By Graeme Wearden, 12 October 2004 11:25
NEWS The UK government admitted on Monday evening that the cost of upgrading the National Health Service's IT system would be much greater than previously forecast.
The 10-year scheme, which is the largest IT project in Britain, had been priced at just over £6bn. But the Department of Health has now said that it will actually cost between three and five times as much -- suggesting the final bill could top £30bn, according to reports.
The revelation has led to concern that money could be diverted from patient care to cover this additional cost.
The NHS National Programme for IT will create an electronic booking system for patients, followed by an electronic patient record scheme. This will allow doctors to access a patient's records from anywhere within the NHS -- be it their local surgery or a hospital.
The Department of Health was prompted into its revelation by a report in Tuesday's Computer Weekly, which claimed that the IT-led modernisation of the NHS would cost at least £18.6bn, and that local health trusts would have to carry much of the financial burden.
Health minister John Hutton said on Tuesday that the NHS would not have to carry an "unsustainable financial burden", and claimed that some of the cost estimates floating around are just speculation.
Graeme Wearden writes for ZDNet UK.
Comments
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1. John Carter
Well, well; So costs are set to soar through the roof. Perhaps the same people who costed this programm cut their teeth by first "masterminding" the Millenium Dome catastrophe, followed by "supervising" the Scottish Parliament building project. I haven't seen anywhere any costed breakdown of any part of this program - shouldn't the National Audit Office be much more proactive in investigating this costs avalanche?
2. anonymous
This amount of expenditure on IT can not be justified at a time when the NHS is crying out for staff which they cannot recruit due to the poor salary structures.
From what I have seen at my local surgery the IT only causes delay and does nothing for most patients.
The fact that the over spend is so big indicates that the management of the NHS is poor, with little or no experience of manageing contracts and the goverment ministers are equally to blame for total lack of control.
There is much discussion on the fact that the goverment cannot fund the state pension. Is it any wonder when our taxes are so mismanaged to such a disgraceful degree.
3. anonymous
Not all of this can be blamed directly on the NHS. It's more down to the suppliers and consultancy companies involved who see this as a lucrative business opportunity. Be assured if it continues it will cost far more than £30Bn
4. Terry Carlin
Is it time to call a stop to this project whilst a new cost benefit analyses is done? If the first was done at all the escalated cost would render it invalid. No commercial enterprise would fail to look at the figures a lot more closely to make sure that they were still getting value for money. Why do government contracts always seem to fail to get the basics right?
5. Neil Postlethwaite
Surely they could buy one that already works for a fraction of £30 Billion that will be spent on doing a bespoke (Made in the UK!) one. Is there not a system, in US, France, Japan, China, India etc ... that already does this...
Has anybody done even a basic Return on Investment analysis. I think £30Bn could be better spent elsewhere (UK National Space Program to Mars to find Beagle II anyone?) and leave the NHS to continue on their (by and large working) current systems.
An criminally negligent waste of public money that will top £100 Billion in 10 years time when the audit commision final report is published.
Of course, no-one will be to blame........
6. Nick Gray
If you've ever done any IT work in the NHS you'll understand what total disarray it's in at the moment.
There are 4 different patient record systems that the GP's can choose from, none of which will talk to one another, if a patient moves house, and the new GP uses a different system, the patient records need to be printed off and rekeyed. The Pathology labs at some hospitals can't even communicate with other departments within the same hospital.
Which also raises the question of why GP's are specing their IT solutions, and maintaining there own systems, they should be seeing patients, and not wondering if the back up completed last night.
IT policy within the NHS changes each time there is a change of Government. It probably takes 4-5 years for these policies to reach the grass roots of patient care, by which time the Government will have been through an election and change the policy again.
The systems that Richard Granger (Director General NHS IT) is trying to impliment will provide a solution that should have been introduced when computing entered the health care sector. Instead suppliers have got rich and lazy, sucking the cash cow dry. Those times have changed and he's negotiating hard on our behalf. He's not taking any prisoners when it comes to existing suppliers, if they don't offer value for money, then their contract is cancelled.
