The National Programme for IT in the NHS: an update on the delivery of detailed care records systems - Public Accounts Committee Contents

Conclusions and recommendations

1.  The Department has been unable to deliver its original aim of a fully integrated care records system across the NHS. Poor progress since 2002 has meant the Department has had to reconsider what the expenditure can deliver. Many NHS organisations will now not receive a system through the Programme which will not provide for the transmission of individual case records across the whole NHS. . The Department should review urgently whether it is worth continuing with all elements of the care records system, to determine whether the remaining £4.3 billion could be used to better effect to buy systems that work, are good value and deliver demonstrable benefits for the NHS.

2.  There has been a substantial reduction in how many NHS bodies will receive new systems but the Department failed to secure a comparable reduction in costs. This casts the Department's negotiating capability in a very poor light. In London, the Department's negotiations with BT resulted in far fewer systems to be delivered for only a marginal reduction in fee. We are worried that the Department will fare no better in its current negotiations with CSC, which has delivered only 10 of 166 of its 'Lorenzo' systems in the North, Midlands and East. The Department has been in negotiations with CSC for over a year, and told us that it may be more expensive to terminate the contract than to complete it, although we also note that CSC has informed the United States Securities and Exchange Commission that it may receive materially less than the net asset value of its contract if the NHS exercises its right to terminate the contract for convenience. Given the Department's failure to secure a good deal in its contract renegotiation with BT, and its weak position with CSC, we consider it essential that the Major Projects Authority now exercises very close scrutiny over the Department's continuing negotiations with CSC, and that Government gives serious consideration to whether CSC has proved itself fit to tender for other Government work. It is important that CSC, particularly given its proposed purchase of iSoft, does not acquire an effective monopoly in the provision of care records systems in the North, Eastern and Midland clusters. This could result in the Lorenzo system effectively being dropped as the system of choice and many Trusts being left with little choice but to continue with out-dated interim systems that could be very expensive to maintain and to upgrade, or to accept a system of CSC's choice. CSC should not be given minimum quantity guarantees or a licence to sell a product other than that procured and selected by the Programme within the LSP contract.

3.  The Department is unable to show what has been achieved for the £2.7 billion spent to date on care records systems. The Department failed to meet its commitment to report to the Committee by summer 2010 on the benefits delivered by the Programme. A statement of benefits to March 2010 was not provided to the NAO until May 2011 - more than a year out of date. The Department should, by September 2011, provide us with an updated statement of benefits to March 2011, which we will ask the National Audit Office to audit.

4.  We are very concerned at the lack of evidence of risk management of security issues which may arise as a result of medical records being held electronically. The Department must address possible compromises in data security.

5.  Weak management and oversight of the Programme have resulted in poor accountability for project performance. Sir David Nicholson has not been able to fulfil his duties as the Senior Responsible Owner for the Programme effectively, given his significant other responsibilities, weakening accountability for the Programme's extensive delays and increasingly poor value for money. It is essential that there is proper accountability for the Programme, especially since the current health reforms, according to Sir David, make it "quite difficult to shift a system like that into that environment"[2]. Sir David should now expect much closer scrutiny and oversight of his actions by the Major Projects Authority, but he must remain Senior Responsible Owner for the Programme so there is a clear line of accountability and responsibility for performance as well as continuity in managing the substantial risks that remain.

6.  NHS trusts will take over responsibility for care records systems from 2015-16, but they do not currently have the information they need about potential future costs. After the implementation of forthcoming health reforms, the organisations currently managing the Programme will no longer exist and the risks will transfer to NHS trusts. However, at present these trusts have no direct contractual relationship with existing suppliers and no information about the likely cost of using care records systems beyond 2015. The Department should write to every NHS Trust making clear the detailed implications of their future responsibilities for care record systems, and in particular the financial liability to which each trust will be exposed. This information should include information about exit costs from the LSP contracts and future maintenance and running costs for those Trusts that continue with the Programme, and this information must be provided within two months. It should also specify the support that the centre will provide to Trusts procuring outside the Programme, particularly where such systems can be shown to represent value for money to the NHS or greater functionality.

7.  It is unacceptable that the Department has neglected its duty to provide timely and reliable information to make possible Parliament's scrutiny of this project. Basic information provided by the Department to the NAO was late, inconsistent and contradictory. We are surprised that in its memorandum to us of 7 June 2011, two weeks after our hearing, the Department did not mention that it made an advance payment to CSC of £ 200 million in April 2011. The Department must provide timely and reliable information in future to support effective accountability to Parliament.

8.  According to Sir David Nicholson, the Department may have to think about an interim step - a transitional body of some description- creating the impression of major uncertainty about how this work should be managed in the future. We will return to this issue in the future.

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Prepared 3 August 2011