£4.3bn of NHS IT contracts reviewed as MPs accuse Department of Health of 'deliberate concealment'

The remaining £4.3bn earmarked to spend on the troubled NHS National Programme for IT contracts is to be reviewed by the Cabinet Office after a highly critical report by MPs..

The remaining £4.3bn earmarked to spend on the troubled NHS National Programme for IT contracts is to be reviewed by the Cabinet Office's Major Projects Authority (MPA), after MPs said the contracts do not provide value for money.

The Public Accounts Committee (PAC) has released a report criticising the progress of the care records system, the central part of the National Programme, and in particular the relationship with key supplier CSC.

Margaret Hodge MP, chair of the PAC, said: "We consider it essential that the government's Major Projects Authority now closely scrutinises the department's continuing negotiations with CSC, which has so far delivered very few of the systems it was contracted to supply."

Hodge hit out against the department's failure to inform the PAC about its advance payment of £200m to CSC in April. "We are surprised that, after our hearing, in a memorandum to us of 7 June 2011 which specifically mentioned advance payments, the department made no mention of a £200m advance payment to CSC in April 2011. This is unacceptable," she said.

Speaking to Computer Weekly, Richard Bacon MP, a member of the PAC, said: "This was an act of deliberate concealment. Could it be that given the department's philosophy that it only pays for results, this advanced payment was highly embarrassing?

"The only good thing from this whole fiasco is that the Cabinet Office is now involved, as the Department of Health clearly cannot be trusted."

MPs heard in May that cancelling contracts with CSC could be more costly than completing them. But Bacon said the question of whether it would cost more to cancel the contract than to keep going is moot. "The Department of Health wanted us to believe it would cost more to cancel. But in a filing to the SEC in the United States, CSC stated that it might actually get materially less than the value of the contract."

Bacon also expressed concerns over CSC's recent acquisition of iSoft. "I strongly hope CSC will not be allowed to supply products other than those they are contractually obliged to. CSC must be forced to compete for new business. It is important that CSC will not be rewarded for its failure and obtain a monopoly," he said.

The report said that the Department of Health (DoH) has been unable to demonstrate what benefits have been delivered from the £2.7bn spent on the project so far, with an updated statement now expected in September.

The department came under fire for not providing timely and reliable information to the committee. "Information provided has frequently been late, has contained inconsistencies and has contradicted other evidence. This has hampered our ability to scrutinise the Programme on behalf of Parliament," said the report.

The committee also criticised the DoH for not explaining the impact of health reforms on the management and governance of the care records system. "It needs to make clear how the programme will be managed in future given the fundamental NHS restructuring that is expected over coming years," it said.

The report follows information uncovered by Computer Weekly that Oxfordshire and Buckinghamshire Mental Health Trust was prevented from implementing its own electronic patient record system due to terms in the National Programme contract. The trust was faced with a fine of £8.8m to choose other software, despite a small supplier already delivering a system at a fraction of the cost.

No care records system has yet been delivered to a mental health trust in the North, Midlands and East of England under the National Programme. The BT-supplied RiO care records system has been provided to all 37 trusts in London and 23 trusts in the South of England.

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