NHS still set to spend £600m with 'rotten' CSC on 'hopeless' NPfIT systems

The NHS is still set to spend nearly £600 million on Lorenzo patient record systems provided by CSC, despite the failure of the government’s National Programme for IT (NPfIT).

Senior executives from the NHS were grilled today by the parliamentary Public Accounts Committee, where chair Margaret Hodge called CSC a “rotten company” and said the Lorenzo system was “hopeless”.

She and other members of the committee expressed disbelief at the mismanagement of the CSC contract by the NHS, where it is still dishing out hundreds of millions of pounds to the company despite it having failed to deliver on a number of key targets over a ten year period.

Hodge said that when the NHS declared that the NPfIT had been cancelled in 2010, this was nothing more than a “PR exercise”, as taxpayers are still spending money on purchasing CSC’s systems.

So far the government has spent £1.1 billion on the CSC part of NPfIT, but this is set to increase to £2.2 billion over the lifetime of the contract. As such, taxpayers are still to dish out over £1 billion for the failed CSC project.

Some £600 million of this additional anticipated spend is to go on CSC's "hopeless" Lorenzo systems, thanks to the renegotiated deal the NHS struck with the supplier last August. The rest is set to go on a system that has been subcontracted out by CSC.

Tim Donohoe, Senior Responsible Officer for Local Service Provider Programmes (LSPs), insisted that the NHS had “got a good deal for the taxpayer”.

The £600 million is being given to up to 22 NHS Trusts that may choose to implement CSC’s Lorenzo system. Although this number has decreased from over 160 Trusts, thanks to the renegotiated deal, and although the Trusts are free to choose other system providers if they wish – they will only receive central funding from the NHS if they opt for CSC.

Donohoe said: “We are not forcing Trusts to take the software”.

Astonishingly, the NHS also had to pay CSC £100 million to renegotiate the original deal – despite it having not achieved many of its previous objectives and failed to implement systems across the NHS. On top of this the government also paid CSC £10 million for changes to the software, which it has requested.

Sir David Nicholson, Chief Executive for the NHS in England, told the committee that he had worked with the Cabinet Office, the Major Projects Authority and the Treasury on the deal and had been advised that it was the best outcome the NHS could achieve.

Donohoe said that the NHS couldn’t pull out of the contract all together on the basis of a breach – despite not fulfilling its terms – because it could have claimed things about how the NHS conducted itself and it was agreed that it was “not worth the risk of getting into further legal disputes”.

The NHS has also paid CSC £2.9 million in legal fees since negotiations began, according to the executives.

Margaret Hodge was particularly astounded that under the new agreement with CSC, the NHS has agreed to effectively give it a £100 million bonus if it now achieves some new ‘key milestones’.

When asked by a member of the committee whether or not he thought it was possible for the NHS to procure a project of this size to all providers across the country, Sir David Nicholson said: “This idea of ruthless standardisation has proved illusionary … the idea of managing change of that nature, from the top, centrally, simply is not possible.”

Copyright © 2013 IDG Communications, Inc.

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