£40m NPfIT legal bills revealed

Almost £40m has been paid to just two law firms for legal and commercial support for the National Programme for IT in the NHS, a parliamentary written answer has revealed.

The figure was given in response to a question from Conservative health spokesman Stephen O’Brien, who asked exactly how much had been paid to each legal firm employed to draft the contracts for the NPfIT.

Health minister Mike O’Brien responded: “Between 1 April 2002 and 31 March 2009, the total fee paid to Allen & Overy amounted to £10,309,877 and to DLA Piper UK LLP £28,864,938, although Allen and Overly ceased to advise after 2006.”

Mike O’Brien said information is not held in a form making it possible to identify payments made for work relating specifically to drafting contracts.

However, he said: “As part of the total sum for legal and commercial support relating to the national programme for information technology, monies paid to the legal firms in question include, among a range of things, fees for drafting contracts.”

According to NHS Connecting for Health, figures for the months after March 2009 are also unavailable.

In 2006, E-Health Insider reported that CfH had already received a £28.2m bill for legal work, one of the biggest ever bills for legal work in the public sector. EHI also reported that the Department of Health had originally budgeted £40m for legal fees.

The Conservative Party was unable to say why Stephen O’Brien had specifically been asking about the cost of drafting the programme’s contracts.

However, its two remaining local service providers, CSC and BT, are in negotiations with CfH about whether they met the November 2009 deadline for making “significant progress” in deploying electronic patient record systems to acute trusts.

Negotiations are also ongoing about where cuts to the programme may be made in response to December’s Pre-Budget Report.

The Conservative Party has also said that if it is elected it will “halt and renegotiate” the LSP contracts, which could potentially incur further legal charges.

Yesterday, shadow chancellor George Osborne told the London School of Economics that an incoming Conservative government would look to make savings quickly.

He said that public sector projects that were judged to “represent poor value for money” would “have to be cut during the financial year” although he did not specify exactly what projects would be axed, and made no reference to IT.

Link: 14th January 2010 Written answers and statements