14 de octubre de 2004
It’s been a bad couple of weeks for anyone involved in the NPfIT, especially so for those of us involved from the consulting side. A political scare over potential major budget overruns on the project has landed the Labour government in hot water - and will undoubtedly result in even greater scrutiny of every step taken by the consultancies fulfilling the programme objectives.
Even before this scare an initial payment had been withheld from consultants for a failure to hit performance targets; £300,000 – or one third of a £900,000 initial payment due to BT – was withheld following technical problems at the testing stages of the data spine element of the programme.
As if this wasn’t bad enough, hanging over the whole programme is the realisation that the consultancies involved have their work severely cut out simply recruiting and retaining the consulting workforce needed to see the programme through to completion.
So what went wrong?
The programme to modernise the NHS computer systems - the National Programme for IT (NPfIT) – looked like a gold-mine for consultancies to exploit when initial budgets were earmarked for the project in 2002.
The audacious programme sought to ensure that by 2010 a single NHS IT system would hold all English medical records on one giant database, linking hundreds of hospitals and thousands of GPs' surgeries and enabling them to access a common set of patient records.
Initially £2.3bn was earmarked in the 2002 Spending Review for expenditure on the National Programme during the first 3 years of the programme. Ultimately some £6.2bn of contracts were put in place covering procurement, development and delivery of the NPfIT core systems over the ten year lifetime of the project.
There was a political furore this week when comments from the Department of Health led newspapers to speculate that the total cost of the NPfIT programme might top £30bn.
A spokesperson from the Department of Health conceded that the implementation costs of IT projects could amount to 3-5 times the initial procurement costs, which prompted the newspaper speculation about a £30bn+ total bill. Health minister, John Hutton, today dismissed these figures as 'speculation'.
The Department of Health was forced to go on the record too and has stated "We have never suggested that the cost of the programme would be limited to those contract costs alone. The central expenditure of £6.2 billion will be complemented, and was always intended to be complemented by local baseline IT spending - already around £1bn a year in the NHS as a whole and which will be available to support local implementation of the national programme."
Whatever the correct figure, there is no doubting the heavy media coverage of the last days will intensify pressure on the government to extract maximum value from the service providers and to enforce penalty clauses wherever possible.
The irony of this drive for value is that the programme is less likely to be successfully implemented as a direct consequence. Backtracking a year, Richard Granger succeeded in his efforts to drive the consulting firms’ bids down to a level where the contracts are low-margin, high volume affairs. The low margins on the contracts – which will be exacerbated by any penalties invoked. – are proving to be simply too low to allow consultancies to pay to attract the talent they need to make the contracts a success.
This is a pressing issue for consultancies because they didn’t have the staff in place to fulfil the contracts at the time that they were won – but they are now restricted by both the availability of talent and the sums they can afford to pay for this talent. If further penalties are invoked, this will descend into a downwards spiral that risks seeing the NPfIT turn into yet another White Elephant government project that sinks £billions of taxpayers money for only questionable returns. Expect this to become an Election issue and remain in the headlines for many months to come.