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NHS gives up rights over patient software

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The Department for Health has given up rights over software delivered under the National Programme for IT.

It secured ownership of the NHS programme's intellectual property in 2003 as contractual insurance against the project going wrong. Now the project has gone wrong, it no longer has the insurance.

The Department admitted it no longer had rights over software delivered by Computer Sciences Corporation after it agreed earlier this month an interim resolution to a protracted contract disagreement over the suppliers' failure to deliver NHS software.

The Conservative-led coalition government had made public ownership of software IP the central plank of IT reforms it promised when running for election, when the now chancellor George Osborne said the NHS programme's failure demonstrated the need for government to build systems using open source software.

But by failing to retain rights over NHS software, the government has ensured private rights holders will call the shots in a primary area of public cyberspace.

The Department for Health has rebuffed repeated questions for further information about NHS IP for the last three weeks. It also continues to deflect questions about its renegotiated contract with CSC, which is estimated to be worth £2bn of public money.

The outcome will be that after 10 years of software development - done to public order and paid with billions of pounds of public money - the public will not have bought anything tangible at all.

Yet NHS Connecting for Health had ensured the department would "own the specially written software" delivered under NPfIT, said the National Audit Office in a 2006 report into the programme. This was presented one of four "key safeguards" against project failure.

Parliament verified the ownership safeguard during hearings held in 2008 by the Public Accounts Committee. In a hearing on 16 June 2008, John Pugh MP, now a member of the coalition government, sought assurances that the NHS had indeed secured rights over software delivered under the programme.

Gordon Hextall, then chief operating officer at NHS Connecting for Health, told the Committee: "We certainly own the intellectual property rights, so the intellectual property rights remain with the NHS."

Nevertheless, the Department of Health told Computer Weekly: "CSC will keep the rights to the software after the contract has ended and any licence extensions have been used."

Suppliers may have misled government over what the protection the IP ownership safeguard would really give them.

Dr Tony Shannon, who worked at Connecting for Health on NPfIT requirements and systems design for five years from 2004, said: "Nobody was in a position to challenge the [ownership safeguard claims] because they didn't understand the nuances of software."

In this state of ignorance, the NHS probably secured ownership only over the specification of its requirements for the system - not the system itself, said Shannon, who is working to implement open source software as Clinical Lead for Informatics at Leeds Teaching Hospital.

It must now be asked whether the government actually gave up its rights to NPfIT software or whether it or the public were misled about what the IP safeguard would give them.

Like the Department for Health, CSC has been ignoring Computer Weekly's questions on this matter for more than three weeks. It sent an emailed statement earlier this week, claiming it owned the Lorenzo patient administration system it developed to serve the NHS.

This much is common knowledge. No matter what the Department for Health told Parliament about its rights over NPfIT software, it is obvious NHS has not secured any rights over NPfIT software at all.

Computer Weekly asked both CSC and BT, the other NPfIT supplier, to explain how they ended up bagging ownership when both the NAO and the Department of Health had claimed the contract ensured they would not.

CSC has ignored Computer Weekly's further attempts at communication. CSC's system, called Lorenzo, was developed using UK public money, to a specification designed by doctors and health informatics experts across the country, but is wholly owned by a US corporation.

BT refused to comment about the issue at all. It said the question of its IP ownership over NHS software was a private matter between it and the government.

"It's commercially sensitive," said a BT spokesman.

"This doesn't show contempt for the public at all," he insisted when Computer Weekly pressed him to explain why BT's public contract did not make it publicly accountable.

"Our contract is with the National Health," he said.

If suppliers misled government over what the IP safeguard would deliver, this would amount to a shark card to claim private rights over a public space.

But the government and Department of Health may themselves have misled Parliament and the public over the IP issue.

The National Audit Office said the IP safeguard it described in 2006 had, like all the details in its reports, been signed off by the department.

An NAO spokesman was, however, unable to say whether it had cut-and-pasted the safeguard verbatim from a departmental submission, or whether it was condensed from its own analysis.

CSC finance director exits as fraud probe hits UK

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A CSC finance director has quit, while a number of his peers face disciplinary action intended to stamp out accounting problems that have drawn the attention of US regulators.

It emerged last week that a year-long investigation, which has already lead to purges of finance departments in Denmark and Australia, has now focused on the UK and engulfed CSC's troubled NHS contract.

The Cabinet Office has meanwhile extended negotiations with CSC over the NHS contract until 31 August, a year after the coalition government said it had resolved its NHS IT problems.

Neil Malcolm, CSC director of finance for manufacturing, chemicals, energy and natural resources, quit the company on 4 April.

He told Computer Weekly he had not been involved in CSC's troubled NHS contract. He said he had not been implicated in any fraud investigation. He declined to say whether he had been implicated in a wider investigation into accounting irregularities at CSC.

"I left CSC on 4 April. It wasn't disciplinary. It was my choice," he said. "I had nothing to do with the NHS contract."

"I'm not prepared to discuss this," he said. "I'm not going to comment on that at all. I'm not going to be drawn into an issue that's internal to CSC. That's between me and CSC."

He said he had been a director of finance for the UK.

CSC refused to discuss the nature of his departure. A CSC spokeswoman said: "It is company policy not to comment on internal matters or matters relating to staff departures."

Nothing had indicated that Malcolm had been involved in fraud. Andy Thomson, vice president of international finance at CSC, refused to confirm whether Malcolm's departure was related to any fraud or other accounting irregularities. He refused to answer any questions on the matter.

The majority of CSC's accounting irregularities, which are being investigated by the US Securities and Exchange Commission, were unearthed in its Managed Services Sector (MSS) business unit, and primarily in the Nordic region, the company said in a financial statement last week.

