NHS moving forward

October 08, 2008

Posted by: Martyn Hart

According to recent news reports, health officials are considering a £100m payout to BT to take over eight NHS sites once Fujitsu leaves the £12.7bn National Programme for IT (NPfIT). This consideration of further spending comes as the Fujitsu £1bn contract comes to an end.

Outsourcing in the NHS used to mean one thing, slashing costs and streamline processes. Previous estimates of costs for IT support at these sites were approximately £10m a year. The current consideration of £100m seems a drastic leap for some, however they may reflect a more realistic future for the NHS. The public sector appears to be maturing in its procurement approach.

The new figures may represent a more accurate approach to examining internal process costs and functions which, in the long run, will enhance any further outsourcing deals.

The public sector still needs to be careful not to fall into the trap of considering outsourcing deals based solely on cost. The NHS is trying to shake off its previously unpredictable and damaging outsourcing past and now needs to understand the need for a sustainable and predictable deal that has realistic figures for both parties to work with.

There are guidelines available for public sector organisations seeking advice on procurement. The Office of Government Commerce produces some excellent guides such as the Gateway Review process and the NOA’s Body of Outsourcing Knowledge (the BOOK) also offers helpful advice.

These are very useful and have a wealth of information which outsourced project staff can readily access. But it is very important to use these guidelines constructively and not merely as a way of ticking boxes.

BT was an obvious choice, considering its already London’s NPfIT local service provider and therefore has an existing relationship with the public sector. However they must ensure that any new contract has metrics that are attainable and representative of the task in hand.

There is evidence of maturing in certain aspects of public sector outsourcing, but there needs to be an understanding of the need for a deal structure and commercial terms that avoid the ‘bid low then increase’ situation.

This can be done by simply looking beyond the procurement process and understanding the need for a sustainable and predictable deal that ensures that the contract is signed, then managed and contained within agreed parameters. If the public sector continues to undertake poor contract negotiations or rushed deals, ultimately taxpayers will foot the bill.

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