Ruth Carnall, the Chief Executive of NHS London, has told all London NHS Chief Executives that a cut of more than £100m in funding for BT’s NPfIT contract means that “it will no longer be possible to provide a comprehensive solution that was anticipated in 2003”.
Glyn Hayes, president of the UK Council for Health Informatics Professions, was quoted in this morning’s Financial Times as saying that Carnall’s letter marks the “first official admission that there are things it [the NPfIT] will not do that it was intended to do.”
Conservative MP Richard Bacon, a member of the Public Accounts Committee who has followed the NPfIT more closely than any other MP, said this morning that the saving of £112m on BT’s £1bn local service provider contract represents an extraordinarily good deal for BT and an extraordinarily bad one for taxpayers.
Some in the NHS estimate that, as a result of the deal, the government will pay BT about £900m as the local service provider for London but will contractually commit the supplier to delivering only about £500m of products and services.
This generosity to BT is, in part, because Whitehall officials andministers are anxious to keep supplier in the programme after its losseson the contract. The loss of BT would leave the government with CSC asthe only remaining NPfIT local service provider.
BT has alsobenefited from a priority set by government for negotiators to giveNPfIT savings the primary consideration, with much less attention to thepotential benefits.
“If BT isnow being required to do so much less, why is the companystill being paid nearly all the money it would have received previously?It’s very hard to see why BT is still being paid so much money. Itmakes absolutely no sense.”
Carnall’s letter says:
– “the provision of GP solutions hasbeen removed” from BT’s commitment – which means the company doesn’thave to deliver, install and support about 1,400 GP practice systems.
-the Cerner and RIOelectronic patient record systems will “no longer be available to allorganisations”. This is expected to mean that about half the NHS trustsin London will no longer have their main hospital systems centrallyfunded – they will have to re-think their plans and fund new patientadministration systems from their Trust budgets. This was the fundingposition some were in before the launch of the NPfIT in 2002.
-“the provision of an ambulance solution has been removed”
– “thereare other areas where scope has been reduced, for example, it has onlybeen possible to afford a further 12 month licence for the use of Map ofMedicine. This will give us time to consider how to continue meetingthe needs provided by this system”. The Map of Medicine Ltd is describedas a “one-stop clinical resource forclinical decision making”. It’s a wholly-owned subsidiary of TheHearst Corporation.
BT told the Financial Times that the new deal “delivers a more flexible approach that meets the evolvingneeds for the NHS”.
One aim ofthe NPfIT in London had been to achieve economies of scale by havingone main IT supplier deliver the same hospital system throughout thecapital. That plan was always over-ambitious and is now in shreds.
What’smost remarkable is the poor value for money the deal with BT nowrepresents. Ministers have put potential benefits to one side in theirnegotiations for savings.
For BT, the NPfIT was at one pointloss-making. But in the past two years ministers have showered thecompany with money.
Mike O’Brien, the NPfIT minister, said in aParliamentary reply in January 2010, that BT took over responsibilityfor the Cerner Millennium system at eight sites in the southernprogramme for IT area, which were previously covered by a contract withFujitsu Services Ltd.
“The increase in the totallifetime value of the BT local service provider contract consequent ontransfer to the company of elements of work in the southern programmearea previously covered under contract with Fujitsu, assuming all therequirements are successfully delivered, is £546m”.
O’Briensaid that “discussions are continuing with BT with regard toimplementing CernerMillennium at some further sites in the southern programme for IT area”.BT is expected to receive an extra £100m for taking over three furthertrusts.
So, in addition to its £900m local service providercontract, BT may receive about £640m for work at fewer than 12 trusts.Typically a patient administration system at a single trust would coston, the open market, about £10m to £15m.
It’s also notable thatministers have signed a memorandum of understanding with BT weeks beforea general election. The MoU commits the next government to a reviseddeal with the supplier. This is in the knowledge that the Tories havestated that they wish to halt and review the local service providercontracts with BT and CSC.
It all goes to show that politics andIT can be a toxic mix.
PS: Ministers have increasedBT’s £620m 10-year contract to deliver and run the NPfIT “Spine” – a national database of health records – from £620m tomore than £1bn.