London: Richard Bacon MP, member of the Committee of Public Accounts (PAC), says that the NHS's National Programme for IT, led by IT consultancy CSC, is one of the worst contracting fiascos the UK public sector has known — and warns that the Universal Credit project could suffer from the same failings:
"The taxpayer is continuing to pay the price for the ill-fated National Programme for IT in the NHS.
"Although officially 'dismantled', the National Programme continues in the form of separate component programmes which are still racking up big costs.
"The original contracts with CSC totalled £3.1 billion for the setting up of the Lorenzo care records system in trusts in the North, Midlands and East. 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.
"The Department is now assuming that just 22 trusts will take the Lorenzo 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.
"Parliament needs to be kept informed not only of what additional costs are being incurred, but also of exactly what has been delivered so far for the billions of pounds spent on the National Programme.
"The benefits flowing from the National Programme to date are extremely disappointing. The Department estimates £3.7 billion of benefits to March 2012, just half of the costs incurred.
"This saga is one of the worst and most expensive contracting fiascos in the history of the public sector. Yet, as the much more recent Universal Credit project shows, there is still a long way to go before government departments can honestly say that they have learned and properly applied the lessons from previous contracting failures such as the National Programme. It should be plain to anyone that we are witnessing systemic failure in the government's ability to contract.
"Given the Department's track record with the National Programme, it is very hard to believe that the paperless NHS towards which the Department is working has much chance of being achieved by the target date of 2018."
Richard Bacon was speaking this week as the Committee published its report examining the current position on the dismantled National Programme for IT in the NHS. Below we carry the PAC's comments on the programme in detail.