As for the overspend, I seriously doubt that who ever quoted the initial figure of £6bn didn't fully understand the enormaty of the problem. It might also be down to the Government saying that there is only a budget of £6bn to sort it out, they took this and now want more.
7. anonymous
Ah well! Nice to see and hear that the project costs have escalated and only 10 more years to go. Perhaps some bookmaker would like to quote odds on what the final cost will be - and maybe give some long odds that the project will ever get completed. Still shouldn't complain as I will be 69 in 10 years time and look forward to logging on to the system with my mega mega broadband connection to book my bed, surgeon, choice of drug supplier, date and time to suit me - and might even get a hyperlink to a package tour operator to organise my after op holiday.
Off course, that's assuming that my pension will meet my share of the costs - or will I still be working to help contribute to the supplier of the system? Maybe I should apply for a position with them now and enjoy the latest gravy train!!
8. MikeW
Straight from Yes Minister!
The "big project" mentality is still prevalent in government thinking.
They need to think 'Standards and Infrastructure' so that much of the work can be delivered incrementally, using low-cost compliant kit, delivering tangible benefits.
For that price, they could even set up a service company to assemble PCs from drives and motherboards, and still save money over buying from (e.g.) Dell.
Then write a compliant custom apps framework for L*n*x to avoid the £100-per-system Windows licence.
Or put the system specs out to tender and get multiple bids, on the understanding that a mix of suppliers would be used, thereby forcing competition to continue to take place during the lifetime of the project, rather than the "winner takes all" paradigm.
9. Neil Todd
My understanding of this is that the £6 billion relates to initial purchase & test and that the extra money is for full implementation. To portray this as a huge increase misrepresents reality. The second point is that the NHS trusts spend £1 billion pa on IT and that the new system replaces that cost. Therefore, whatever the final bill, over ten years you could knock off £10 billion to find the actual cost.
10. anonymous
Three years ago, I was involved in a tender to deliver VOIP for NHSIA - £3.5 million, the NHSIA has now been disbanded and some of the sites closed down......This was supposed to be a programme to show the the rest of the NHS how they should be running their networks.....as usual, decisions made by people who do not know how to run a business....what a waste of public money.
11. anonymous
I know nothing about this project, but having worked for government, I wonder how many consultancies and agencies are in the chain bumping up the costs, ripping of the tax payers, and now, potentially affecting patient care?
12. Nick Gray
In reply to other posts:
The NHSIA hasn't been disbanded, it effectively changed it's name to NHS National Programme for Information Technology. Some NHSIA offices closed or merged to be more cost effective.
The NHS has tried over the last 15-20 years to do this project piece meal, with hospital, GP surgeries and Primary Care Trusts, buying equipment from local suppliers, that's one of the main reasons it's failing. Lack of vision of the bigger picture.
All of these new contracts were put out to tender, if bidding suppliers couldn't meet the objectives in a cost effective manner, they were excluded from further negotiations. For example: EDS, HP, C&W and EMIS (the largest supplier of GP systems in the UK). Included in these new contracts are severe supplier penalty clauses for non delivery.
Also if you mix suppliers, for a similar service, you are going to get the buck passing that is currently going on. If you've got one provider doing, say the telecomms, then you can nail them to the floor and get them to fix the problem.
As for the £100 per windows licence, The NPFIT negotiated with Microsoft, threatening to go Open Source if it didn't get a better deal. Microsoft now offer the UK Government a volume discount plan across all the UK public sectors.
Consultants and agency numbers have been slashed by the NPFIT, if they don't offer the NHS value for money, they are again shown the door.
We need to stick to a plan, and this is the best we've got, and had for the last decade or so. If we throw it out, we'll be back to square one and have to go through the same painful experience some time in the future.
13. anonymous
But Nick, the NHSIA has been disbanded. And if it hasn't, why are most of its staff currently heading down to the job centre? - speak to anyone who works there. It has been disbanded and its powers handed back to the NPfIT - no seperation of powers.