Irregularities were later discovered to have also involved CSC businesses in Australia and the Americas, as well as the NHS in the UK.

"In the course of the Audit Committee's expanded investigation, accounting errors and irregularities have been identified. As a result, certain personnel have been reprimanded, suspended, terminated and/or resigned. All of these investigative activities are ongoing," said the statement.

MSS accounted for 41 per cent of CSC's $16bn revenue in 2011 when the first irregularities were discovered. MSS houses CSC customers in sectors including aerospace & defense, chemical & natural resources, financial services, healthcare, manufacturing, retail and telecommunications.

$24m of "Intentional irregularities" were found in the accounts of CSC's £3bn NHS IT contract after a year-long investigation by independent auditors, said CSC.

"Certain CSC finance employees based in the United Kingdom were aware prior to fiscal 2012 of the aforementioned errors, but those employees failed to appropriately correct the errors. Therefore, the Company has classified these errors as intentional. As a result, certain personnel have been suspended and additional disciplinary actions are being considered."

The errors had overstated CSC's income from the NHS contract by $24m after failing to account for costs.

Investigators had found other accounting problems with the NHS contract, on which CSC wrote off $1.5bn last year after its continued failure to meet a 2007 deadline to deliver computer systems to health bodies over two-thirds of England. The investigation was ongoing. CSC did not expect further revelations would involve amounts large enough to dent its financials.

The US SEC probe, which is also ongoing, led to a string of revelations about intentional accounting errors in CSC's Nordics, Australia and Americas businesses. CSC Denmark CEO Carsten Lind resigned as details of the accounting problems broke last Autumn. Hundreds of redundancies have followed in the wake of a major Danish public sector IT failure and the loss of CSC's largest private sector customer in the region, the telecoms firm TDC, to Indian outsourcer Tata.

CSC is making approximately 1,100 redundancies in the UK, thought to be about 15 per cent of its local workforce, as it stands down teams that had been working on the NHS contract and absorbs the shock of financial results that recorded a $4.3bn worldwide loss last week.

The majority of the loss was attributed to the NHS write-off and a $2.7bn loss of goodwill over numerous acquisitions CSC had made in the last 10 years. $269m was attributed to a settlement CSC made with the US Army over its Logistics Modernisation Programme, one of 11 ERP projects that caused trouble for the US Department of Defence.

CSC paints NHS rosy for Wall Street

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Guy Hains - president of healthcare - CSC - Computer Sciences Corporation.jpgThere was no remorse from Computer Sciences Corporation last night as it told investors about another breakdown of talks with the National Health Service.

While hospitals across England wait for CSC to deliver patient information systems due five years ago, CSC said it was launching its health software in the US.

Talks broke up on 31 March, when CSC and the NHS failed again to find a contractual resolution to the computing giant's broken 2003 promise to deliver its iSoft Lorenzo software to the NHS.

CSC admitted in a conference call with Wall Street analysts last night that the NHS had still not been satisfied. Yet the computing giant had used its UK experience to build a healthcare business fit for rolling out round the world.

"It's an active part of our plan, to take iSoft to the US market," said Guy Hains, the CSC UK boss recently appointed as global president of healthcare systems.

"We see significant potential in applying this experience to other country health markets. There isn't a market globally that doesn't have considerable interest it learning from the UK NHS, both good and bad."

CSC was apparently best placed to dispense this learning. It had its sights on Spain. It was already busy in Holland, Australia, South Asia and South America.

But from whence had its chutzpah come? Not only had CSC still not satisfied its NHS contract, it hadn't even finished writing the software. Initial roll-out was due in 2007. Complete delivery was due this year. Hains told Wall Street CSC was now at last ready to roll out phase one but for a contractual settlement with the UK's coalition government.

But this was okay. Because CSC had a plan. This was not a plan for the reparation of 10 years of time and money the NHS has wasted on CSC. Nor was it a plan to recompense for the opportunity cost the NHS incurred while CSC dawdled over its clinicians' request for better patient information. It was a plan to get its own finances in order, negotiate a firm settlement with the NHS and dazzle Wall Street with a come-back launch into what is tipped to be one of the few global growth markets: healthcare IT.

Wall Street analysts privileged with the opportunity to ask Hains about this glorious transformation neglected to get his estimation of the value the British public subsidy had added to his corporation's healthcare business in the last 10 years. British tax payers are due a share of this tremulous global growth machine, no?

Waffle

Neither did Wall Street get to the bottom of the latest delay. Hains explained it away with waffle and claimed the details were not for public ears.

"I would say the delay reflects the complexity of the change being undertaken and the need for very detailed agreements," he said.

This was what they call a win-win, apparently. Hains reckoned that since the coalition government's NHS reforms involved devolving power to regional bodies, CSC was having to "consult very widely on this agreement".

That wide consultation did not as usual involve consulting with the British public, or even allowing them to know what the details of those consultations were. Ours is not to know. But it wasn't important anyway. There were "no specific roadblocks" to a contractual resolution, said Hains, who is personally conducting the negotiations for CSC. It was just taking time to settle the details.

We are not to worry our pretty little heads with man's talk about such things as public expenditure, mortality rates and what CSC has still to agree before British hospitals can start getting the software they were promised in 2003.

The NHS refused as usual to answer questions about it today. These mysterious details have meanwhile led talks to drag on for more than two years. It has led to an agreement in principle being torn up on at least two occasions.

Yet there will be no throwing of rotten tomatoes. The coalition government has no choice but to make a tidy deal with CSC. It's electioneering made NHS IT into such a gargoyle that it would not live down continued failure. CSC is, after 10 years of public nurture and a government-sanctioned monopoly kept in stasis while it did its R&D, one of the few suppliers that can deliver the goods.

