NHS IT project delays hurt BT and CSC

NHS IT suppliers have been paid so far only 40 per cent of projected amounts on the £12.7 billion National Programme for IT.

The news emerged as the NHS suppliers said they were confident they were successfully rolling out the first workable patient systems this month, in time for a deadline imposed earlier this year by the programme’s new chiefs.

The government yesterday said it will cost £6.4 million per hospital, across most of England, to simply implement the systems.

Suppliers have been paid only £2.7 billion under their contracts so far, out of an originally projected £6.7 billion, on a programme that was originally due for completion by next year.

The reason for the payments being lower than original projections is that suppliers are only paid on delivery, and delivery has been delayed after a number of problematic rollouts.

The government’s spending auditors said last year that the programme will run until at least 2014 to 2015.

As of 31 March, CSC, supplier to the North, East and Midlands, had been paid £784 million out of its £3 billion contract, according to figures released by health secretary Mike O’Brien. Last week it switched on the first full instance of the iSoft Lorenzo patient software in NHS Bury.

BT, whose Global Services devision has been hit hard financially by work on the programme, has been paid £326 million for rolllouts in London, compared to an original expectation of £1 billion. It expects to go live with the equivalent Cerner Millennium patient system in the next three weeks at NHS Kingston.

Both suppliers are under pressure to make sure the system in those two trusts satisfies the NHS when it conducts a review at the end of the month. Failure by either could result in contract termination.

In the south of England, previously covered by Fujitsu, until it pulled out in Spring 2008, some £326 million has been spent, compared to the £1.1 billion predicted. BT now runs a number of trusts in the south, but others are still looking for a new contractor.

Tola Sargeant, research director at analyst house TechMarketView, told Computerworld UK that she was “not surprised” the figures are so far below original predictions, after the delayed rollouts.

Whilst it was “good news for taxpayers” in the short term, she said, it also demonstrated delayed delivery. The figures were “not good” for suppliers BT and CSC, she noted, adding that they would have to deliver the systems “in earnest”. They showed “just how important it is for the two remaining LSPs to meet the crucial deadlines set by the NHS and ramp up deployment in 2010”, she said.

Other parts of the programme, not involving deployment of the patient administration systems, are more close to financial expectations.

For the ‘spine’, which is the central network bearing the patient data, contractor BT has been paid £791 million, which is the majority of the contracted £889 million, indicating more timely deplooyment in this area.

The NHS’ Choose and Book appointments system, delivered by Atos Origin, has cost £133 million, out of a predicted £144 million, and the completed N3 broadband network, delivered by BT, cost its predicted £554 million.

A spokesperson at the Department for Health said the government will “consider” producing an annual report of NHS IT progress against timetables and expenditure forecasts, in response to demands from the Commitee of Public Accounts. An annual report may be combined with updates on benefits delivered, it said, but there are no definite plans.

Earlier this year, the NHS said that if it is not satisfied that BT and CSC have delivered workable patient systems by the end of this month, it will reconsider how to deliver the programme or even cancel supplier contracts. Both CSC and BT have said they are confident the NHS will be satisfied with them in its review.

But there are also suggestions by industry observers that the late delivery, and under-expenditure so far, could present a ‘get-out’ for Whitehall. Sargeant at TechMarketView issued a stark warning that a “cash-strapped government” could be tempted “to try to claw back some of the funding by BT+and+CSC+bear+the+cost+of+delays+to+NHS+IT+deals” target=”_blank”>curtailing the programme”.