Conclusions and recommendations
1. Launched in 2002,
the National Programme was designed to reform the way that the
NHS in England uses information. While some parts of the National
Programme were delivered successfully, other important elements
encountered significant difficulties. In particular, there were
delays in developing and deploying the detailed care records systems.
Following three reports on the National Programme by both the
National Audit Office and this Committee, and a review by the
Major Projects Authority, the Government announced in September
2011 that it would dismantle the National Programme but keep the
component parts in place with separate management and accountability
structures. That process has now taken place. In June 2013, the
Department published a statement on the benefits to date and in
future from the programmes that made up the National Programme.
2. The public purse is continuing to pay the
price for failures by the Department and its contractors. The
Department's original contracts with CSC totalled £3.1 billion
for the delivery of care records systems to 220 trusts in the
North, Midlands and East. In 2011, the Department decided to renegotiate
the contracts with CSC due to delays in developing and deploying
the Lorenzo system. However, despite CSC's poor performance, the
Department's negotiating position is weak because it could not
meet its own contractual obligation to make available 160 trusts
in the North and Midlands to take the new system. Despite two
years of negotiations the full re-setting of the contract is yet
to be agreed with CSC, but the Department estimates that the contract
is still likely to cost about £2.2 billion, including £572
million for the Lorenzo care records system, assuming just 22
trusts take the system. This cost should have been less had the
Department not undermined its negotiating position by being unable
to honour its side of the deal.
Recommendation: The Department must manage
the re-set contract with CSC robustly, so that its negotiating
position is protected for the future.
3. The full cost of the National Programme
is still not certain. The Department's
most recent statement reported a total forecast cost of £9.8
billion. However, this figure did not include the future costs
associated with the Department's contract with CSC for the Lorenzo
care records system or the potential future costs arising from
the Department terminating Fujitsu's contract for care records
systems in the South of England, where arbitration is still on-going.
These costs are likely to be significant. For example, the Department's
legal costs in relation to the termination of Fujitsu's contract
have totalled £31.5 million over the last four years.
Recommendation: Given the scale of the sums
involved, the Department should report to Parliament details of
all the additional costs of the National Programme, including
legal costs, as soon as they are known.
4. The benefits to date from the National
Programme are extremely disappointing.
The Department's benefits statement reported estimated benefits
to March 2012 of £3.7 billion, just half of the costs incurred
to this point. The benefits include financial savings, efficiency
gains and wider benefits to society (for example, where patients
spend less time chasing referrals). However, two-thirds of the
£10.7 billion of total forecast benefits were still to be
realised in March 2012. For three programmes, including the care
records programmes in London and the South, nearly all (98%) of
the total estimated benefits were future benefits. The Department
acknowledged that insufficient attention has been paid to securing
benefits. The risk of benefits not being realised has increased
with the transfer of responsibility for benefit realisation to
NHS trusts and NHS foundation trusts from April 2013.
Recommendation: The Department should set
out how it will support local trusts to secure benefits, and should
track and report benefits achieved in the coming period.
5. It is important that Parliament is updated
about what has been delivered for the billions of pounds that
have been invested in the National Programme.
The systems deployed through the National Programme will continue
to be used for years to come. The end-of-life dates for the various
systems extend well into the future, to 2024 in the case of the
care records programme in the North, Midlands and East. We welcome
the Department's assurance that it intends to continue to monitor
the costs and benefits of all the programmes that were formerly
part of the National Programme.
Recommendation: The Department should provide
the Committee with an annual update of the costs and benefits
of the programmes previously managed under the National Programme.
6. After the sorry history of the National
Programme, we are sceptical that the Department can deliver its
vision of a paperless NHS by 2018. We
have reported previously on the shortcomings of the National Programme,
which included poor negotiating capability, resulting in deals
which were poor value for money and weak programme management
and oversight. There were also failures to understand the complexity
of the tasks, to recognise the difficulties of persuading NHS
trusts to take new systems that had been procured nationally,
and to get people to operate the systems effectively even when
they were adopted. Making the NHS paperless will involve further
significant investment in IT and business transformation. However,
the Department has not even set aside a specific budget for this
purpose. As with the National Programme, it will be important
to balance the need for standardisation across the NHS with the
desire for local ownership and flexibility. The first 'milestone'
towards the ambition of a paperless NHS is for GP referrals to
be paperless by 2015.
Recommendation: If the Department is to
deliver a paperless NHS, it needs to draw on the lessons from
the National Programme and develop a clear plan, including estimates
of costs and benefits and a realistic timetable.
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