Indeed, said Hains last night, "the timing is perfect".

"The key customer contact will now move, as indeed the government has stated as policy, much more towards the [NHS] Trusts.

"The major change is, we are not building a monolithic system to address the back-office through a large-structure, fixed price development programme with a central agency. The central agency will play a key part in the tripartite relationship. But a key focus of our activity will be working closely with the trusts," he said.

Pleased

The coalition government's health IT policy was, in corporate words, in synergy with CSC's latest business model. They had happened to be in synergy in 2003 when CSC was into doing monolithic deals and a Labour government wanted to improve the nation's health systems. But there was never going to be any monolithic system. That's the bogeyman. It was just a handful of monolithic deals for companies like CSC to install vapourware like Lorenzo in Trusts across the country.

CSC's failure to deliver was the main reason for the failure of that policy. The coalition used it to significant effect in kicking Labour out. It will now re-purpose Labour's legacy in its own image. It's what you call a win-win for CSC and the coalition. But mostly for CSC.

Hains pointed out that its strength in health IT had come last year from its acquiring iSoft, the troubled software supplier that had ultimately failed to deliver. iSoft had other business besides its yet unfinished NHS Lorenzo system. It had given CSC a business relationship with 85 per cent of NHS Trusts.

It had perhaps also given Hains reason to boast as he did to Wall Street last night, about 2,000 systems he said CSC had installed in the NHS to date.

NHS has been waiting quite a while for a computer upgrade.jpgOn 18 May last year the National Audit Office reported that CSC had installed just 15 of what by a rough calculation was 112 contracted NHS Trust systems. If you count the SME systems it had put into local doctor's surgeries as well, it had installed 1,392 of 4,441 systems due in 2007.

He did not clarify if his 2,000 installs included doctor's surgeries as well as those innumerable "legacy" installs it acquired with iSoft. Neither would the NHS confirm what tangible progress had been made since last May. Best not speak of such details, lest it upsets investors.

What a NHSIT year for CSC

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Christmas pudding.pngTuesday 27 December was a good day to bury bad news. With 60m Brits digesting their Christmas Bank Holiday feasts in front of crap telly, news outlets were running skeleton crews. The most work done anywhere was by the nation's sewers, straining under the seasonal glut in excrement.

This was the day Computer Sciences Corporation let it slip that it might have to write off the entire $1.5bn it has invested in the UK NHS National Programme for IT (NHSIT), after two years of negotiations under the threat of cancellation.

Was this some fit of seasonal goodwill from the most vilified of boohisstems integrators - relinquishing its claim on money otherwise needed desperately for aunt Mabel's tit transplant?

Or was it just the latest manoeuvre in the battle for public opinion being waged over Labour's National Programme for IT?

It was of course the latter and though CSC's warning was not the defeat it appeared to be, it was a retrenchment the beleaguered company did well to keep from the limelight. Now it has cleared all its skeletons from the closet and is reportedly close to appointing a new CEO, the markets might ease their sustained punishment of its share price.

Weak resolutions

The spotlight can return now to the government, which after a year of playing shark cards on CSC has achieved nothing of its ambition to scrap the National Programme.

It hasn't scrapped the programme because it can't simply tear up its contracts. It may not want to either. It outsourced the work. CSC, its outsourcer, invested $1.5bn in it. It developed an albeit unfinished suite of next-generation health software. It wants the guaranteed return on investment the NHS deal originally promised.

Unable to cancel the contract, the Cabinet Office has been able only to stall while the political machine piles up evidence in condemnation of the programme. If public opinion turned the contract toxic, CSC would have to get rid of it; NPfIT could be scrapped.

Public relations

This seemed to be the game when in February the NHS interrupted ongoing negotiations with CSC to issue a public threat of contract termination. CSC was still missing deadlines for systems it was originally contracted to deliver in 2007. But NHS couldn't terminate the contract without facing the question of its own liability for the project's failure.

So Cabinet Office forbade NHS from signing the deal until its Major Projects Authority had reviewed the project and issued a verdict on the MOU. The evidence meanwhile stacked up against NPfIT and CSC.

Negotiations reached a preliminary conclusion in May, in the shadow of a damning National Audit Office report into NPfIT's failure and the part CSC and other suppliers had played in it. But the terms (when leaked - Public Accounts Committee hearings that month were denied details) did not look pleasant: a one sixth cut in the £3bn cost of the contract in exchange for nearly a third fewer implementations and a year added to the contract term.

The MPA was apparently not content. Within weeks NHS CIO Christine Connelly was replaced with a Cabinet Office executive. MPA delivered its review, recommending the NHS extract further concessions from CSC, effectively condemning the MOU to the shredder. But the document was classified and seen by only a limited number of ministers and civil servants. CSC carried on in the belief that the review had not yet been completed. When CSC stated this in a statutory report to shareholders on 15 June, MPA stayed schtum.

MPA stayed schtum again on 3 August when the Public Accounts Committee produced its report into NPfIT, calling for some sort of review to consider terminating the contracts.

Hogwash

The MPA also stayed schtum when on 10 August CSC said in a statutory statement to shareholders that the MOU was still waiting on the conclusion of the MPA review. It wasn't until September that the Department of Health finally admitted it had the review. It said it would consequently seek to dismantle the programme more quickly than it had been doing. But this was hogwash: it had not reached an agreement over CSC's £3bn contract.

Cabinet Office finally published a heavily redacted version of its review on 23 September, just seven days before the six-month deadline for its return of a £170m advance if the MOU hadn't been concluded. Of course the MOU hadn't been concluded. MPA had redacted its final recommendation on the MOU. It had apparently not delivered its verdict so the MOU wasn't agreed and the money had to be repaid.

