Leaked paper reveals lack of funds for NHS IT plan

The National Health Service in London has an 'affordability gap' of £345m

Tony Blair's plans for an £1.1bn IT-led reform of London's health service must meet a series of "critical" challenges before contracts are awarded, although deals were due to be signed yesterday (24 November), according to a leaked NHS document.

The paper, which set out a formal business case for an Integrated Care Records Service in London under the £2.3bn national programme for IT, revealed that uncertainties existed over the full cost of its implementation.

It referred to an "affordability gap", with anticipated spending on IT reforms exceeding funding by £345m until 2009. The paper also revealed that the national programme will not cover the funding of system implementations in hospital trusts, change management, some training, data migration or local infrastructure.

Nor will the programme meet more than 25% of the costs of replacing systems to meet new national requirements - 75% will have to be locally funded.

The paper highlighted a "national versus local funding issue" which has led to the need to "prioritise local functionality in accordance with the availability of funds".

It also disclosed that the national programme may be under pressure to award bidders more than one contract. If a bidder wins more than one deal, extra discounts can be negotiated to help bridge the affordability gap, the paper said.

It added that the gap may also be bridged by obtaining improved prices from suppliers when they submit best and final offers and, possibly, "increased contribution from local funds".

Information managers in trusts who were shown a copy of the paper by Computer Weekly said they were surprised the Department of Health was pressing ahead with contracting out services and systems in London while such uncertainties existed.

They said they did not know how their trusts would pay for implementations and costs such as replacing clinicians while training takes place on new systems.

Contracts with firms that will supply new systems and help provide the Integrated Care Records Service were due to be signed on 24 November, according to the paper. The Treasury was due to approve the business case for the London element of the national programme on 21 November.

The national programme comprises four main elements: online appointment booking, national IT infrastructure, Integrated Care Records Service and electronic prescriptions. The programme has central funding of £2.3bn until 2006.

The plan is to appoint a local service provider in each of five "clusters" across England. Officials who represent the London cluster wrote the leaked paper.

It disclosed that the health service in London initially plans to proceed with those projects that are paid for centrally and which will require no additional local funding. This will allow for local interfaces to national systems, including the Integrated Care Records Service and an online service for booking hospital appointments.

In theory, this will enable officials to deliver Tony Blair's aim of setting up a system of electronic patient records by 2005, but trusts say that standardised IT will be of little use to clinicians without comprehensive implementations along with data migration and other critical elements for which funding is uncertain.

A Gateway Review of the London plans by the Office of Government Commerce gave the programme an "amber" warning, according to the leaked paper.

The Gateway Reviews in general were introduced in 2001 and gave IT projects a green, amber or red light at each of six stages. Recommendations are made to departments which have the power to implement or reject the project. The London plans have reached stage three, which examines whether the plans are sound enough for contracts to be signed.

"We are pursuing all Gateway recommendations deemed 'critical before award of contract', including those for governance and resources," said the leaked paper.

Health officials will be pleased the programme did not get a red light, but an amber light is not a guarantee of success. The OGC gave Inland Revenue plans for IT systems to support new tax credits a green light. Last week, public spending watchdog the National Audit Office published a report which strongly criticised the way the systems were introduced.

The Department of Health aims to exploit IT to provide patients with access to their own records by 2005 and by 2007 eliminate lost results of clinical investigations.

A spokesman for the national programme said, "As with any public sector procurement, when the national programme for IT awards its contracts, negotiations will have been completed, issues resolved and relevant approvals secured."

Leaked problems

The leaked paper revealed "certain problems" had developed in the national plan for IT in London. At a late stage in the procurement it was realised that a planning review was needed to:
  • Update information on current systems

  • Identify current costs and contract issues

  • Determine dependencies between systems.

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