National Programme for IT is likely to cost more than £9.8 billion
The House of Common’s Public Accounts Committee (PAC) has revealed that the failed National Programme for IT (NPfIT) project is likely to cost taxpayers more than £9.8 billion, calling it one of the worst contracting fiascoes in public sector history.
In a report published on Wednesday, the PAC said that even though the programme, once hailed as the biggest public sector IT project in the world, was officially “dismantled” in 2011, it kept wasting public money.
The Committee also said it was skeptical the Department of Health could deliver its vision of a paperless NHS by 2018.
Since the NPfIT project started in 2002, it provided just £3.7 billion of benefits. “It should be plain to anyone that we are witnessing systemic failure in the government’s ability to contract,” said Richard Bacon MP, a member of PAC.
Lorenzo refuses to die
NPfIT was devised in 2002 to revolutionise the way NHS uses IT in its day-to-day operations. It was originally estimated to cost £2.4 billion, but a decade later, and with little to demonstrate significant progress, the costs had skyrocketed to £12.7 billion.
By August 2011 Computer Sciences Corporation (CSC), one of the key partners selected to deliver the Programme, had implemented just 10 out of 220 Lorenzo electronic patients’ records systems planned for the country’s HNS trusts. Later, the National Audit Office concluded that NPfIT was unlikely to be finished by the end of the contract term in 2016.
Following September, the government announced that the over-expensive scheme would be “urgently dismantled”, and local health trusts would be given the powers to choose their own IT systems. However, to avoid a full-blown lawsuit from CSC or paying expensive termination fees, it was decided that already implemented parts of NPfIT would remain in operation. CSC was also allowed to continue offering its services to individual trusts.
According to PAC, the number of NHS trusts that decided to implement Lorenzo currently stands at 22.
“Although officially ‘dismantled’, the National Programme continues in the form of separate component programmes which are still racking up big costs,” said Bacon.
“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.
“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.”
Following the termination of Fujitsu’s contract in 2008, the company sued the Department of Health for £700 million. So far, the lawsuit has cost the government £31.5 million.
In conclusion, PAC wrote that in order to deliver a paperless HNS, the Department of Health needed to draw on the lessons from the NPfIT and develop a plan that included estimates of costs, benefits, and a realistic timetable.
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