Written evidence from The Consultancy
THE FUTURE OF THE CONTRACT WITH CSC
All indicators suggest that CSC as owners of iSoft
will not continue to develop Lorenzo. In which case, assuming
a new MoU is signed with CSC as suggested, we believe the situation
would be as follows:
130+ [CSC response to Q13] interim solutions delivered
would de facto become permanent. Those mental health and acute
trusts with the iSoft iPM system can, in time, be expected to
enter a long term arrangement with CSC for an on-going service:
similarly those community care organisations with the TPP system.
would be well positioned to provide iSoft clinical application
add-ons to any trust already with iPM. These add-ons sit naturally
on an iPM foundation.
those trusts which have not received interim solutions, the focus,
apparently, will be to offer a choice of systems delivering "flexible
(clinical) modules that would sit on a base care records platform".
It is unclear what this choice will be or how, as owner of iSoft,
CSC's conflict of interest in providing choice will be resolved.
In these circumstances, it seems clear that non-Lorenzo
iSoft products, whether legacy systems or later developments,
would proliferate, verging perhaps on a monopoly position for
CSC as owner of iSoft. This surely cannot be in the best interest
of the NHS. Had Lorenzo been successfully developed in line with
CSC's original contract of 2003 it would be a different matter.
But as it is there is no reason in terms of functionality to prefer
iSoft systems to those of any other supplier. Furthermore, DoH
would be at risk of being challenged in the courts by other suppliers
complaining that EC procurement rules have been broken in de-scoping
the original contract without re-tendering.
1. It is not in the best interest of the NHS
to retain CSC as LSP for the North, Midlands and East. The contract
with CSC should be terminated. (This is based purely on the
arguments developed above and takes no account of the Committee's
concerns about value for money in the proposed amended contract
2. With current cost cutting and performance
improvement pressures on all the public sector, never have the
benefits that NPfIT was supposed to bring been so desperately
needed. Having terminated the contract with LSP, the Department
should, by some mechanism to be determined, make over to hospital
trusts the residue of the available national funding so that trusts
can procure appropriate systems for themselves.
Long term role for Interim Systems/Implication
that Lorenzo is to be dropped
Transcript of PAC Meeting of 23 May 2011
Q5: Mr Bacon: So, once
you have iSoftassuming all the regulatory hurdles are cleared
and you get it, as it were, under your beltyou will have
this large portfolio of old, profitable legacy systems where all
the development work is already done. Why on earth would you
continue pouring good money after bad, trying to make Lorenzo
The acquisition of iSoft is a strategic decision of CSC to expand
our global healthcare sector business.
Ms Thureen was given the opportunity to refute the
suggestion that Lorenzo is to be dropped. She failed to take it.
Taken with the reports immediately below, the inevitable conclusion
is that CSC intends to focus on non-Lorenzo iSoft systems. This
surely makes commercial sense. iSoft systems proliferate throughout
the NHS (some supposed to be replaced by Lorenzo, others not).
Then, additionally, there are the 80 or so iPM (patient administration)
systems that NPfIT has allowed as interim solutions, with the
strong suggestion that if trusts so wish these can be retained
as permanent solutions. What responsible trust would want to replace
the low risk, well proven iPM with the high risk Lorenzo? A rhetorical
question, especially as Lorenzo development has stopped short
of clinical applications and so offers no path to the future.
So, why indeed would CSC as owner of iSoft want to pour good money
after bad when it already has a solid, low risk income stream
from legacy systems: a profit stream made even more profitable
by the actions of NPfIT?
As reported in E-Health Insider of 24 May 2011 "Outline
of new CSC deal takes shape"
Connelly gave a heavy hint that a new CSC deal is
likely to recast the role of "interim" systems to give
them a long-term role; a path that has already been followed with
CSC's installations of SystmOne from TPP. Potentially this could see
many of the 87 iSoft iPM systems for which CSC has already been
paid being used as a basis for future development, possibly with
future slices of Lorenzo. "We've certainly said that where
we have a system that supports care, such as iPM, and the trust
wants to keep it, we will not be forcing them to rip and replace.
