PAC doubts DH can deliver paperless NHS

The Department of Health has come in for stinging criticism for the way it handled National Programme for IT contracts from Parliament’s spending watchdog, which doubts its ability to deliver a ‘paperless’ NHS by 2018.

In a report published this morning on the hearings that it held into the ‘dismantled NPfIT’ in June, the Commons’ public accounts committee says the DH’s poor performance means the total cost of NPfIT is likely to be more than the £10 billion the department has estimated.

It points out that this figure – first revealed by EHI in August – does not include the further costs of Lorenzo in the North, Midlands and East, or the significant legal costs it has run up dealing with local service providers CSC and Fujitsu.

The committee reserves its most withering criticism for the situation in the NME. It says CSC’s performance on delivering the Lorenzo EPR to the region has been “poor.”

Yet it says the DH’s negotiating position with the company has been “weak” because “it could not meet its own contractual obligation to make available 160 trusts… to take the new system" – opening itself up to potential legal action from the company.

The result has been tortuous negotiations, which have yet to be completed, but which have cost the DH £2.9m to date.

The department does have a legally binding, interim agreement in place with the company.

This removed CSC’s monopoly on supplying systems to the NME, but gave it £100m in compensation and promised central financial support for up to 22 trusts that may still want to take Lorenzo.

As a result, CSC will be paid around £2.2 billion in total, with £572m earmarked for future spending on Lorenzo; a situation the PAC summarises as “the public purse continuing to pay for failures by the department and its contractors.”

At the moment, Lorenzo is in extensive use in just two trusts – University Hospitals of Morecambe Bay NHS Foundation Trust and Humber NHS Foundation Trust.

As reported by EHI in its ‘NAO files’ series of stories, the DH estimates that £9.8 billion will eventually be spent on NPfIT.

However, the PAC says this not only excludes the future costs of Lorenzo, but the cost of settling the dispute with Fujitsu, which exited the Southern Programme for IT in May 2008.

The committee’s report notes that more than four years later, “arbitration is still on-going” and the costs are “significant” – amounting to £31.5m so far.

It says the DH “must manage the re-set contract with CSC robustly” and that it should “report the additional costs of the national programme, including legal costs, as soon as possible.”

The national programme was set up in 2002. It split the country into five clusters and appointed a local service provider for each. The LSPs were supposed to contract with software companies and deliver ‘strategic’ EPRs to trusts.

However, just two LSPs – BT in London and parts of the South and CSC in the NME – still remain, and EPR deployments have fallen far short of what was planned.

The PAC’s report says that the benefits gained from what has been delivered are also “extremely disappointing.”

As EHI has been spelling out in the ‘NAO files’, which are based on the DH’s cost and benefit calculations as released to the National Audit Office, “two thirds of the £10.7 billion of total forecast benefits are still to be realised.”

Most of these benefits have come from national infrastructure and national programmes, such as Choose and Book, which were also part of NPfIT. The PAC says that “nearly all (98%) of the estimated benefits [of the care record programmes] were future benefits.

It recommends that the DH should now “set out how it will support local trusts to secure benefits” in the future – and tell MPs how it is getting on.

The last, Labour government started a shift away from the programme’s original set-up by creating local ownership programmes, telling trusts to implement systems that would secure ‘clinical five’ functionality, and investing in information sharing programmes.

The present government scrapped the programme in September 2010 and effectively did so again a year later, when it said its dismantling would be accelerated.

The PAC describes the whole debacle as a “sorry history” and says it doubts that the DH will now be able to deliver on health secretary Jeremy Hunt’s vision of a ‘paperless’ NHS by 2018, given its NPfIT performance.

“There were 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,” it concludes of the programme.

“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.”