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.
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.
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.
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.
The Department reported, however, that the Programme had passed
a number of risk assessments and that Ministers were aware of
the risks. 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.
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.
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.
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.
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.
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.
4. The delays in developing and delivering Lorenzo
have meant that around 80 interim systems have been delivered
in its place.
The Department reported that by March 2011 it had paid CSC
£105 million for these systems.
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.
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.
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.
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.
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.
6. In the South, the Department had to change its
approach to delivering systems following the termination of its
contract with Fujitsu in 2008.
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.
This equates to a requirement to deliver 57% more systems
for only 3.5% extra cost.
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.
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.
For example, Bradford District Care Trust had purchased
the same system and services directly from CSE Healthcare for
£1.3 million over five years.
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.
Subsequently, CSE Healthcare disputed this evidence from the Department
as it maintains that it provides a similar level of service to
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.
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.
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.
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.
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.
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.
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.
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
10. Sir David Nicholson has been the Senior Responsible
Owner for the Programme since 2006-07.
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,
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.
3 Qq 109-11 Back
Qq 54, 125 Back
Qq 105, 119-120 Back
Qq 105, 132, 138-139, 205 Back
Qq 140-141 Back
Qq 289, 290, 314 Back
Qq 119, 205 Back
Qq 129-130 Back
Qq 25-28, 52, 56, 282, 284 Back
Qq 28, 31, 49-50, 309 Back
Qq 55-56, 59 Back
Qq 12-13, 21 Back
Ev 46 Back
Qq 16-22, 231 Back
Qq 227-230 Back
Qq 45-48 Back
Qq 63, 205-206, 291 Back
Qq 61-64 Back
Qq 66, 234, 311 Back
Q 254 Back
Qq 202-203 Back
Qq 84-86 Back
Q 91 Back
Q 237 Back
Qq 239-241 Back
Ev 29 Back
Qq 66, 196 Back
Qq 201, 203, 245; Ev 46 Back
Ev 46 Back
Q 288 Back
Q 200 Back
Qq 75, 197-201, 225-226 Back
Q 76 Back
Qq 75, 187 Back
Q 114 Back
Committee of Public Accounts, Second Report of Session 2008-09,
The National Programme for IT in the NHS: Progress since 2006,
HC 153 Back
Qq 159-164 Back