CSC had egg on its face over the repayment. Its CEO announced his retirement. CSC then went back to the negotiating table. But it told shareholders on 9 November it was still waiting on MPA's recommendation on the MOU and therefore the future of its contract. Its financial results were terrible.

The stand-off had achieved something. It had crushed CSC's share price to below a goodwill threshold, contributing to a £2bn deduction in earnings. That crushed its share price further. But there was still no resolution in negotiations that had now been going on for two years.

Nothing, it seems, would make CSC fold its cards. Yet if the government settled for anything less its ICT strategy and long-standing condemnation of the National Programme would look puerile.

Times £2bn CSC NHS exclusive.pngHard news

That was until 8 December when the Times Newspaper stepped in with the apparently shocking results of an "exclusive" investigation: the MOU would involve CSC's contract being extended by a year and £2bn, it said.

The Times story was ridiculous. But it caught on with some help from MPs on the Public Accounts Committee. Committee chair Margaret Hodge compared CSC to "cowboys". Whatever had been going on since negotiations had resumed, CSC was on the ropes, but still clinging to its contract. The MOU terms published as findings of the "exclusive" investigation had been public since May and a matter of public record since CSC repeated them to shareholders in June.

CSC had said in the summer the MOU deal would extend the contract a year. It said it expected to realize up to £2bn in revenue in the period. It was very unlikely this meant an additional £2bn, or two-thirds increase, on the existing £3bn contract. A £500m reduction was part of that same deal. It more likely meant that would be the period when CSC would realize the bulk of its income on the entire contract. It's payments had always been contingent on delivery. It might have won a quid-pro-quo extension for a cut in the cost of the contract, but MPA hard-nuts had not dragged negotiations out for another year only to hand CSC another £2bn.

Google Finanace share price shapshot for CSC - Year to 31 December 2011.pngWinter harvest

CSC's share price held out till a scheduled dividend payout on 20 December. It then took a dive. Ratings agencies started downgrading CSC. Phrases like "junk status" started flying around. A week later CSC said the MPA had rejected the MOU. So the Cabinet Office had finally delivered the verdict it had published internally in June and redacted in September.

CSC said the MOU talks would resume in January. But with nothing having been achieved in 2011, it had to face the possibility that it would not never recover the £1.5bn it had invested in NPfIT to date. Talks were clearly getting nowhere even now they were entering their third year.

So Cabinet Office goes back to square one after a year of public buffoonery and fruitless backroom scheming. It's ICT strategy is starting to look ridiculous. Neither the Department for Health, the Cabinet Office nor CSC will answer even the simplest of questions about the situation, such as when MPA actually delivered its verdict to CSC.

The only reason anyone knows anything about the talks is because CSC is required by law to tell its shareholders. They enjoy a greater right to know what about what the government is really doing with the National Programme than British citizens and tax payers.

Margaret Hodge may have been right. But the government's failure to produce a CSC deal that will allow it to conduct its planned "dismantling" of the National Programme and deliver redress for its failure makes it begin to look like it lacks the moral as well as contractual rectitude, no matter how bad a deal it thinks the NHS got in 2003.


CSC chief declares exit after scandalous year

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Michael Laphen - CSC CEO.png
CSC chief Michael Laphen announced his retirement today after a year of unresolved scandals.

His statement followed reports of the resignation yesterday Carsten Lind, CEO of CSC Denmark, the centre of an accounting scandal that caused the Securities and Exchange Commission, the US competition watchdog, to launch an investigation in February.

Laphen said CSC management had got the $16bn company on a solid footing. "I am confident that the company is well positioned for its next phase of growth and development," he said.

CSC followed the regulatory probe by sacking or accepting resignations from half its Nordic finance staff. It was simultaneously in a legal dispute over its unfulfilled £2.9bn contract under the UK NHS National Programme for IT. The ongoing delays led it to repay the NHS £170m two weeks ago. It meanwhile faces shareholder lawsuit in the US.

It has also been shaken by spending cuts by the US government, its largest customer. The US public sector accounts for 37 per cent of its business, most of it from the Department of Defence. CSC forecasts predict a return to growth in public sector business next year. The company's troubles have led to talk of a break-up or take-over among some City watchers.

Its share price had plummeted 40 per cent in the last year but rebounded briefly today on the news of Laphen's retirement.

60-year old Laphen became chairman, president and CEO in 2007 after 30 years at the company. He presided over a shake-up that led to nine of CSC's 10 executive directors being replaced, six of them last year. Vice president and controller Donald DeBuck is the only surviving executive who predates Laphen's taking command. Both were appointed executives in 2001, Laphen serving as president and chief operating officer. DeBuck served in various positions including temporary finance chief.

CSC's revenue has remained flat for the last four years. It booked $14bn of new business in the last year. Its operating margin has been squeezed to below 7 per cent. It has been increasing its offshore business to counter cut-price overseas competition. But it maintains that its competitive advantage lies in sustaining its longtstanding strategy: providing broad-base, big-ticket IT services and software to big-ticket sectors. It has advanced its cloud services to this end, earning a commendation from KPMG.

DoH deploys flimflam in battle for hearts and minds

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The Department of Health dramatically announced a non-story today, pausing from its negotiations with disfavoured ICT suppliers to publicly condemn - again - the computer systems they supplied under the National Programme for IT.

The department announced the "acceleration of the dismantling" of the National Programme. But could not say how it had been accelerated or what exactly was being dismantled.

"The statement today is a commitment to accelerate the process," said a Department of Health spokeswoman. "We are not giving today the detail of what that will involve."

The department announced a year ago that it was scrapping the National Programme for IT and has been in negotiations with suppliers ever since.

