Rising cost of NHS IT 'fiasco'
The costs of a multibillion-pound health service national IT programme abandoned by the Government are set to continue rising significantly, MPs warned as they branded it one of the "worst and most expensive contracting fiascos" in the history of the public sector.
Ministers shelved the ambitious scheme, designed to create electronic patient records for use across the NHS in England, two years ago but there are still outstanding costs and some elements of the project have continued in different parts of the country.
Government put the bill for the failed National Programme at £6.4 billion when it announced it was being dismantled and officials later estimated the total would reach £9.8 billion. But the Commons Public Accounts Committee (PAC) said the full costs of the scheme are still not certain as the latest forecast does not include the bill for terminating Fujitsu's contract for care records systems in the south of England or other future costs.
Taxpayers are continuing to pay the price for the failures of the Department of Health and its contractors, MPs said. They highlighted the Government's decision to renegotiate its original contracts, worth £3.1 billion, with company CSC for care records systems across 220 trusts in the North, Midlands and East, following delays and problems.
But despite CSC's "poor performance", officials have been left in a weak negotiating position because they have failed to meet their own contractual obligations to provide 160 trusts to take on a new system and it is likely to be left with a contract costing £2.2 billion.
PAC member Richard Bacon said: "The taxpayer is continuing to pay the price for the ill-fated National Programme for IT in the NHS. Although officially 'dismantled', the National Programme continues in the form of separate component programmes which are still racking up big costs.
"The original contracts with CSC totalled £3.1 billion for the setting up of the Lorenzo care records system in trusts in the North, Midlands and East. Despite the contractor's weak performance, the Department of Health is itself in a weak position in its attempts to renegotiate the contracts. It couldn't meet the contractual obligation to make enough trusts available to take the system.
"The department is now assuming that just 22 trusts will take the Lorenzo system. We still don't know what the full cost of the National Programme will be. The department's latest estimate of £9.8 billion leaves out the future costs of Lorenzo or the potential large future costs arising from the department's termination of Fujitsu's contract for care records systems in the South of England.
"Parliament needs to be kept informed not only of what additional costs are being incurred, but also of exactly what has been delivered so far for the billions of pounds spent on the National Programme. The benefits flowing from the National Programme to date are extremely disappointing. The department estimates £3.7 billion of benefits to March 2012, just half of the costs incurred. This saga is one of the worst and most expensive contracting fiascos in the history of the public sector."
Health Minister Dan Poulter said: "Labour squandered billions on their failed NHS IT programme. It is deeply frustrating that they also tied current ministers' and taxpayers' hands with ongoing liabilities from their wasteful contracts. But we can't let their failure hold patients back from seeing the benefits of the technology revolution that is transforming daily lives all around us. That's why we've set up a £1 billion technology fund to help the NHS go paperless by 2018."