply later to the hon. Gentleman about whether the changes that we are announcing today will have any impact on hospital administration in Wales, but I give him an assurance that I will come back to him on that subject.
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