It is still in negotiations with suppliers and still announcing that it is scrapping the programme. But it cannot accelerate anything until the negotiations are concluded.

Primary programme suppliers BT and CSC have contracts for the supply of patient systems that extend to April 2015 and hold the NHS to paying a further £2.91bn for the scheme, said the National Audit Office in May.

Also over the summer, the Cabinet Office Major Projects Authority sent DoH its recommendations for the future of NHS IT. The DoH spokeswoman said today the MPA had concurred with its year-ago announcement about the scrapping of the National Programme. The year-ago announcement, made by Health minister Simon Burns, had concurred with Cabinet Office IT policy. The DoH today said it was concurring with the MPA recommendations.

The DoH refused to publish the MPA report. It said it was a Cabinet Office report. The Cabinet Office, which is big on government "transparency", refused to publish the report. It said it was a report about the NHS and therefore the business of the DoH.

The DoH 2010 announcement had unveiled a "Connect-All" strategy. This would involve introducing common systems standards so that any supplier could supply any system to the NHS, simply plug it in and it would integrate and communicate with any other system. This was similar in principle to Cabinet Office policy for government IT.

Coincidentally, a story fell into your humble correspondent's lap this week that the System One patient system CSC has supplied to GPs and community Trusts under the programme was not compliant with the NHS Data Model and Dictionary. It was therefore not interoperable, and not in keeping with either the terms of its National Programme contract nor the "Connect-All" policies of the DoH and Cabinet Office.

DoH's negotiations with CSC are the most excruciating of matters that must be "accelerated" before it can get on with "dismantling" the National Programme. Neither party was able to confirm the rumour about CSC's interoperability.

Also coincidentally today, trade association Intellect, representative of BT and CSC, produced a report on the interoperability of NHS systems. DoH's non-announcement had included one new detail, which was that it and Intellect were going to conjure up a market for the supply of health computer systems.

The market had of course been asphyxiated by the DoH's previous collaboration with Intellect members in the National Programme. Intellect today said it aimed to "create a vibrant marketplace" for small health ICT suppliers by its new venture with the department. It attached the interoperability report to its press release.

The department refused to discuss what was really happening: that was its negotiations with suppliers. BT and CSC also refused to discuss the negotiations.

All it and suppliers would say in addition was how much the National Programme had actually bought with the £6.35bn it had spent to date. That amounted to a national network, email and booking systems, and software to archive medical images.

Commentators thus found it hard to grasp exactly what had happened today. The Daily Mail reported: "£12bn NHS computer system is scrapped... and it's all YOUR money that Labour poured down the drain".

A hubbub ensued. The DoH was scheduled to make a major announcement about the programme later today. Word was, it was going to be scrapped.

David Rose, assistant news editor of The Times newspaper, got closer to the truth, or at least expressed a view that has echoed around the corridors of National Programme suppliers today: "Lansley bashes Labour ahead of that party's conference?," he tweeted this morning.

Health Secretary Andrew Lansley had coincidentally been doing the rounds with a complaint about the financing deals the last Labour government had used to build hospitals. The deals had many years to run. They were expensive. They didn't fit with the coalition government's aim to dismantle the NHS...

Lansley didn't really say he planned to dismantle the NHS. His department presumably only wanted to dismantle the National Programme, and hospitals, and any residual reason anyone might have to suppress their cynicism in face of such flimflam.

UPDATE:

BT said in a statement it was not renegotiating its NHS National Programme contracts with Department of Health. It was nevertheless in talks of one form or another about the future of its relationship with DoH.

That was relayed in media-speak: BT "continues to work with the Department to explore how best to meet the needs of the modern NHS".

That includes also the contract BT has to supply care records systems to acute trusts in London at a price nearly 50 per cent over prices expected even in the £multi-billion National Programme.

Shortly after the publication of this article, the Cabinet Office published its Major Projects Authority review of the National Programme. It has not published other reviews and has been unable to say whether its policy is now to publish its reviews or not.

The BT London contract had anyway been so poorly managed, said the MPA Review, it had a "crisis" that almost resulted in termination. All has been well, apparently, since about January.

That raises further doubts about the department's claim to have "accelerated the dismantling" of the Programme.

£8.8m NHSIT threat "hypothetical" (but already served its use)

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The Department of Health and South Central Strategic Health Authority may have forced inadequate, incomplete and immoderately priced BT RiO software down the throats of health Trusts under the threat of a £8.8m fine. But it didn't actually impose any fines because every Trust earmarked for a BT care records system did what it was told.

So, say those involved, the question of whether or not there was a fine was hypothetical. So if you'll just move along now please because there's nothing of interest here.

They said this after Computer Weekly asked them about the Business Case that Oxfordshire and Buckinghamshire Mental Health Trust (OBMH) built in favour of doing what it was told. The case rested on the threat of a financial penalty: BT RiO would have come near the bottom of the list of available options were there cost of doing anything else not inflated by an £8.8m fine.

The DoH refused to answer questions about the fine because the it had never been collected. OBMH hid behind the SHA.

Bill McAvoy, chief information officer of South Central SHA, told Computer Weekly it was "a hypothetical question about past events" and therefore "a relatively moot point".

"No penalty was invoked because the Trust deployed RiO," he said.

The penalty was not hypothetical when OBMH came to decide whether it should use RiO not. Then it was a very real threat. But there were some things that were moot points.

The most important was how the money would have been extracted from OBMH had it decided to stick with the care records system it already had or chosen some other better or cheaper alternative to BT RiO. The next most crucial moot point was just how BT was going to get paid for software it hadn't delivered.

