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

Written evidence from XML Solutions

I am from a small company which specialises in advising on large scale and government Healthcare ICT projects. I worked on the National Programme for IT for seven years working for the final two years as the Chief Architect on the NHS Spine. I learnt a tremendous amount about the challenges—technical and commercial—of modern Healthcare IT and large government projects. Further to speaking with a clerk of the committee, Phillip Aylett, I have agreed to make a short note on a few of the challenges that were faced by the National Programme which have perhaps not been so widely understood in the investigations to date. There are many subtle problems which helped escalate the costs of the NHS National Programme for IT. Some have been addressed in the NAO report. Many other factors are perhaps only evident to those on the "front line" of delivery and in what follows I attempt to explain just a couple of these. I hope it will be of interest to the committee.

The first of the phenomena I want to discuss goes some way to explaining the spiralling costs and inefficiencies of many large government projects. The government has already recognised that there are inefficiencies in these projects and sensibly proposes to cap the size of projects in future. However, this note elaborates one of the many subtle reasons why costs spiral.

Every large programme inevitably has to allow for elements of change. Whenever a new deliverable is negotiated, the government reasonably wants to limit the potential profit a private organisation can make on that change. In order to do this they specify a fixed profit margin (somewhere between five and fifteen percent depending on the type of change) on each change. Although on the face of it this approach seems sensible it actually encourages inefficiency in the system. When the government requests a change the supplier must estimate the cost of the change. To do this they will in turn talk to their sub-contractors. However, because there is a fixed percentage that the supplier can make there is no incentive for them to encourage their sub-contractors to make the additions in the most efficient way possibly. In fact, perversely there is a subconscious incentive for the main supplier to encourage its subcontractors to be expensive because 15% of five million is obviously a lot more profit than 15% of one million. I should emphasise that in no cases do suppliers consciously overestimate the cost of change. However, I have observed on many occasions the collective unconscious of an organisation going through this process and then watched the additional waste of effort as the department of Health (or CFH) spend weeks arguing about the estimate.

In summary, the committee should consider finding commercial structures which reasonably limit the profit a major supplier can make but which none the less still encourage creativity and efficiency in the supplier. If the committee are able to recommend commercial relationships that resolve this issue they will be providing a great service to future government projects, even those of the relatively smaller £100 million scale.

The original requirements of the NHS National Programme for IT included substantial services on the Spine which were to be used by the LSPs. However, one area of hidden losses to NHS patients is the lack of functionality that has been taken-up from the Spine. It is worth remembering that the National Programme was essentially an integration activity that relied on all parts of that system working together. For example, the PSIS (the store of the Summary Care Record) has been designed and built to support much more than the basic records that are being used today. Similarly, the Access Control Service, originally envisaged as a nationally utilised system, is now likely to be extremely underutilised. As such, many hidden losses result not from non-delivery of LSP components but from the lack of utilisation of already delivered Spine components. This is not necessarily to assume that all these services should now be fully utilised, but the fact there they have been paid for without their full value being gained by the NHS should be recorded.[1] In summary, the committee should consider quantifying these losses in terms of the lack of adoption of Spine services and the general reduced level of integration between systems.

I hope these notes have been of some use and wish to offer the committee my sincerest wishes that they are able to assess and provide useful recommendations for the future of these services.

28 June 2011

1   I note that the NAO report appears to mark Spine Services as "fully utilised". Whilst I would not want to contradict this more measured report, that assumption does not accord precisely with my understanding. Back

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Prepared 3 August 2011