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

1  Progress in implementing the systems and value for money to date

1. By March 2011, the Department and the NHS had spent £2.7 billion on care records systems.[3] The original aim of the Programme was for these systems to be delivered across the NHS by 2007 and for every NHS patient to have an electronic care record by 2010.[4] This has not been achieved and the Department acknowledged that it will not now deliver care records systems to all NHS organisations under the Programme and that its original aim will not be fulfilled.[5]

2. The Programme was inherently risky from the outset and, when the Department signed the contracts for the delivery of care records systems in 2003-04, the suppliers did not have a product to deliver.[6] The Department reported, however, that the Programme had passed a number of risk assessments and that Ministers were aware of the risks.[7] Some nine years later, a substantial number of systems are still to be implemented and those systems delivered so far are not yet working in the way that the Department intended them to.[8] The Department acknowledged that the delivery of a one-size-fits-all system to the NHS was a massive risk and has proven to be unworkable.[9] The Department also recognised that care records systems would have been easier to deliver if there had been more clinical engagement at the outset of the Programme to help define specifications for the required IT systems.[10]

3. There have been major delays in the North, Midlands and East where just 10 of 166 trusts have received only the most basic 'Lorenzo' system, and no system has yet been successfully delivered in a mental health trust.[11] Pennine Care Trust, the mental health trust that was acting as an early adopter, rejected the system in April 2011 following a number of missed implementation targets, and is examining other options to meet its IT needs.[12] CSC acknowledged the delays in developing and delivering Lorenzo and reported that some of these delays had been caused by financial and managerial issues with its supplier, iSoft, and by the need to adjust for the complexity of the NHS.[13]

4. The delays in developing and delivering Lorenzo have meant that around 80 interim systems have been delivered in its place.[14] The Department reported that by March 2011 it had paid CSC £105 million for these systems.[15] It confirmed that many of these interim systems will not now be replaced with Lorenzo, even though these systems were previously considered by the Department not to meet the aims of the Programme.[16] The Department made no assessment of how much these interim systems would have cost had they contracted for them from the outset of the Programme.[17] CSC confirmed that, if finalised, the revisions to its contract with the Department would result in reductions to the number of systems to be delivered and the functionality to be provided.[18]

5. Difficulties in delivering care records systems, particularly in acute hospitals, have required the Department to significantly revise its approach in London, moving away from delivering standard systems towards more locally tailored products. The introduction of local tailoring has, however, resulted in significantly higher costs. The Department has removed half of acute trusts, all GP practices and the London Ambulance service from its contract with BT - but this significant reduction in scope has led to cost reductions of just £73 million against a contract value of over £1 billion.[19] The Department is now paying for 52 systems at an average of around £20 million per system across acute trusts, mental health trusts and community health services in London.[20]

6. In the South, the Department had to change its approach to delivering systems following the termination of its contract with Fujitsu in 2008.[21] The replacement supplier, BT, is now delivering 35 systems for £454 million, yet the Department expects to be able to deliver systems which meet the needs of up to 55 further NHS organisations for just £470 million.[22] This equates to a requirement to deliver 57% more systems for only 3.5% extra cost.[23]

7. We noted that the Department is paying BT an average of £9 million for each community and mental health system it is delivering in the South.[24] This compares to an average price of between £1 million and £2 million for systems purchased directly from the supplier, CSE Healthcare, outside the Programme.[25] For example, Bradford District Care Trust had purchased the same system and services directly from CSE Healthcare for £1.3 million over five years.[26] The Department stated that its contract with BT includes provision of additional items which account for this price difference and that a different level of service was provided to Bradford District Care Trust.[27] Subsequently, CSE Healthcare disputed this evidence from the Department as it maintains that it provides a similar level of service to the Trust.[28]

8. The National Audit Office report stated that the average cost of three new acute systems in the South was 47% more expensive than in London.[29] The Department challenged this figure at our hearing and has since provided written evidence which suggests that these sites are in fact 24% less expensive than the London sites.[30] The new figures provided by the Department also indicate that the cost of delivering an acute system in London has not increased from £16 million to £19 million, as reported by the NAO on the basis of figures contained within departmental papers, but rather has nearly doubled to £31 million.[31] The increase in the cost of an acute system from £16 million to £19 million was not disputed by the Department during the preparation of the NAO report or at our hearing.[32] It was also not until after our hearing that the £31 million cost of an acute system in London was revealed by the Department, despite the NAO repeatedly requesting clarification about the pricing of the London contract during its examination of the Programme.[33]

9. During the preparation of its report the NAO identified that the Department lacked basic management information on the number of systems delivered and the amount spent on each system, as well as the cost implications of changes to the contracts for the delivery of systems.[34] The information the Department did have was provided to the NAO late, contained inconsistencies, contradicted material it had previously provided, and was at odds with information provided by the Department's own suppliers.[35] This occurred despite the fact that Connecting for Health, the NHS organisation responsible for managing the Programme nationally, has 1,300 staff and has spent £820 million on central programme management.[36]

10. Sir David Nicholson has been the Senior Responsible Owner for the Programme since 2006-07.[37] However, his significant other responsibilities as Chief Executive of the NHS, especially at a time when fundamental health reforms are under way, have meant that he has lacked the capacity to meet his responsibilities fully as SRO on this project. This has resulted in poor accountability for project performance - in particular the Programme's increasing costs and delays.

11. In response to the Committee's previous report on the Programme published in January 2009,[38] the Department committed to producing a statement of benefits to March 2010 by the summer of that year. The statement was also to be subject to audit by the Comptroller and Auditor General. However, it was not until May 2011 that the Department handed a statement of benefits to the NAO for audit, by which time the statement was more than a year out of date.[39]

3   Qq 109-11 Back

4   Qq 54, 125 Back

5   Qq 105, 119-120 Back

6   Qq 105, 132, 138-139, 205 Back

7   Qq 140-141 Back

8   Qq 289, 290, 314 Back

9   Qq 119, 205 Back

10   Qq 129-130 Back

11   Qq 25-28, 52, 56, 282, 284 Back

12   Qq 28, 31, 49-50, 309 Back

13   Qq 55-56, 59 Back

14   Qq 12-13, 21 Back

15   Ev 46 Back

16   Qq 16-22, 231 Back

17   Qq 227-230 Back

18   Qq 45-48 Back

19   Qq 63, 205-206, 291 Back

20   Qq 61-64 Back

21   Qq 66, 234, 311 Back

22   Q 254 Back

23   Qq 202-203 Back

24   Qq 84-86 Back

25   Q 91 Back

26   Q 237 Back

27   Qq 239-241 Back

28   Ev 29 Back

29   Qq 66, 196 Back

30   Qq 201, 203, 245; Ev 46 Back

31   Ev 46 Back

32   Q 288 Back

33   Q 200 Back

34   Qq 75, 197-201, 225-226 Back

35   Q 76 Back

36   Qq 75, 187 Back

37   Q 114 Back

38   Committee of Public Accounts, Second Report of Session 2008-09, The National Programme for IT in the NHS: Progress since 2006, HC 153 Back

39   Qq 159-164 Back

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© Parliamentary copyright 2011
Prepared 3 August 2011