The first question was unsettled. So it might not have necessarily meant lopping £8.8m off health budgets by turning away cancer patients, closing wards or sacking nurses. Though we cannot discount the possibility that the money wasted on NHSIT hasn't already led to such events indirectly, nor indeed that it helped the ConDem government hasten plans to privatise the whole beloved shebang on the false premise that it's not affordable.

Just how the penalty would have been levied on Trusts that failed to implement RiO was never determined, said McAvoy. Had the situation arose, the DoH and SHA would have got together with the offending Trust and worked it out.

"Any cost recovered from a defaulting Trust would be recovered by the Department of Health," said McAvoy. They would have referred to whatever general guidance was then available on the DoH extracting penalties from Trusts.

The money would then not have been paid directly to BT, at least not in the sense of there being a brown envelope or an invoice item reading, "Penalty for not installing BT RiO: £8.8m".

The penalty would have been "offset" against the Department of Health's contract settlement with BT, said McAvoy, "rather than being passed through to the supplier on an individual basis."

In other words, he said, parties to these large contracts sit down periodically to settle their costs and fees to one another, effectively squaring them off. A supplier might have spilled coffee over the database server, for example, while the customer might have decided it didn't want the software after all because it was over-priced tat (speaking hypothetically, of course).

At the end of the day, no money would have been passed back to BT, but it would still have collected the penalty payment. It would still have been paid for nothing, but would have been saved the embarrassment of bereaved relatives waving placards as BT money men drove off from the DoH headquarters at 79 Whitehall with their suitcase full of readies.

No doubt the DoH would have been saved the same embarrassment over collection of the penalty from offending Trusts in the first place. It wouldn't have actually sent the bailiffs round to take incubators and anesthetic equipment from delivery wards. It would have just squared it off in a quiet room somewhere. As long as BT got its £454m. That's all that mattered really.

And now all Mental Health Trusts in the south of England have done what they were told and installed RiO, the Department of Health has told them they don't have to use RiO if they don't want to. It's the DoH's new strategy of local autonomy. Looks like that's hypothetical too.

Agile in the NHS: 10 years, £5bn and still not finished

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Dick Dastardly.png
When the Department for Health signed £5bn of contracts for care records systems in 2003, Oxfordshire and Buckinghamshire Mental Health Trust (OBMH) already had one.

But OBMH was forced to swallow the system under the extortionate National Programme for IT (NHSIT) anyway, even though it would cost way in excess of twelve times what OBMH already paid for a perfectly functional patient system, and even though, seven years since NHSIT was conceived, the software still wasn't up to the job.

This must be what passes for agile development in the NHS: £5bn, 10 years and still not finished.

If you want to know why the Public Accounts Committee thinks NHSIT is an expensive failure, this is a prime example. OBMH bought the NHSIT software because that was the only way to avoid a £9m fine being levied on Trusts that didn't get with the programme.

The numbers are unbelievable, even without the extortion. OBMH had been paying an IT SME called Maracis £60,000 for ongoing support and development of its "enviable" PCIS care records system, which OBMH already owned under a perpetual licence that only cost £250,000. In comparison, NHSIT had arranged to pay BT £9m for each Trust it supplied under the programme.

The Trust expects the RiO system to cost in excess of £350,000-a-year when the NHSIT contract runs out in 2010 - and that's just for starters. Development costs will go on top. Then there's the cost OBMH expects to incur from buying in other systems to fill in the gaps left by RiO's poor functionality.

It sounds like too much for any cash-strapped NHS trust to swallow, and it's a wonder BT managed to persuade anyone to use its care records system. But lets not forget the extortion. OBMH's Business Case for using BT RiO said the chief reason was indeed the £8.8m fine it would be forced to pay if it tried to use an alternative - even if that alternative was the Maracis system it was already using when BT RiO and NHSIT were but a twinkle in some bozo's eye.

Farce

In the 12 years OBMH used PCIS, the system "served the Trust well", said the report. It put OBMH in the "enviable position" of already having a comprehensive records system. The Trust was nevertheless forced to conclude (after using it for 12 years) that PCIS wouldn't meet its strategic objectives in the long term because there was no longer a market for non-NHSIT records systems in the NHS.

No matter that Maracis had already "significantly" developed the system over the years since it first installed it at OBMH in 1998, four years before NHSIT even got started.

And what a farce it turned out to be. After NHSIT got started in 2002, OBMH was told to ditch a regional care records system it had already been working on with other Trusts. Just as well the Trust had carried on with PCIS because it had meanwhile supported new implementations of implemented document management, an integrated electronic health record and clinical management information - all while NHSIT was still trying to get started.

NHSIT originally planned to force Trusts in the Southern Cluster to accept the IDX CareCast records system on subcontract from Fujitsu, which then held the calamitous Local Service Provider Contract for the South. But IDX was shown the door in 2004, leaving NHSIT up the creek without a paddle. OBMH was meanwhile getting on just dandy with PCIS on mobile devices - being possibly the first trust to have electronic care records available to its community workers.

NHSIT meanwhile tried to clear up the mess it had created with IDX. It tried replacing it with Cerner Millennium, a system so so poorly suited for Mental Health Trusts that OBMH had to muck in on a programme to get it fit for purpose. But it was so rubbish they had to ditch that too. PCIS was meanwhile still going strong.

OBMH's ongoing use of PCIS was making a mockery of NHSIT. It not only had a working care records system, but it was being continuously developed as well - and for mere tens of thousands of pounds. It implemented support for the Care Programme Approach to mental health, an outpatient project, a patient transfer project, an outreach data project, and a Child and Adolescent Mental Health data project.

In the wake of Fujitsu resigning from the programme, Some Mental Health Trusts had meanwhile taken a look at the iSoft Lorenzo application. But Lorenzo's delays and financial problems scared them off. Then in 2009 BT bought up the remnants of Fujitsu's contract and trusts were lumped with RiO.

