Trust CEO warns over possible NPfIT compensation claim

Andrew Way, the Chief Executive of the Royal Free Hampstead NHS Trust, has warned that any claim for compensation because of problems at his trust after the implementation of a system under the National Programme for IT [NPfIT] may not succeed.  

He is the Senior Responsible Owner of the Cerner project at his trust. The NHS’s Chief Executive, David Nicholson, has made every trust chief executive a senior responsible owner for their local implementations under the NHS’s £12.7bn National Programme for IT [NPfIT]. The pay of chief executives is determined, in part, by their meeting obligations which include commitments to the NPfIT.

The latest Royal Free board papers – dated 28 August 2008 – show that Way has addressed his directors on the matter of compensation. In June, the Royal Free became the first trust in London to implement the “LC1” version of the Cerner Millennium Care Records Service, which part of the NPfIT.

Way pointed out that the NPfIT contract in London is between the Secretary of State for Health and BT, not between the trust and BT. Officials at the Department of Health consider that the NHS is more to blame over a failure to deliver than BT.

The board paper says:

“With regards to compensation, Mr Way reminded members that the contract was with the Secretary of State and that currently it was considered the NHS as a whole was failing to deliver more substantially than BT.”

This may be a reference to the cautious approach of NHS trusts which have been reluctant to deploy NPfIT systems which they do not consider are yet fit for purpose  – although the government has contractually committed the NHS to placing a minimum amount of business with BT and CSC, the two remaining local service providers.

The NHS’s reluctance to deploy NPfIT has placed the Secretary of State for Health in breach of contract with the local service providers. But BT and CSC are well behind in their promises to deliver a fit-for-purpose Care Records Service. As both sides are at fault, it’s unclear whether one party would have a strong case against the other if a dispute came to court.


Any claim for compensation by a trust to the office of the Secretary of State is likely to be rejected. Whitehall officials, on behalf of BT, are likely to argue that the health service is more at fault by not meeting contractual promises to place a certain volume of business through the supplier.

In practice the government and NHS Connecting for Health are likely to join hands with the supplier in any threatened dispute over compensation. The Government and NHS Connecting for Health want to use the penalties faced by the NHS in the contracts to put pressure on trusts to go live more quickly with NPfIT systems.

It’s an uneven boxing match. In one corner there’s a powerful crowd of people who represent the pioneering spirit of the government, NHS Connecting for Health and the local service providers. In the opposite corner are the directors of NHS trusts – though by no means all – who are understandably cautious about disrupting the care and treatment of patients by unleashing on their staff systems that are not yet ready to be deployed.


Senior Responsible Owner – a good idea subverted – IT Projects Blog

London trust considers compensation claims after Cerner problems – Computer Weekly

London trust may claim after NPfIT problems – IT Projects Blog

London trusts plot legal action over new IT system – The Guardian, 1 September 2008

NPfIT one-size-fits-fall is a fundamental flaw – Trust Chief Executive  – 2006