Trusts face funding gap between roll-out costs and eventual savings

Trusts have to find funds upfront for systems from the national plan, but will have to wait years before any major savings are...

Trusts have to find funds upfront for systems from the national plan, but will have to wait years before any major savings are realised.

MPs, trust boards and their IT executives have expressed concerns about whether the total estimated costs of the NHS' technology-led modernisation plan are affordable.

Computer Weekly has learned that the total cost could be between £18.6bn and £31bn. The announced cost of the NHS' national programme for IT (NPfIT) is £6.2bn, much of which will be spent on centrally funded services, but that leaves between £12bn and £24bn, a large part of which might be spent locally.

The money is likely to be needed for hiring expert change and project managers, for training hundreds of thousands of health professionals to use the systems, for locums to cover during training and for local networking and other equipment.

In 2002, when the government set out details of the national programme in its strategy document Delivering 21st century IT support for the NHS, it said the procurement approach at local level would be "characterised by call-off of centrally funded, compliant systems from a limited choice".

But trusts soon realised that large parts of the programme would have to be funded from local trust and hospital budgets.

The government wants trusts to fund part of the cost of local implementations from the savings they achieve through replacing ageing technologies with cheaper systems under centrally negotiated contracts.

But some trust IT executives are telling their boards that a large portion of the savings, although achievable, cannot be realised until after the systems are fully implemented.

Jean Roberts, who leads the policy task force of the British Computer Society's Health Informatics Committee, said the funding for local implementations is needed before money is freed up by savings.

"The [£18bn] is a very big number," said Roberts. "A lot of that is front-loaded, which is a worry. Trusts will have to find the money before the benefits are realised. It could delay other plans [of trusts] or ultimately have an effect on money for direct patient care."

When Computer Weekly asked the NPfIT whether savings from the project will at least total the £18bn-plus implementation costs, the spokesperson said, "Significant financial benefits will accrue, but in addition, the national programme will support NHS modernisation. Hence the benefits will be seen in improvements to NHS services and therefore improved patient care and safety."

MPs ask who's footing the bill for the national programme   

Vince Cable, Liberal Democrat shadow chancellor, said, "The government faces its biggest test in IT on this project. Local trusts will be forced to make very difficult decisions to support the national programme with local funding. This could mean cuts in other frontline services if the project is to be delivered. The future success of the NHS depends on this project. The government cannot afford to get this wrong." 

Richard Bacon, Tory member of the Commons Public Accounts Committee, said, "Most hospital trusts are very stretched. I would like to know where all the money is coming from to pay for this project.   "This is huge money and raises some very serious questions. If trusts are not given the money to pay for the national programme, how on earth are they going fund it?   "If trusts can't get buy-in from their clinicians, why would they even want to fund it? Will this mean patients waiting even longer for treatment while billions of pounds are spent on unproven systems?"

IT project savings are not guaranteed     

The experience of computerising welfare benefits in the 1980s revealed that promised savings from huge IT projects do not always materialise.  

Government watchdog the National Audit Office reported in 1989 that the welfare computerisation - called the Operational Strategy - was due to save £915m. This estimate was later cut by 55% and even the remaining savings were questioned by MPs who found that some benefits had been double-counted and costs not included.

Some trusts already face shortfall >>

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