OBMH was still making great strides with PCIS. It automated document loading, implemented another child and maternity records system, a notes system and an archive project.

And then came crunch time. The Trust was told that if didn't ditch its trusty PCIS and install RiO the South Cental Strategic Health Authority would extract an £8.8m fine. Suddenly, the £90,000 a year it was paying for ongoing development of a system that was already and ever being made fit for purpose was nearly a £1m a year over 10 years. Who clocked the bonus for that one?

Thought experiment

To appreciate how absurd this situation is, contemplate spending £5bn on a patient administration system.

Remember that industry analysts used to justify the high cost of these systems by saying BT ought to be paid a decent rate for a decent job. Now try this thought experiment. Imagine installing Maracis everywhere (disregarding for now that this would be as absurd as installing RiO everywhere). The first time costs of Maracis are, according to the firm, £250,000 for a single Trust and £60,000-a-year for ongoing support and development. (£70,000-a-year if you throw in bespoke development).

Lets say for the sake of argument the 392 Acute, Mental, Community and Ambulance Trusts originally set to be supplied under NHSIT all bought Maracis and were all charged the same rate. Lets also assume (for the sake of argument because Maracis doesn't do a GP version) the 5,643 GP practices originally set to be supplied under the £5bn NHSIT programme all bought Maracis as well, and they paid an average (across practices from 1 to 10s of GPs in size) £40,000 for install and then £8,000-a-year. The total cost of the Maracis NHSIT contract would be £1bn. That's one-fifth of the cost. Even if you add £100m for large-scale extras and throw in another £100m for fat cat salaries and wide boy pensions, that's still only £1.2bn.

A more realistic comparison can be made if we were to imagine either BT or Maracis getting a contract to supply all 80 UK Mental Health Trusts. At the rate each of them established at OBMH, it would cost £720m under BT and £76m under Maracis.

This is clearly absurd. Just where has all the money been going?

Suppliers tell parliament NHSIT stories

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Pantomime villain.pngSo why did you take this undeliverable £multi-billion IT project on?

The Boo-Hisssstems Integrators were up before parliament again this week. MPs on the Public Accounts Select Committee wanted to know why the computer systems they've been building for the NHS are so expensive, so late and so not working.

Committee chair Margaret Hodge wanted to know why BT and CSC why contracted to do the work when it had clearly been undeliverable from the outset.

It's a good question. The government had in 2002 offered the entire administrative health IT market and payments of billions to what was then just five suppliers. The Department for Health would effectively banish the existing health IT market. It's five favoured suppliers would each get a ready-baked regional monopoly.

No matter that it was unfeasible. The Boo-Hissstems Integrators couldn't lose, as has become apparent now the programme is running seven years late and the government shows no sign of ceasing to subsidise their failure.

The healthcare presidents of BT and CSC, sole remaining suppliers of patient systems for the NHS IT programme, tried to persuade the committee Monday they had got the sprawling project under control. They claimed they hadn't finished the job till now because users' needs had changed.

Had they not taken so long over it, the system would have been delivered before the world had moved on. So here we are, 10 years later, and Margaret Hodge is having to ask them if they will ever finish the job - which she did.

She didn't get a straight answer.

Just how cushy these suppliers have had it under their NHS contracts became apparent when the committee turned its attention to Patrick O'Connell, president of BT Health. (See from 16.30 minutes in).

Both execs behaved as though they had the largest pensions in the room. But O'Connell showered the committee with patter not heard since Terry Thomas graduated from the School for Scoundrels.

Hodge was livid over BT's having charged £20m-a-site for patient records systems. Was this what BT called value for money?

BT at PAC - 23 May 2011.png"I think the benefit the systems' producing are equivalent to the value for money you started out [with] before it was rearranged into a different setting that will not only produce value for money, it will produce more value for money going forward," said Terry - sorry, Patrick.

He made a mockery of the inquiry when Ian Swales, the mild mannered MP from Redcar, took the gavel.

Swales, clearly a decent man, started out well enough. The software's simple to produce, so where has all our money gone: surely its a failure of BT management?

But he started flapping. His question became babble. It was as though there was something withering about O'Connell's stare.

"You mean BT management?" asked the BT president reproachfully. A condescending smile fluttered near the corner of his mouth. Ho, you little worm. So you think you can spar with me?

Ian Swales on PAC - 23 May 2011.pngDuel

Swales was going to spar, yes.

"The software costs are trivial," persisted the MP.

"A teenager in their bedroom can automate an email from one system to another."

And so the contest was on.

O'Connell wrestled like a Hydra over this simple question of how much of the billions wasted on NHS IT had been hoovered up by BT management.

He played dirty. He swatted at Swales with a suggestion the MP was doing a poor job. Then he described just how significant were the forces at his own command, running as he was, or claimed to be, the largest such public IT system in the world.

He finished with some smug sales patter.

The combination of a threatening tone, belittling look, a put down and a puffed chest had been enough in the space of just a few moments to cause the MP to sag like a classical hero in the jaws of defeat.

Swales began mirroring O'Connell's patter about the size of his IT project, repeating it as though it was a question from the committee. All seemed lost.

"So were we wrong to ask for it then?" was all Swales could manage.

It was a wilting repetition of the claim made by Boo-Hissstems Integrators that customers were at fault for public sector IT failures because they asked suppliers for the wrong thing in the first place.

Hodge stepped in like Hercules' faithful charioteer, and Swales got back to his feet, a little unsteady.

"So can you answer my question?" the MP blurted.

But he was weak from all the flapping. He asked how much BT and NHS management were to blame for the mess in NHS IT. It gave O'Connell a way to slither round the question.

