By Tony Collins
Conservative MP Richard Bacon wrote to the NHS Chief Executive Sir David Nicholson yesterday warning that a failure to disclose information to the Public Accounts Committee was a “very serious matter”.
Bacon, a long-standing member of the Public Accounts Committee, wrote to Nicholson about advance payments to CSC under the NHS National Programme for IT.
The MP is concerned that the Department of Health did not mention a £200m advance payment to CSC at a hearing of the Public Accounts Committee on the NPfIT detailed care records systems on 23 May 2011; and the payment wasn’t mentioned in the Department’s subsequent memo to the committee.
Said Bacon in his letter:
“I understand that the advance payment of £200m to CSC was made in April 2011 but the Department of Health’s memo of 7 June 2011 doesn’t mention it.
“The failure to disclose to the PAC an advance payment of £200m is a very serious matter. The fact that the payment appears to have happened after 31 March 2011 is scarcely the point.
“What is going on? …
CSC declared the £200m advance payment in regulatory announcement
CSC has told regulatory authorities in the US that on 1 April 2011, pursuant to the NPfIT contract, the “NHS made an advance payment to the Company of £200 million ($320 million) related to the forecasted charges expected by the Company during fiscal year 2012”.
The payment was reported by E-health Insider last month.
It appears that the Department decided to give the committee details of advance payments to CSC up until 31 March 2011. The undisclosed £200m payment to CSC was made the next day, 1 April.
As the Department of Health wrote to the committee on 7 June there is no clear reason for its choice of 31 March as the cut-off date for informing MPs of advance payments to CSC.
It would not be the first time the Department has withheld the latest information on the NPfIT from what it regards as outsiders, such as Parliament and the media.
When the National Audit Office was investigating the NPfIT several years ago it was not told of the latest Ipsos MORI survey on NHS perceptions of the National Programme.
The Department instead gave the NAO an older and more positive Ipsos MORI survey. The NAO confirmed to me it had not seen the latest survey [which had some negative findings on the NPfIT].
Today some in the Cabinet Office are exasperated at the disdain with which some officials at the Department of Health – not all – treat outside supervisory organisations such as the NAO, the Public Accounts Committee and the Cabinet Office.
It appears that some in the Department regard these organisations as necessary by-products of democracy that must be tolerated but not encouraged.
Major change is unlikely to happen in Whitehall or at least within the Department of Health and NHS Connecting for Health if officials are allowed, with ease, to dismiss their scrutineers with a wave of their hand.
The culture of allowing the DH to withhold the truth about the NPfIT needs tackling. All credit to Bacon and the Cabinet Office for trying to do just that. It’s likely that Katie Davis, the interim health CIO, will also seek to make the DH less introspective and defensive, at least in terms of the NPfIT and health informatics generally.
Bacon’s letter to Sir David Nicholson
This is Bacon’s letter dated 14 July2011 to Nicholson, copied to the head of the National Audit Office Amyas Morse, the chair of the Public Accounts Committee Margaret Hodge, and the Cabinet Office.
Dear Sir David
NATIONAL PROGRAMME FOR IT IN THE NATIONAL HEALTH SERVICE
I do not seem to have received a reply to my email of 27 June below.
Making advance payments of any kind at all is wholly at variance with the Department of Health’s long-stated boast that the NPfIT contracts “only pay for delivery”, but let us leave aside this basic point for the moment.
I understand that the advance payment of £200 million to CSC was made in April 2011 but the Department of Health’s memo of 7 June 2011 doesn’t mention it. The failure to disclose to the PAC an advanced payment of £200 million is a very serious matter. The fact that the payment appears to have happened after 31 March 2011 is scarcely the point.
What is going on? Please reply to my email below with its various questions without further delay.
Richard Bacon MP for South Norfolk, Member of the Public Accounts Committee
Bacon’s earlier letter to Nicholson, dated 27 June 2011
Dear Sir David
NATIONAL PROGRAMME FOR IT IN THE NATIONAL HEALTH SERVICE
I am writing following the hearing of the Public Accounts Committee on Monday 23 May 2011, to follow up on two important issues that were raised during your evidence:
1. ADVANCE PAYMENTS TO SUPPLIERS
In your supplementary memorandum to the PAC following the hearing you gave a total of advance payments made up to 31 March 2011, in respect of all contracts over the whole period of the Programme, of £2,532m of which suppliers have retained £1,328m. You also identified a further £119 million of advance payments to be earned or refunded. Since the memorandum was received by the PAC, it has been reported that the NHS made an advance payment of £200 million to CSC in April 2011. http://www.ehi.co.uk/news/acute-care/6971/nhs-made-£200m-april-advance-to-csc
I should be most grateful if you would let me know the answers to the following questions:
1. Is this report accurate?
2. Why was this payment was not reported to the PAC, either during the hearing or in the subsequent memorandum?
3. What was the justification for this payment and what value does it represent to the NHS?
4. What will happen in respect of this payment if a new memorandum of understanding is not in fact signed with CSC?
5. I would also be grateful if you would comment on the CSC filing with the US Security and Exchange Commission, which states that in the opinion of the company, if the NHS were to terminate the current contract “for convenience” it would owe fees totalling less than the $1 billion asset value CSC now has on its books for the contract. How is this consistent with the claim at the PAC hearing by Ms Connelly that the cost of terminating the CSC deal could “potentially leave us exposed to a higher cost than if we completed as it stands today”?
2. THE COST OF DEPLOYING CERNER MILLENNIUM AT NORTH BRISTOL
Second, I would be grateful if you could comment on the cost of deploying Cerner Millennium at North Bristol, reported in your memorandum as £21 million, including service for 56 months, and on the current expected go-live date. Specifically:
6. Can you explain why the delivery date agreed with BT at the contract “reset” was 4th June 2011?
7. Why it was then revised to 2nd July 2011?
8. And why it now appears that there is no agreed delivery date at all?
9. Can you also give your best comparison of the cost of deploying the Cerner Millennium system at North Bristol, with the cost to University Hospitals Bristol of deploying the System C Healthcare Medway system outside the National Programme? It would appear from media reports that this latter contract includes deployment of functionality including PAS, Accident and Emergency, maternity, theatres, clinical data collection, and a data warehouse and reporting system, as well as integration of third party and current Trust applications. According to the National Audit Office, the average cost for each new site under the BT South contract is £28.3 million, but the cost of the Medway system to UHB has been reported as £8.2 million over seven years. (http://www.guardian.co.uk/healthcare-network/2011/may/19/university-hospitals-bristol-foundation-trust-awards-e-patient-contract) What is the justification for this apparent difference?
10. As the Senior Responsible Owner for the National Programme, can you give your explicit undertaking that the North Bristol contract represents value for money for taxpayers?
I look forward to receiving your reply.
With many thanks