Breakdown of £546m NPfIT payment to BT

Updated 15.40pm 30/11/10Conservative Richard Bacon - who knows more about the National Programme for IT in the NHS than any other MP - has been tenacious in his questioning of a payment to BT of £546m.In August 2010 Bacon wrote to the National...


Updated 15.40pm 30/11/10

Conservative Richard Bacon - who knows more about the National Programme for IT in the NHS than any other MP - has been tenacious in his questioning of a payment to BT of £546m.

In August 2010 Bacon wrote to the National Audit Office seeking an investigation into the £546m NPfIT payment. He said £400m of the £546m had not been properly accounted for and so raised questions about the proper use of public money.

Now the NAO has obtained from the Department of Health a breakdown of the £546m, which shows that officials paid BT £224.3m for 25 deployments of the "Rio" mental health and community system, including support until October 2015. 

NHS supplier Maracis has evidence that Rio deployments outside the NPfIT have each cost less than £1m, including five years of support. This would suggest that the payment to BT of £224.3m could be as much as £200m more than necessary.

The NAO also reported to Bacon that the Department paid BT £182m for taking over seven NHS sites that had installed the Cerner Millennium patient administration system when Fujitsu was the local service provider. The £182m comprises £108.9 for five years of service management of the seven NHS sites and £73.8m for transferring the work of the seven sites to BT's data centre. 

NHS IT suppliers say that the seven NHS organisations could have bought new and advanced patient administration systems, including support for five years, for a maximum of £15m per site, or £105m in total.

Fujitsu left the national programme in May 2008 when its withdrawal from talks over contract renegotiation prompted the Department of Health to terminate its contract. The basis for the contract termination remains in dispute between the Department and Fujitsu. 

The NAO told Richard Bacon:

"The Department has advised us that Fujitsu's withdrawal from contract resetting negotiations had not been expected, and consequently no replacement suppliers had been approached at the point of termination.

"The Department reports, however, that it had given consideration to options for maintaining service at those NHS sites that had gone live as part of the Fujitsu Local Service Provider LSP contract, in case the contract renegotiations proved unsuccessful. Four options had been considered to provide continuing LSP services to the South. 

* Undertake a new procurement to identity a new supplier

* Contract with BT, the LSP for London

* Contract with CSC, the LSP for the North, Midlands and East

* Contract with BT for 75% and CSC for 25%

"These options were considered on the basis of the scope of the original Fujitsu LSP contract, as mentioned earlier, but excluding those deployments that had already been delivered. 

"The Department calculated the estimated costs of the deployments still remaining at the time of the termination using the prices in the existing LSP contracts held by BT and CSC, adjusted for risk. 

"This initial appraisal of options was validated by Pricewatercoopers and the Office of Government Commerce, and informed the basis of the decision by Health Ministers and the Chief Secretary to the Treasury to terminate the Fujitsu LSP contract."


In the end - and after taking advice from Ernst and Young, PricewaterhouseCoopers, IBM, Deloitte and the Office of Government Commerce -  the Department agreed to pay BT £546m for work at seven NHS sites, support and deployments of Rio at 25 NHS sites, and new Cerner Millennium deployments and five years support at three NHS sites.  

These are the figures reported by the NAO to Richard Bacon. They are based on information given to the NAO by the Department of Health.

Breakdown of the £546m contract awarded to BT under the Southern Programme for IT

1) 25 Rio deployments at mental health and community trusts, including service management until October 2015.   £224.3m (c) 

2)  Service management for seven live in the BT data centre - April 2010 to October 2015.   - £108.9m

3) Transfer of seven live sites to a BT data centre    £73.8m (a)

4) Service management for eight live sites in Fujitsu data centre - July 2009 to March 2010 i.e. prior to transferring the services to BT data centre. (see (a) and (b)  - £35.1m

5) Four new Cerner Millennium deployments at acute trusts, including service management until October 2015 - £65m (c)

6) Upgrade of six live sites from Cerner Millennium R0 to LC1  - £16.5m

7) Other including TUPE, clinical safety work, integration, resolution of known defects in Cerner Millennium Release R0, delivery of data set change notices, provision for contract change notices - £12.2m (a)

8) Hosting of map of medicine application, software licenses and service management of the application  - £5.5m

9) Orders and results (ordering of radiology diagnoses, x-rays, scans and pathology tests) - £4.9m

Total £546m

a)    Includes costs arising from the termination of the Fujitsu contract.

b)  These costs were set by Fujitsu and were higher than those in the original local service provider contract. The Department is seeking to recover the increase in costs as part of its ongoing dispute with Fujitsu.

c) The Department told the NAO that these costs were determined on the basis of the costs of BT’s existing London local service provider contract - Change Control Notice 2


MP seeks inquiry into £546m NPfIT payment to BT.

NAO to publish new NPfIT report - did BT get excessive payments?

NHS trust claims first paperless records success.

The NPfIT has ended - but what has changed?

Rio is a major success for BT and NHS London.

"Recommended For You"

Was Prime Minister misled over state of NPfIT? Government pays BT millions extra for work in fewer NHS trusts