BT earns £1.3bn extra from “dismantled” NHS IT scheme

By Tony Collins

The Department of Health paid BT £1.3bn more from the “dismantled” NHS IT contracts than the company first expected.

In 2004 BT expected £2.1bn from its contracts under the NHS IT scheme, the National Programme for IT. In fact BT’s payments totalled  £3.4bn to March 2013, according to information contained in a DH letter to the Public Accounts Committee.  The DH’s letter has gone unpublicised until now.

The size of the payments to BT, in the light of financial pressures elsewhere in the NHS, indicate that Connecting for Health, and its successor the Health and Social Care Information Centre,  regard BT’s data spine, the N3 broadband network,  and Cerner and Rio patient administration systems as indispensable.

The Public Accounts Committee has described the NHS IT scheme, the NPfIT,  as a “failed” programme.

Though important parts of BT’s work on the scheme have been successful, a national care records service in which an individual’s electronic patient record can be accessed across  the NHS, hasn’t materialised.

A cut-down version, the Summary Care Record, exists but the NHS and MPs regarded the creation of a detailed national electronic patient record as the main reason for the National Programme for IT.

Despite the extra money  is delivering far fewer Cerner Millennium systems to London’s acute trusts than originally intended, and none of the GP systems.

Payments to BT

After BT won three NPfIT contracts in 2003, the company said in its annual report of 2004 that the deals would be worth a total of £2.1 billion. The NHS deals were among “some of the largest BT has ever won”, said BT’s  2004 annual report. 

Now the DH’s letter to the Public Accounts Committee shows the amounts paid under NPfIT contracts to March 2013: 

  • N3 broadband network  – £937.7 m [BT]. Original contract value £533m.
  • Spine (including Secondary Uses Service)   £1.083.8m [BT]. Original contract value £620m.
  • Core contracts for local clinical systems in London (London Programme for IT, formerly part of the NPfIT ) –  £865.9m [BT]. Original contract value £996m. BT is delivering to far fewer trusts than it originally envisaged.
  •  Core contracts for the south of England – £586.3m. [BT]. No payments were due to BT for the south of England in the original contracts. BT replaced Fujitsu as the local service provider in the south. The DH spent a total of 737.3m on NPfIT contracts in the south of England to March 2013 but of this £151m had been paid to Fujitsu. The Fujitsu NPfIT local service provider contract is the subject of a protracted legal dispute between the company and the DH.

MP Richard Bacon, a member of the Public Accounts Committee, has criticised the size of some of the payments to BT.

Further payments are due to BT under the NPfIT contracts and it may also receive new payments for work under the Care.data project.

Comment

BT’s stunning financial success from the NHS IT scheme shows the value, from a supplier’s perspective, of getting a foot in the door. For some time it has been a monopoly supplier to the NHS. Its grip on the NHS, the HSCIC and the Department of Health, could be diminished if the HSCIC split up its work and awarded a set of new contracts. That is unlikely to happen. Indeed the signs are that some Whitehall officials would like to tie in the NHS to BT for the foreseeable future.

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2 responses to “BT earns £1.3bn extra from “dismantled” NHS IT scheme

  1. I assume that nobody who reads this will be at all surprised.

    This was completely predicable from the inception of NPfIT and many commentators from the NHS, industry and academia said as much.

    NPfIT was an effective cartel when BT, Accenture, Fujitsu and CSC were awarded their LSP contracts back in the day even though they were not allowed to sell in their own software. 10 or so years down the line we are left with BT and CSC. CSC now own iSoft so they are in fact providing their own software which an LSP is not supposed to do (why has no one picked up on this?)

    Having decimated the UK healthcare software industry where else can the NHS go? Cartel.

    Actually I think its worse than that. The NHS finds itself lumbered with the IT equivalent of Banks too big to fail. Think about it, what would happen if BT and CSC were contractually treated as they should have been given their collective lack of performance and delivery against the original contracts? The NHS would be in an even bigger mess than it is in now.

    I admire the work you do Tony and your patience and resilience. I also think that you should continue. I fear, however, that your campaign for change will not bring about any change as the powers that be recognise and accept the state of play.

    Sorry for the doom and gloom but I was in a bad mood this morning and this article did not help 😦

    Like

  2. Pingback: The biggest cause of shared services failure? | Calchas

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