Will CSC’s £3bn NHS IT contract be cancelled?

By Tony Collins

Several people have asked us whether the Cabinet Office’s Major Projects Authority will cancel  CSC’s NPfIT contract or whether draft memorandum of understanding between the Department of Health and the supplier will be finalised and signed.

The position is that a deal with CSC has not yet been agreed – and it’s not clear when it will be. Recommendations from the Cabinet Office’s Major Projects Authority have gone to David Cameron, according to yesterday’s Observer.

We’ve also been asked whether the The Major Projects Authority has any authority over CSC’s NPfIT contracts.

In January Downing Street  gave the Cabinet Office a mandate to “intervene” in projects that are poor value for money, have hit delays or are failing. If there’s a dispute between the Major Projects Authority and a department, the Cabinet Office can ask David Cameron for a decision.  So if the Major Projects Authority wants to cancel the CSC NPfIT contract it can – up to a point.

If the DH doesn’t agree, and it probably wouldn’t, it would be up to Cameron, who would probably back the Cabinet Office’s decision. It would then be the DH that dealt with the consequences.

The Major Projects Authority is under a clear-thinking Australian David Pitchford who is understands what goes wrong with big IT projects and why. He reports to Ian Watmore who also has a good understanding.

These are some of the reasons Pitchford gives for failing government IT-based projects:

1.Political pressure
2. No business case
3. No agreed budget
4. 80% of projects launched before 1,2 & 3 have been resolved
5. Sole solution approach
6. No timescale
7. No defined benefits

Most of these apply to the NPfIT.

One view about what should happen is that at least the part of the CSC contract that relates to acute hospitals should be cancelled, and the NHS should be under no further contractual obligation to buy from CSC – that was always an artificial device. CSC should be under no further obligation to deliver to the NHS.

CSC’s obligation has been a means of Whitehall, through CSC, maintaining some control over trusts and justifying a large central team. End that obligation and you don’t need a large central team. Last week’s Public Accounts Committee report on the NPfIT detailed care records systems said that NHS CfH has 1,300 people.

Whatever happens CSC will maintain a strong  presence in the NHS, at least through its purchase of iSoft. Many trusts with iSoft systems are likely to replace them with iSoft – CSC – products. Patient administration systems are huge investments and changing them can be risky.

EC procurement rules mean that trusts will need to go open tender when their existing contracts expire but some will find ways of awarding new contracts to existing suppliers, if that’s their wish.

So CSC’s future in the NHS is assured, whatever happens with its NPfIT contracts.

2 responses to “Will CSC’s £3bn NHS IT contract be cancelled?

  1. Tony Collins

    All valid points. The difference now is that the knowledge of what goes wrong and why is understood within government by someone who can do something about it: David Pitchford. It’s not ideal to be relying on someone who may be promoted or leave at any time but maybe what he knows will rub off on others. During the last administration there were, as you say, many reports and articles on what went wrong. But ministers didn’t care for reports and articles. They listened to the big suppliers. It all sounded easy; and technology held the promise of making a difference. It gave ministers what they craved: to be immortalised by their enduring legacies. So with, say, the NPfIT, ministers agreed to build the IT equivalent of an ocean bridge from the UK to America. Great idea. Shame it was always impossible, Now with Pitchford there is a realist in a position of influence. We’ll see how much influence in the outcome of the proposed DH deal with CSC.


  2. So they’ve brought i n a hiigh-powered Australian who identifed those factors? Phew, I’d been wondering what the problems were.

    Didn’t anybody realise? Let’s take a look…

    In late 1999 early 2000 the so called McCartney report into why IT failed was published leading to the creation of the OGC and the Gateway Review.


    The Australians wre talking about it back then


    I’ll quote just one bit from the amusing little piece

    “After massive computer failures in a new Social Security system installed by Andersen Consulting, for example, some 400,000 people received compensation payments of £10 ($26) each – a National Audit Office investigation had reportedly found no fewer than 1900 separate failures.”

    Who was involved with that project, I forget, Ian… somebody?

    YOU were a bit sniffy about recommendations …


    And.. as YOU said in 2007 – they recommendations had become “a tick box exercise”


    Then there’s the PAC in 2007

    Click to access 113.pdf

    Prior to that, in 2002 The Economist was assured it will all be different

    In 2003 POST published a study http://www.parliament.uk/documents/post/pr200.pdf

    In 2005 Micheal Cross wrote about it all in PROSPECT magaine
    http://www.michaelcrossjournalist.net/USERIMAGES/Prospect 2005.pdf

    funnily enough quoting the Dunleavy et al study about procurement which somehow continues to slip under the radar as we said here


    but luckily we know now.


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