BT at PAC - 23 May 2011 - 2.png"I don't think that's the issue," said the BT exec, setting up his misdirection.

"If you are talking about NHS staff, we have found them to be perfect, dedicated, committed, and have worked extremely hard to advance health care in a very evolving and changing environment."

O'Connell mocked a little choke of emotion as he spoke.

He ended with a little laugh. This was childs play. He thought he had the day.

But Swales would not give in.

He might not have had the wherewithal to handle the BT exec's deceits. But he was a representative of the people. He lifted his last question like a great, blunt sword and whacked it over O'Connell's chuff about the poor, offended NHS staff.

"The delays are all down to your companies, then?"

O'Connell lost his poise. Did this pipsqueak MP not know when he was outclassed? He got tetchy, the last recourse of the playground bully.

He starting blaming users again.

What users wanted today was different to what they wanted 10 years ago. Every NHS Hospital Trust wanted its own internet domain nowadays. He concluded with a feeble cad's flourish: "I don't know if you know what a domain-per-trust means?"

Hodge called order, noting that what NHS users wanted today was exactly what they wanted 10 years ago - a working system.

BT at PAC - 23 May 2011 - 3.pngDefeat

Now it was O'Connell's turn to babble. His game was up.

Richard Bacon, the heavy-hitting MP from South Norfolk, asked him about the trouble the National Audit Office had trying to reconcile numbers submitted by BT with those from the Department of Health.

O'Connell tried to claim there were no such discrepancies.

He started flapping. BT's numbers did reconcile with those of the DoH, he said. He suggested the government auditors had got their numbers wrong. His heavy gold jewelry flashed for the video cameras.

Bacon was trying to find out why BT was charging £9m per site for a records system that should cost under £2m.

"That's part of the numbers we are trying to reconcile," said O'Connell, drawing laughter from onlookers at the back of the committee room.

The committee was none the wiser on the numbers. And it won't be till it can open BT and CSC's books. But it did get a measure of these Boo-Hissstems integrators.

Spanner jams data centre mergers

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Mosquito up close.pngThe Cabinet Office dropped a stinker in Parliament this week, admitting it's data centre consolidation programme is lacking fundamental intelligence.

The Public Administration Select Committee asked Cabinet Office how many of the 220 data centres used by central government were actually owned by private suppliers. How on earth can you consolidate 220 data centres, the question implied, when most of them are owned by different suppliers and operated under different contracts.

Don't know, said the Cabinet Office in written evidence to the committee.

We don't know how many central government data centres are privately owned, it said. We don't actually know what contracts we have across government either. And while you're at it, neither have we any idea what the average cost of a desktop computer is in the public sector.

Look closely and you might spot a pattern here. Government has tried and failed for 10 years to get decent benchmarks on IT spending. It meanwhile has to beg suppliers for the numbers: tell us how good a deal you are giving us because we don't know.

Suppliers reckon they're giving good head. And then you hear the Department of Health has spent £2.7bn since 2003 on a nation-wide patient records system suppliers still haven't delivered.

So where does all the money go? Two point seven billion pounds to knock out a patient database: it can't all go on second and third country homes for overpaid wide boys and team-building weekends in Grouse season. Can it?

Pantomime baddies

As for data centres, the Cabinet Office thought a year ago there were just 130 of them in central government. Even then it should have known what it was talking about. A posse of boo-hissssssystems integrators brought the consolidation proposal to Cabinet Office on a plate in 2009. Counting data centres is not rocket science, even for these bozos.

But by late 2010 Cabinet Office found 90 data centres had fallen down the back of the sofa. Central government had 220 data centres it had to consolidate, not 130. And now, two years after busty trade body Intellect dreamt up the whole idea, Cabinet Office still doesn't know which Intellect members actually own them and, one would assume, just how good their offer to consolidate really is, or indeed how it might work.

Think of it like this. If a posse of 10 boo-hissssystems integrators came knocking on your door proposing a way to drastically reduce the amount of money you had to pay them for data centres, you wouldn't think it a bid odd, would you? No, you'd take their plan and present it as a data centre consolidation programme toot suite.

Ask around, and it becomes apparent government's lack of intelligence about what it pays its ICT suppliers to do might inhibit the consolidation programme's aspirations.

Dr Richard Sykes, a data centre consultant, reckons suppliers only proposed data centre consolidation because they got wind of mega-data centres run by the likes of Amazon and saw their number was up. What an old cynic.

At least, he says, central government's estate of data centres had "grown like topsy". As each department realised it needed a data centre, it got one - and got one of its own on the advice of an oligopoly of ICT suppliers.

Now they're all over the place and thank Christ someone noticed what a killing these suppliers were making because poor Mrs Harris didn't get on too well this winter and she's wondering if her winter fuel allowance will see her through next year what with the wide boys having pissed her pension up the wall and all our taxes having been wasted on all these bloody redundant data centres.

By the time the consolidation plan had become the G-Cloud Vision, and the Cabinet Office had fleshed out proposals in consultation with SMEs, people like ex-CIO John Suffolk started saying how government intelligence about its own IT expenditure would always be one bob short as long as systems were not implemented using agreed standards.

The government wasn't getting straight answers from its suppliers. It's tempting to think of them as self-serving parasites. That would probably be unfair. But when the Cabinet Office says the problem with public sector IT is government has not been an intelligent customer, that is only half the story. It's tantamount to saying, blame the victim.

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So how do you find out how many central government data centres are owned by the private sector if you can't trust their answer?

You could order them to open their books. It might not be necessary for something as simple as data centres. But there's a few other riddles you could answer while you were at it. Like where did that £2.75bn of NHS money go? Can we have a line-by-line breakdown submitted to the National Audit Office, please?

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