CSC has already been paid for implementing iPM. If they are willing
to support it for longer then we would want to keep it."
As reported in E-Health Insider of 26 May 2011 "Memo
reveals latest CSC offer"
A leaked memo from a Cabinet Office
confirms that the DH is looking to sign a new memorandum of understanding
with CSC, and that this would result in fewer trusts being contracted
to use the system, in return for a further reduction in contract
.. The memo says that in February, CSC offered a
deal in which the number of trusts offered a CSC system would
be cut from 220 to 80, and that they would be offered a choice
of system, not just the iSoft Lorenzo software that CSC was contracted
to deliver by the National Programme for IT in the NHS.
Interviewed by EHI, NHS chief information officer Christine Connelly
said that the new focus would be on delivering flexible [clinical]
.. that would sit on a base care records platform
CSC ENTITLEMENT TO
Having no knowledge of the contract we can offer
no opinion on this matter. We do, however, suggest that potential
value of "interim" iPM contracts made permanent is considerable
and that any such income would offset any claim for damages.
NHS trusts which have been provided with iPM through
NPfIT are unlikely to prefer the upheaval of moving to new systems
if presented with the opportunity to retain iPM as a permanent
solution. This will generate considerable income for CSC. Based
on a recent business case for PAS replacement undertaken by The
Consultancy Partnership the typical annual charge from the supplier
is circa £400,000. Assuming 80 interim iPM systems made permanent
and typically 10 year contracts, this would generate some £300
million for CSC. Conservatively, this could double to £600
million allowing for clinical applications to be subsequently
added. And this just covers the acute sector. TPP interim arrangements
made permanent will generate further revenue for CSC. It may not
be fanciful to suggest total income over 10 years at £1,000
million. Clearly, further consideration is required.
Whilst this is a matter for lawyers, it has been
suggested that other suppliers might already have grounds for
complaint that EC procurement rules have been broken given that
CSC has been allowed within NPfIT to implement as interim solutions
systems that were rejected in the original procurement as being
unfit for NPfIT. [NAO Report Executive Summary para 18 "CSC
has also delivered 81 interim systems to trusts whose systems
needed to be replaced urgently. These systems were not previously
considered by the Department to meet the aims of the Programme
and under the terms of the current contract will need to be replaced.]
How much greater might that complaint be if these interim systems
are established as permanent and CSC is allowed to build them
into long term income streams?
Alan Shackman has over 20 years experience as an
independent consultant to the public sector, principally to the
NHS, specialising in the business/user focused elements of preparing
for and implementing IT systems. He is an expert in the usage
of IT at grass roots level in the NHS, having undertaken assignments
across all sectors - acute, mental health, community and primary.
Over the past 15 years his work has focused on electronic patient
record systems. In that time he has prepared business cases and
detailed definition of requirements, led procurements at major
acute trusts and across local health communities, and facilitated
the management of change.
Alan is familiar with the products being offered
by the two suppliers of core CRS software to NPfIT having worked
on PAS replacement projects in both the South and North West &
West Midland clusters. During 2004 and 2005 he acted as NPfIT
programme facilitator for the north east sector of Greater Manchester.
At national level, Alan led the development of a
national output based specification for electronic patient record
for acute trusts as part of the NHS IM&T Procurement Review
of 1999. Earlier in the 1990s he was a member of the NHS Information
Management Group's panel of consultants advising trust boards
on electronic patient records. He was also a member of the team
that reviewed the national resource management programme
Most recently during 2010-11 he has been assisting
two acute trusts in the East of England prepare for the open procurement
of a replacement patient administration system and integration
Alan is a Chartered Engineer and Member of the Institution
of Engineering & Technology. In an earlier phase of his career
he was a member of the UK Industrial Space Committee and represented
the UK on international telecommunications standards and regulatory
2 June 2011