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NHS IT upgrade ‘most expensive contracting fiasco’ ever

Public Accounts Committee slams costly failure

Jo Carlowe

Wednesday, 18 September 2013

The attempted upgrade of the NHS IT system is one of the ‘worst and most expensive contracting fiascos’ in public sector history.

This is the conclusion of the Public Accounts Committee (PAC) in its report published today: The dismantled National Programme for IT in the NHS.

The National Programme was launched in 2002 but stumbled early with delays in the development and rolling-out of the detailed care records systems. In September 2011 the Government announced it would dismantle the National Programme.

Just how much the failure cost is still being determined - original estimates were set at £6.4billion but this was later revised to £9.8billion. But the PAC said this estimate failed to include a number of future costs including the price of terminating a contract with Fujitsu to provide care records systems in the South of England. Arbitration is on-going and the PAC pointed out that the Department’s legal costs in relation to the termination of the Fujitsu’s contract have totalled £31.5 million over the last four years.

The Committee concluded: “Given the scale of the sums involved, the Department should report to Parliament details of all the additional costs of the National Programme, including legal costs, as soon as they are known”.

The PAC Report further described the benefits to date from the National Programme as “extremely disappointing”. The Department’s benefits statement reported estimated benefits to March 2012 of £3.7 billion - just half the costs incurred to this point, with two-thirds of the £10.7 billion of total forecast benefits still to be realised in March 2012.

The Committee called on the Department to provide the Public Accounts Committee with an annual update of the costs and benefits of the programmes previously managed under the National Programme.

“After the sorry history of the National Programme, we are sceptical that the Department can deliver its vision of a paperless NHS by 2018,” concluded the Committee in its report and it called on the Department to draw on the lessons from the National Programme to develop a clear plan, including estimates of costs and benefits and a realistic timetable.

Committee member Richard Bacon described the ‘saga’ as one of the ‘worst and most expensive contracting fiascos in the history of the public sector’.

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