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.
2 Q 262 Back
| 
