The government claims £1 billion savings as parts of NPfIT live on
The Department of Health (DoH) has signed a legally binding agreement with the American IT service provider CSC with which it hopes to draw a line under the failed National Programme for IT (NPfIT), and save the British taxpayer £1 billion.
Under the agreement, CSC will continue to deploy the Lorenzo electronic patients’ records system, already used by 10 NHS trusts. The rest of the NHS organisations will be free to choose alternative IT suppliers.
The agreement forms a part of the government effort to dismantle NPfIT, which was at one point hailed as “the biggest public sector IT project in the world”, without risking costly litigation.
Lorenzo is back
Devised in 2002, NPfIT was originally estimated to cost £2.4 billion, but after almost a decade, and with little to demonstrate significant progress, the costs had skyrocketed to £12.7 billion.
By August 2011, CSC, one of the key partners selected to deliver the Programme, had implemented just 10 out of 166 Lorenzo clinical information systems scheduled for the North, Midlands and East region 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. Meanwhile, CSC admitted that it faced a $1.5 billion (£956m) write-down of its costs associated with the NPfIT.
The DoH had to find a way out of a really unpleasant situation. It was obvious that the rotting corpse of the NPfIT had to be buried as soon as possible. But, if the Programme was simply cancelled, the government was risking either a full-blown lawsuit from CSC or paying expensive termination fees.
Under the new four year agreement, CSC’s exclusive rights to be the only provider of clinical IT systems in the North, Midlands and East of England have been revoked. The new contract also includes clauses that will prevent the company from suing the UK government in relation to its previous NPfIT contracts.
It doesn’t mean that Lorenzo will be going away. The system will be changed to ensure it is “fit for purpose and focuses on the NHS’s current needs as well as providing value for money”. This time, the pricing model will depend on the actual number of deployments, and deployments themselves will be approved only after the NHS trust has developed a robust business case.
According to the DoH, the £1 billion saved this way “would be enough to pay for half a million extra knee and hip operations, and almost 15,000 extra doctors.”
“The modern NHS still needs healthcare IT systems to exchange information securely and meet the needs of their patients. By re-shaping this contract, delays will be avoided in delivering much needed IT systems to the NHS, and will ensure the investment made to date is not wasted,” said health minister Simon Burns.
“As I emphasised when I met with 20 of our top suppliers just last month, ours is not a Government that will tolerate poor performance,” commented minister for the Cabinet Office Francis Maude. “Today’s announcement will leave suppliers in no doubt that we will act to strip out waste from contracts where they offer poor value for the taxpayer.”
“Under this agreement CSC will continue to have the opportunity to support the NHS ICT infrastructure through deployment of our groundbreaking Lorenzo base product solutions, now rigorously tested and approved for wide-scale deployment across NHS. We are already seeing strong demand from NHS trusts that are confident our solutions will bring the safety and efficiency gains required by a modern NHS,” said Mike Lawrie, CSC’s president and CEO.
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