No National Programme Funding for Local Projects

The director of finance for the National Programme for IT (NPfIT) has confirmed that local NHS organisations will receive no additional funding for local IM&T initiatives from national programme funds beyond this current financial year.

In a letter seen by E-Health Insider NPfIT finance director, Malcolm Harris CBE, states that in 2004-2005 and 2005-2006 all national programme investment funds will be allocated to funding national projects only. The announcement comes at a time when there are growing concerns that £2.3 billion may not prove sufficient to fund the core components of the national programme.

Without national funding available, the local ongoing revenue costs of new systems, together with much of the local training and implementation required will have to be found by local NHS organisations, either from existing baseline IT spend or found from other areas of expenditure.

Over the past few weeks at least eight strategic health authorities have received details of their local IM&T allocations from national programme funds this year. In some instances these allocations, part of the extra £400m of central funding for the national programme available this year, have been lower than expected, with funds clawed back by the national programme to finance central projects.

The clarification of the position on local IM&T allocations is provided in a letter from Mr Harris to all strategic health authority (SHA) chief information officers. It states: “There will be no allocations in 2004-2005 and 2005-2006 from NPfIT to support local initiatives. There will of course be substantial support for local NHS IT services through national contracts.”

While the NPfIT has consistently stated that the majority of the £2.3 billion investment over the next three years will fund national projects: infrastructure, integrated electronic records, e-booking and electronic transfer of prescriptions, but many NHS organisations had still expected to receive national funds to support local IT developments.

The letter from the NPfIT finance director states: “The particular circumstances of 2003-2004 allowed us to make allocations for local initiatives which had strategic conformance with the National Programme This is not the case for forward years we where expect to need the total NPfIT funding envelope for implementing the national programme.”

It explains that successful implementation of the national programme, the purpose for which resources have been allocated, cannot be put in jeopardy by allowing funds to be diverted to other uses “no matter how worthwhile they might be.”

One trust IT director told E-Health Insider, “The picture we are getting is that there may be money for implementing things but not for ongoing revenue costs or costs such as training, which will have to be found locally.”

Another senior NHS IT director commented: “I think there has been a realisation that the national programme has tried to shift as much of the implementation work as possible out to local NHS organisations.” The problem with this shift, he warned, is that spending more local money on IT “has not been built into local spending plans.”

He added that, personally, he remained in the dark about what would happen after LSP contracts are awarded: “What will be paid for centrally and what will have to be paid for locally? What will be delivered when and at what cost?”

E-Health Insider also understands that disquiet has been expressed by some SHA chief executives about the perceived lack clarity on key aspects of the NPfIT, including what local investment will be required to implement systems and connect to national services.

A different view, however, was expressed by the chief executive of one London hospital Trust, who told E-Health Insider that reading between the lines he had never expected national programme funds to be made available to support local projects.

Mr Harris’s letter tacitly acknowledges that there has been confusion over future local funding allocations: “I know the lack of funding for local initiatives will be a disappointment to those who had expectations of further funding. [We apologise if there was any lack of clarity about the position.].”

The NPFIT finance director concludes: “I hope this letter will at least enable you to develop your local plans on a clearer basis.”

Trust IT directors are currently being required by the national programme, through SHA CIOs, to prepare seven-year summary planning documents by September. But as one director told E-Health Insider: “How can we do this when we don’t know who suppliers will be, what the products will be and how much they will cost?”

He added: “We are being pushed to produce implementation strategies for ICRS without the financial management information we need, and we will have to find the money locally for implementation and revenue costs.” Without such basic financial information he predicted it would be virtually impossible to get any proposal for spending more on IT approved by his trust board.

E-Health Insider would like to hear from NHS readers on how they are planning for implemention, and the likely financial implications for their organisation. Email (in confidence) jon@e-health-media.com