The government will cut £600m from the total lifetime costs of the NHS's £12.7bn National Programme for IT, the Health Secretary announced today.
This will be achieved partly by re-negotiating aspects of contracts with BT and CSC. The two suppliers could lose their right to supply the National Care Records system exclusively in their areas. BT supplies London and CSC the rest of England except the south where trusts are already free to choose what to buy within an NHS Connecting for Health framework.
Speaking in the House of Commons, Andy Burnham, the Secretary of State for Health, said the National Care Records system "will be a matter for local choice".
He added: "We wanted to create a system where acute hospitals have the ability to have more choice and flexibility over their IT requirements within a national system."
This could make the future supply to the NHS of the iSoft "Lorenzo" system, supplied by CSC, and the Cerner "Millennium" system, supplied by BT, less certain than in the past.
Burnham strongly defended the NPfIT, said there were no intentions to cancel it and announced that the contracts with local service providers will be "pared back".
He was speaking at a debate on the NPfIT which was prompted by an urgent question by Andrew Lansley, the Shadow Secretary of State for Health.
The £600m savings promised by Burnham are much smaller than suggested by the comments of the Chancellor Alistair Darling, who told the BBC Andrew Marr programme on Sunday (6 December): "The NHS had a quite expensive IT system that, frankly, isn't essential to the frontline. It's something that I think we don't need to go ahead with just now."
Burnham said: "We are discussing with our suppliers potential reductions to the scope of the systems and the cost savings that could be generated. In addition we are looking seriously at the internal savings that could be made from the costs of running the programme.
"In the light of this work I can confirm to the House that we are working towards achieving a reduction of £600m in the lifetime cost of the programme. This means we will now pare back the programme to the core elements that have been identified as critical by clinicians."
Savings will be made by cutting back on proposed enhancements to GP systems. Hospital trusts will have choice of National Care Records Service systems and work will continue on replacing paper prescriptions with electronic ones.
But Burnham declined to give a direct answer to MP Richard Bacon who asked for an explanation of Darling's comments that the NPfIT is not essential to the frontline. Burham's comments suggested that the NPfIT is giving essential support to the frontline.
Burnham also declined to answer questions on whether the paring back of IT contracts would leave the taxpayers with a potential liability to BT and CSC. He said the contracts are commercially confidential.
He added that the contracts with the local service providers have not increased. However, Computer Weekly has established that the central contracts have increased in value beyond the £600 he is proposing to save.
Lansley told the Commons the scheme had been a disaster and had stifled innovation in hospitals. He put several questions to Burnham who did not answer them directly.
Conservative MP Richard Bacon, a member of the Public Accounts Committee who has followed the ups and downs of the NPfIT for several years, said the £600m of savings were much smaller than he expected. He said that much more could be cut.