The government has scrapped the National Health Service's centralised £12.7bn National Programme for IT (NPfIT) in favour of a "connect-all" strategy in an effort to save £700m on the late, over-budget project.
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The controversial programme "is no longer needed", according to a statement issued by the Department of Health. Instead, "a more locally-led plural system of procurement" will operate, but national applications already in place will continue.
Health minister Simon Burns said moving IT systems closer to the frontline was expected to save £700m on top of the £600m savings announced by the Labour government in December 2009.
"These savings will mean that the total cost of the programme will be reduced significantly from the original forecast of £12.7bn for combined central and local spending to £11.4bn," Burns said.
The move will allow NHS organisations to introduce smaller, more manageable change, in line with their business requirements and capacity, he said.
A review of the NPfIT concluded that retaining a national infrastructure will deliver best value for taxpayers.
"Applications such as Choose and Book, Electronic Prescription Service and PACS [picture archiving and communications system] have been delivered and are now integrated with the running of current health services," it said.
These were mature systems that should be run as IT services under the control of the NHS, Burns said.
NHS trusts will now be free to purchase IT systems locally, although existing contracts with the two main supplier to NPfIT, BT and CSC remain in place for those trusts that wish to use them.
"Localised decision making and responsibility will create fresh ways of ensuring that clinicians and patients are involved in planning and delivering front line care and driving change," said Burns.
"The new approach to implementation will be modular, allowing NHS organisations to introduce smaller, more manageable change, in line with their business requirements and capacity. NHS services will be the customers of a more plural IT supplier base, embodying the core assumption of connecting all systems together rather than replacing all systems."
NHS director general for informatics Christine Connelly, who was responsible for the centralised NPfIT, said: "It is clear that the National Programme for IT has delivered important changes for the NHS including an infrastructure which the NHS today depends on for providing safe and responsive health care. Now the NHS is changing, we need to change the way IT supports those changes, bringing decisions closer to the front line and ensuring that change is manageable and holds less risk for NHS organisations.”