Is CfH central health IT spend beyond Cabinet Office control?

Conservative MP Richard Bacon, an established member of the Public Accounts Committee, has written a fascinating letter today - 5 April 2011 - to David Cameron, the Prime Minister.It questions whether NHS Connecting for Health - a part of the...


Conservative MP Richard Bacon, an established member of the Public Accounts Committee, has written a fascinating letter today - 5 April 2011 - to David Cameron, the Prime Minister.

It questions whether NHS Connecting for Health - a part of the Department of Health - is putting itself beyond attempts by the Cabinet Office to control spending on IT contracts.

If Bacon's concerns are well-founded this could explain why the Department of Health has managed to keep largely intact the £12bn NPfIT, the Summary Care Record and Healthspace, despite the Cabinet Office's moratorium on IT spending and the cancellation of some projects that were judged to be failing.

It has long been unclear how NHS CfH and the Department of Health have managed to remain all but untouched by the cost savings promised by Francis Maude, the minister in charge of the reform of central government. 

CfH has slimmed down, though this cost-cutting was started by the Labour government; and CfH retains its former strength as the NHS's central IT organisation and the holder of large contracts. 

The Health Secretary Andrew Lansley appears to have little influence on CfH and the NPfIT, while the national programme's minister Simon Burns is, arguably, the NPfIT's most senior press spokesman.  

Bacon's letter to Cameron - parts of which are published below -  is about current negotiations for a new exclusive deal between CfH and CSC  under the NPfIT. 

Bacon says:

"I believe you should insist that Connecting for Health accepts the need for full and unhampered Cabinet Office involvement in the renegotiation process".

Bacon is concerned that officials are seeking to finalise a long-term deal with CSC which could be costly and poor value for money. He is also worried that CfH and the Department of Health are seeking to sign a deal with CSC without involving the Cabinet Office.    

Bacon says he is convinced that once central milestone payments are taken into account, CSC, and BT, the two remaining central NPfIT contractors, "are charging the NHS a great deal more for each system than would be charged by normal (i.e. non-Local Service Provider) suppliers."  

He adds: 

"Constant amendments to LSP [local service provider] contracts to give the suppliers more time, more options, and more product opportunities simply mean that the NHS is landing itself with more serious and avoidable problems.  

"It should be remembered that over the last seven years the NHS has accepted old systems that predate the National Programme - supposedly as a short term interim solution when the timetable for the Lorenzo system first slipped - and it has tolerated delay after delay as deadlines were missed.  

"The NHS has spent tens or even hundreds of millions of pounds of its own money on Lorenzo, trying to install the frankly uninstallable.

"I therefore believe that any settlement with existing Local Service Providers must be separated decisively from any consideration of future NHS business.  In other words, CSC (and in my opinion also BT) must be made to compete in an open market as best they can."  

"I believe the time is right for you to use your good offices to ensure a sensible outcome to the contract renegotiation with CSC."


There are, indeed, concerns within the Cabinet Office that the Department of Health is not involving the Cabinet Office in its negotiations with CSC. 

The Department for Work and Pensions involved the Cabinet Office in its internal discussions before it c ancelled a £330m desktop contract with Fujitsu, but the Department of Health remains more aloof. 

NHS Connecting for Health employs some talented individuals - but culturally it seems to consider itself a satellite of the rest of the government machine. It's extraordinary that central NPfIT contracts and central IT systems such as Summary Care Records and Healthspace have survived the coalition's attack on too much centralisation and central databases. 

Perhaps it's because the Department of Health and NHS CfH are deemed too difficult to handle and are therefore left to do what they want. 

It is time the Cabinet Office turned its searchlights on the DH and CfH which have for too long been more preoccupied with processes - tendering for and awarding contracts, renegotiating them, and researching new contracts - than on the poor outcomes of those deals for the NHS. 

Awarding and renegotiating contracts, and busying yourself in new IT, frameworks, standards and toolkits, is always more fun than making sure existing deals deliver.        

Update: Since Bacon sent the email to the PM - which was copied to Francis Maude - it has emerged that the Cabinet Office's latest attempts to become involved in the negotiations between CfH and CSC have come to nothing. Should any department or part of a department be beyond central control? CfH appears to be, which should encourage the PM to intervene.    

Excerpts from Bacon's letter today to David Cameron:

"The NPfIT contracts with service providers are fundamentally broken. There really is no good public policy justification for continuing them, since the Local Service Providers (LSPs) have manifestly failed to deliver what was expected of them.  However, the terms of the contracts seem to raise a significant threat of legal action if the government were now to withdraw from them unilaterally. The government is now exploring how it might minimise that risk, or at least maximise the chances of winning any legal action that is taken.  

The Efficiency & Reform Group in the Cabinet Office have rightly taken the view that - as with other government IT suppliers - the National Programme LSP contracts should be set within the wider sphere of government computing and the overall relationship which suppliers are seeking to have with the Crown.   It should give the LSPs pause for thought if any legal action they might take could put them in dispute with the entire UK public sector and not simply the NHS.  

Any IT supplier with significant government contracts or ambitions to enter into them in future would have to take that into serious account.  In this context, it is worth stating that Fujitsu is taking a very constructive approach to its overall relationship with government.

.. Connecting for Health seems to remain committed to the delivery of systems through Local Service Providers such as CSC that have been shown to be unreliable, subject to serious delays and, even after contract renegotiations, unreasonably expensive. Furthermore, CSC’s offer to extend its contract and then to offer a choice of software instead will not help;  even with the proposed reduction from 220 to 80 Trusts, this would cause serious problems, which I would summarise as follows:

 ·         CSC have been proven to be very expensive and also very bad at deploying timely and efficient systems in the NHS;

 ·         The Government has rightly signalled the need to return to a free market for NHS IT solutions, where hospitals can choose the best systems from the best suppliers, and poor suppliers like CSC will have to up their game if they want to win business;

 ·         Allowing CSC to deploy whatever systems they choose, to 80 sites or more, would be a major distortion of the marketplace, without any compensating gains. Many Trusts would feel obliged to opt for CSC systems because they would be “free” to them; other suppliers would be unable to compete. 



"Recommended For You"

National Audit Office will report on the NPfIT next week More NPfIT craziness?