IT delays contribute to NHS trust deficits

Delays in implementing the National Programme for IT are listed by the influential Commons public accounts committee today as a factor leading to some NHS trusts plunging into the red.

The PAC’s inquiry into financial management in the NHS found that in 2005/06 14 trusts asked the Department of Health for money to cover “costs incurred as a result of delays in the implementation of the National Programme for IT”. None was paid.

The report does not name the trusts. It says: “The department reports that information on how much has been claimed by each trust is not available as the requests include a mixture of one-off costs, ongoing costs, alternative interim solutions and unspecified amounts.”

The information was winkled out of the Department of Health by Richard Bacon, Conservative MP for South Norfolk and a constant thorn in the DH’s side on matters relating to the national programme.

Back in October 2006 he asked David Nicholson, chief executive of the NHS, about the delays to the national programme and in particular the cost of cancelling Information for Health when the NHS Information Authority closed in 2005.

He said: “A lot of trusts have complained both about the costs incurred from the sudden decision to cut Information for Health and about delays in the national programme causing them to incur costs on things like training, and various other things, that they cannot recover from CFH or anyone else. What is your figure for how much?”

At the time Mr Nicholson said he had no evidence and no figures to support the idea that trusts were incurring costs they could not recover. He said: “I have not seen any evidence that will support what you have just said. I have heard lots of talk about it—lots of chat—but I have not seen any numbers that would lead me to believe that was occurring.”

The PAC’s report indicates that delays to NPfIT was only one among several factors contributing to the overall deficit of just over half a billion in 2005/06.

The NHS budget for 2004-05 was £69.7bn, rising to £76.4bn in 2005-06 and will be £92.6bn in 2007-08. The NHS reported an overall deficit of £251m (including foundation trusts) in 2004-05. In 2005-06, the overall deficit increased to £570m (£547m excluding foundation trusts).

The number of NHS organisations – strategic health authorities, primary care trusts, NHS trusts and NHS foundation trusts – reporting a deficit increased from 168 to 190.

Other factors included the accounting rules that financially penalise trusts already in deficit as well as unexpected cost of implementing Agenda for Change, which came in some £220m over budget, and the consultant and GP contracts.

However, it adds: “Some NHS bodies have coped better than others in managing these cost pressures, indicating that the standard of financial management expertise varies across the NHS, as does the level of clinical engagement in financial matters.”

Edward Leigh, chair of the committee, said: "NHS bodies running hefty deficits. And the cumulative deficit for all NHS trusts at the end of March 2006 had soared to over £1bn. On these measures, the prognosis for the financial health of the service is poor.”

He called for better transparency in NHS financial reporting. "Without this kind of transparency, there can be no spur to improve the standard of financial management in all NHS bodies.”

Link

http://www.publications.parliament.uk/pa/cm/cmpubacc.htm