NHS urged to 'turn off life support' for £3bn CSC contract

The NHS should tear up CSC’s highly troubled £3.1 billion contract, analysts and a prominent MP on the Public Accounts Committee have said.

CSC has delivered patient record systems in three acute hospital settings in nine years under the National Programme for IT, prompting calls for it to be fired. The company insists it has set the “foundations” for the future.

Last week, NHS chief information officer Christine Connelly stated it could cost more to cancel CSC’s deal than to complete the next five years’ worth of contracted work. Analysts branded the claim as "rubbish".

Speaking to Computerworld UK, Richard Bacon, a prominent MP and IT expert on the Public Accounts Committee, said CSC’s contract should be abandoned, and that the company “should not be rewarded for failure”.

Bacon reacted with disbelief to the suggestion that it would cost more to cancel the contract than complete it.

“I find that idea incredible, staggering,” he said. “CSC has failed for so many years to do what it says, it’s just a history of broken promises.”

The NHS comments could be a “negotiating ploy” to strengthen the department’s arguments around the continuation of the programme, Bacon said.

He added: “If it’s actually true that it would cost more to cancel, then it’s a scandal. It would be an enormous indictment of [NHS chief executive] David Nicholson as the project’s Senior Responsible Owner, and of all of Connecting for Health which allowed such a deal to be signed.

“If it’s the truth, then those officials should be dismissed.”

Last week it emerged that that CSC had proposed doubling the cost of deployments in an apparent bid to improve revenue prospects as the project’s scope is dramatically reduced.

“So instead of coming good, CSC want more money, as some kind of reward for their failure,” Bacon said. “If the Department of Health had any sense, they would blow a large raspberry at that offer.”

Analysts agreed that it was time to take action.

Anthony Miller, a veteran analyst and managing partner at TechMarketView, described the NHS assertions as “complete and utter rubbish”.

“Has the government no idea about the concept of ‘cutting your losses’?” he said.

“It should be clear to everyone involved that CSC’s NHS IT programme has deteriorated from ‘walking wounded’ to ‘do not resuscitate’. The sooner life support is removed, the better for all concerned.”

IDC analysts said it was hard in practice to ascertain the exact costs of cancelling CSC’s contract.

Silvia Piai, senior research analyst, cited a “lack of transparency” around the contracts, which meant the real figures on cancellation charges were not available publicly. The transparency issue led to heated debate in a PAC hearing last week.

“The contract needs a real makeover,” considering the efficiency savings being imposed on the NHS, she said. CSC has already proposed a more modular approach, but Piai said this would only work “if it were accompanied by a modular payment model”.

In the early stages of the National Programme for IT, under combative former programme director Richard Granger, it was established that suppliers would only be paid when hospitals sign off successful system deployments, IDC research manager Douglas Hayward noted.

While “some argue that Granger went too far in pushing risk back onto suppliers”, Hayward said, “if the NHS allows the pendulum to swing too far back towards accommodating the demands of providers, the result will be bad for taxpayers and patients alike”.

At last week’s PAC hearing, CSC UK healthcare president Sheri Thureen was asked to explain whether patient records would be successfully rolled out to the North, Midlands and East of England, where it has contracts. She said that she believed the “foundations” were in place.

“So we’re paying for foundations? This £11 billion programme is for foundations, a sort of first step to get us off the mark is it?” replied a visibly angry Richard Bacon.

CSC and the Department of Health had not commented further at the time of writing. The prime minister has warned CSC that its deal may be cancelled, as a whole or in part, according to the results of ongoing parliamentary reviews.

Copyright © 2011 IDG Communications, Inc.

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