NAO has 'no confidence' in value of future health IT spending

18 May 2011

18 May 2011 | Lindsay Clark

Spending £2.7 billion on the NHS National Programme for IT (NPfIT) so far has not provided value for money, a report from the National Audit Office (NAO) said today.

The spending watchdog also voiced concerns the £4.3 billion still to be spent on the care records contracts would not succeed where earlier spending failed.

“It is deeply worrying to hear that the NAO ‘has no grounds for confidence’ that the remaining planned spending on care records systems will provide value for money,” said Margaret Hodge, the MP who chairs the Committee of Public Accounts (PAC). “We will want to question officials on whether the programme should be stopped, even at this late stage.”

The NPfIT was expected to cost around £11.4 billion, including NHS costs of implementation. Launched in 2002, NHS Connecting for Health signed around £6 billion of contracts with suppliers in late 2003 and early 2004. However, the project had been beset by delays and is currently five years behind in delivering integrated electronic health records it had promised by 2010. Vendors are only paid when their work has been completed.

Last week Prime Minister DavidCameron said deals would not be renewed until both the PAC and Cabinet Office’s Major Projects Authority had completed value-for-money reviews.

The NAO said because of changes to the programme, which has seen the departure of main contractors Accenture and Fujitsu, a number of procurement challenges remain.

The extra costs of the additional procurement in the South of England following the termination of Fujitsu’s contract will not be certain until the process is completed in November 2011. “The level of funding available for systems at each trust is significantly lower than that which is available under existing contracts,” the report said.

The NAO also questioned whether contracts were being well managed. It said although fewer systems are now being delivered in London, there has not been a significant reduction in the total value of the contract with BT.

In response, a Department ofHealth(DH) spokesperson said: "This report from the NAO highlights major concerns with the pace and scale of delivery of information systems under the National Programme for IT. We agree change is needed and that the original vision was flawed. This is why last year we announced a move away from a centralised, national approach to IT to localised responsibility and decision-making. However, we do think the investment made so far in the NPfIT will potentially deliver value for money now that we have a more flexible approach that allows the local NHS to be in charge of its own requirements."

The DH will be respond more fully to the NAO’s report at the PAC hearing on 23 May.

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