Better grasp of costs may have held up NHS plan

Ministers initiated the world's biggest civil IT programme on the basis that the total costs over its “whole life” would be only...

Ministers initiated the world's biggest civil IT programme on the basis that the total costs over its “whole life” would be only £5bn – although officials later confirmed the figure would be much higher once the costs of local implementation were added.

It is unclear whether the IT-led modernisation of the NHS would have been approved by the Treasury if its full projected costs – between £18bn up to £31bn over 10 years – had been stated at the time the plan was initiated.

The figure of £5bn is revealed in an appendix to Delivering 21st Century IT Support for the NHS, a document which formed part of the official launch of the NHS’ national computerisation programme in June 2002.

The document states that the “total (whole life) project costs” are £5bn. It is dated 16 March 2002 – less than a month after a meeting at Downing Street, chaired by Tony Blair, at which the NHS IT programme was initiated. There is no sum in the document’s Project Profile Model for the costs of local implementation. It appears that Downing Street approved the national programme on the basis of the £5bn figure only.

Since then, the Department of Health has awarded contracts for the national programme worth £6.2bn, and it has confirmed that the total cost of the project will be far more than these procurement costs.

“It is generally accepted in the IT industry that implementation costs are three to five times the cost of procurements. That is reflected in the business case that was made for the national programme,” the national programme said in a statement to Computer Weekly last year.

Did Blair approve the NHS scheem without knowing the full costs?

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