Health minister adds to uncertainty over implementation costs of the NHS IT plan

Health minister John Hutton faced tough questions on Radio 4 about the national plan after Computer Weekly obtained evidence that...

Interviewing health minister John Hutton last week about the national programme for IT in the NHS, Edward Stourton tried his best to get clear answers.

A presenter of BBC Radio 4’s Today programme, Stourton remained persistent and polite throughout. But the answers he received left trust IT executives deeply mystified about how they are supposed to fund millions of pounds’ worth of local implementations of new national systems.

Most of them would dearly have wanted to do what Stourton was doing: questioning Hutton, the minister responsible for the national programme.

Many IT managers support the programme. They are excited about being part of the world’s biggest civil IT scheme, one which they hope will greatly increase the chance of patients having successful treatments.

Already they have seen the programme achieve success in turning the attention of chief executives of trusts, as never before, to the importance of modernising and standardising the use of IT in the health service.

But two-and-a-half years into the programme, IT directors are still worried about how much it will cost in the long term to implement new national systems locally, and whether trusts will be able to afford the bill, especially as they have to continue to cover the costs of non-core IT systems.

The more sceptical among them have a suspicion that the Department of Health has embarked on the programme without any clear idea of how much it will cost over its 10-year life or whether there is certainty that the money will be found to fund it.

Some trust boards have already found that they have a large gap between the money they need to implement the national programme locally and the money now available.

Stuart Threlfall, director of ICT at King’s Lynn and Wisbech NHS Trust, has managed to reduce a funding gap of £1.2m to £498,000, but his board, which is in the red, has politely refused to fund the remaining sum.

The board said it wanted to convey its "enthusiasm for the implications/innovations implicit in the [national IT] programme" but "given the trust’s current financial position" it had "no funds to meet the shortfall."

It was on this matter of the programme’s costs that Stourton was interviewing Hutton early last Tuesday morning. The interview had been prompted by Computer Weekly’s disclosure that day that the actual cost of the programme could be £18.6bn to £31bn – three to five times the announced figure of £6.2bn.

The new figures were based on estimates in the national programme’s unpublished business case. The cost of procuring new national systems and services from large IT suppliers was the declared figure of £6.2bn.

But the larger figure was because of the costs of implementing the new services locally, including training hundreds of thousands of NHS staff in using the systems, paying for locums to replace staff who are training and upgrading the technical infrastructures of trusts.

Asked for his response to Computer Weekly’s disclosure, the minister told Stourton that the publication’s figures were speculative and that trusts would be able to pay for local implementations from the current trust "baseline" spend on IT of about £1bn a year.

This suggested that trusts need not find any more money to implement the national programme than they now spend on IT. But trusts IT executives know this is incorrect.

Hutton remained steadfast in his insistence that trusts would not need extra money from their existing IT budgets to implement the national programme.

The minister went on to explain that trusts will save money as a result of the programme’s centrally-negotiated contracts. He also said that the better care and treatment of patients could so improve the accuracy of medication and diagnoses that it would have an impact on budgets for paying compensation in cases of medical negligence.

But he did not appear to have been briefed on the fact that Computer Weekly’s figures are based on statements made by the national programme. It has confirmed that the total costs are expected to be three to five times the procurement costs of £6.2bn.

In a written statement, the national programme told Computer Weekly two weeks ago, "It is generally accepted in the IT industry that implementation costs are some three to five times the cost of procurements. That is reflected in the business case that was made for the national programme."

After Stourton's interview, NHS IT directors criticised Hutton’s claim that the local implementation of the national programme is going to cost the same as the health service is currently spending – about £1bn a year.

They pointed out that more than half of the IT budget is for staff, including computer and medical coding professionals, whose work helps to keep hospitals running.

In an open letter to the minister, Terry Walton, head of IT at Lewisham Hospital in South London, wrote, "In response to your comments on the Today programme on Tuesday morning, you may think that the NHS spends £1bn a year implementing systems and that this money can be diverted to implementing the national programme for IT, but I am afraid you have been badly briefed.

"Much of the £1bn you believe can be diverted is actually committed to running IT services which the national programme for IT, focused as it is on clinical systems, is not going to replace."

This was pointed out in another e-mail to Computer Weekly, which listed some of the important systems that the national programme will not replace. These included finance, payroll, manpower, staff rostering and other systems such as procurement and stock control of medical and surgical equipment, food and services.

In addition, the £1bn budget covers pharmaceutical systems and specialist equipment such as immunisation and cervical cytology recall.

After Hutton made his comments, the Department of Health issued statements to national newspapers that appeared to contradict the minister’s comments. These statements said that trusts would dedicate 4% of their total budgets to IT – which in some trusts would mean an increase of more than double the existing IT spend.

But it remains unclear how this official statement will translate into extra cash for trust IT directors. They are also entitled to wonder if the minister has been adequately briefed about the full cost implications of the national programme. Yet it will be ministers – not necessarily their officials – who will be responsible for obtaining more money from the Treasury for the national programme.

Since the programme was launched in early 2002, it has been beset by uncertainty, although few doctors, nurses or NHS staff would deny that its ultimate objectives, if achieved, would greatly benefit patients.

Hutton’s comments were intended to be reassuring, but they have not had this effect. At a time when trust IT directors want more than anything else to have direct answers to their direct questions, some have never been more uncertain about the future of the world’s biggest civil IT programme.

Systems that will not be replaced by the NPfIT

  • Finance
  • Payroll
  • Manpower
  • Staff rostering
  • Procurement (clinical, food and services)
  • Specialist equipment for immunisation programmes.

Open letter – the sums don’t add up

Dear minister,

In response to your comments on the Today programme on Tuesday morning, you may think that the NHS spends £1bn a year implementing systems and that this money can be diverted to implementing the national programme for IT, but I am afraid you have been badly briefed.

Much of the £1bn you believe can be diverted is actually committed to running IT services which the national programme for IT, focused as it is on clinical systems, is not going to replace.

It is true that where systems are replaced by the national plan, then once the replacements are working, trusts will be able to spend the money released from having to pay annual support charges on the implementation of the more advanced systems. This, however, depends on whether or not the promises about the trusts being able to retain the revenue are kept (a very big "if").

Even if the revenue is retained, it is much less than the £1bn a year you think is available, and an even longer way short of the money needed to introduce the more advanced clinical systems, which the majority of trusts do not have at the moment.

These will be very costly to implement and it will be a long time before the benefits really start to materialise. Moreover, the benefits from implementing these more advanced systems tend, in NHS parlance, to be "non-cash releasing".

You only have to look at the e-booking service to see what I mean. To implement this system, we are going to have to train all GPs and consultants to work in a new way, to set up and run registration authorities, to purchase and install card readers and software and to set up and run a telephone bureau to answer calls from patients.

This is in addition to the cost of running the IT part of the service. All of this is new. There may be savings downstream, which may pay back the investment, but it has to be paid for up front.

I am afraid the NHS is going to have to find a lot more money from somewhere to prime the pump and get these systems up and running successfully. Thinking that it will be possible to fund this from trusts’ current IT budgets is not realistic.

Terry Walton, head of IT,  Lewisham Hospital

John Hutton: "We think it is goin to cost the same"

Trusts highlight local challenge of IT plan

To hear the full interview, go to the audio archive for 12 October at Listen Again

Read more on IT legislation and regulation