Suppliers 'fine' NHS over IT plan delivery

Penalties paid over failures to meet staff transfer obligations

Some managers in the health service are struggling to meet contractual commitments to multinational suppliers of the National Programme for IT (NPfIT) – and their organisations are being fined for failing to meet obligations.

There is also evidence that the NHS’s contractual obligations to IT suppliers, which were negotiated and agreed centrally without being agreed by trusts, are resented by some local managers.

The disclosures reinforce the case for extended inquiry into the programme by the House of Commons Health Committee.

Last week health minister Caroline Flint explicitly rejected a call for the government to commission an independent audit of the NPfIT.

“We remain confident that the technical architecture of the national programme is appropriate and will enable benefits to be delivered for patients, and value for money for the taxpayer, without further independent scrutiny,” she said.

But in the South of England, the NHS has been unable to meet a contractual obligation to place the equivalent of about 50 employees with Japanese-owned Fujitsu, and it is to pay £19m to the supplier to be released from the requirement.

This means Fujitsu will receive compensation to the equivalent of about £380,000 per NHS employee – but the supplier could have potentially fined the NHS up to £1.4m per employee over the 10-year life of the contract if it failed to meet the contractual obligation.

The £19m to be paid to Fujitsu will come from hard-pressed NHS budgets. 

In the North West and West Midlands cluster, the NHS has a contractual obligation to place about 50 full-time equivalent staff with US company CSC, and papers to the boards of trusts show that managers are struggling to make up the numbers. They face penalties from CSC of up to £6.9m a year, a total fine over the 10-year life of the contract of about £70m. The potential penalty is reduced for each NHS employee placed with the supplier.

The cluster has investigated paying CSC to buy out the obligation but no deal has yet been done. The obligation is known as the Supplier Attachment Scheme, also referred to as Managed Authority Employees.

As a result of the scheme, at least one strategic health authority has “fined” another NHS body after it failed to deliver the required number of staff to a private IT supplier.

The minutes of an IT programme board of South Warwickshire Local Health Community meeting said the local Strategic Health Authority was “determined to apply the full contractual penalty under Connecting for Health to those Local Health Communities which have not seconded appropriate resource” to the Supplier Attachment Scheme.

But Teresa French, acting chief executive of South Warwickshire Primary Care Trust, said that penalties should work both ways and there should be compensation paid to local health communities over delays in providing software. She asked for this suggestion to be raised formally in a letter the local strategic health authority.

The obligation for the NHS to provide 200 staff or man-day equivalents during the life of the contracts of the contracts to local service providers was made centrally without the agreement of all trust IT managers.

Details of the payments to Fujitsu came to light after MP Richard Bacon, a member of the House of Commons Public Accounts Committee, asked a series of parliamentary questions.

Connecting for Health, which runs the NPfIT, declined to answer a range of further questions on the Supplier Attachment Scheme put by Computer Weekly last month.

The scheme covers four of the five NPfIT regions with BT, London’s supplier, not a party to it.

The suppliers want higher-grade technical and support staff, but these skills are also in high demand in the NHS, and managers cannot force employees to work for the local suppliers.

A particular problem for the NHS is that, under the scheme, its staff would continue earning only their health service salaries but would work alongside employees in the private companies who may be earning at least twice as much doing similar jobs.

It has also emerged that the NHS has failed to meet its commitments to place minimum orders with local service providers.

Health minister Liam Byrne said, “The minimum revenue commitments are spread across the 10-year term of the contracts, and, in the third year of a 10-year programme, have inevitably not yet been met.”

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