Category Archives: CRC

NPfIT central costs rise by tens of millions – even after “dismantling”

By Tony Collins

On 22 September 2011 the Department of Health announced the dismantling of the NPfIT. As the press release was being issued some officials at the department were aware that they were continuing to spend tens of millions on central administrative costs of the programme.

Today’s report of the Public Accounts Committee has a figure for the central costs of the NPfIT until the end of March 2012 of about £890m. Before the DH announced the dismantling of the programme, in March 2011, the DH put the central costs at £817m.

So there has been a rise in central admin costs of about £70m since the NPfIT was supposedly dismantled.

The administrative costs are separate from spending on the contracts with BT or CSC. The admin costs don’t include the delivery of a single laptop to the NHS under the NPfIT. They are simply the central costs of administering the programme – including day rates for consultants – such as day rates of £1,700 to help senior officials prepare for appearances before MPs on the Public Accounts Committee.

The central costs have never been explained, not even by the National Audit Office which has published several reports on the NPfIT.  It is known that some central costs are explained by items of questionable benefit such as the commissioning of DVD films that marketed the NPfIT.

Some of the cost categories have emerged as a result of an FOI request (below).  Officials made regular visits to various parts of the globe to promote the success of the NPfIT. It’s thought that the DH has spent more than £100m on consultants for the programme.

Millions of pounds have been spent with public relations companies. The DH spent about £30,000 on press cuttings in two years alone.  Released central costs for just two years of the NPfIT between 2005 and 2007 include:

  • £1.23m with Expotel Hotel Reservations
  • £1.87 Harry Weeks Business Travel
  • BT conferencing – £1.15m
  • Intercall video conferencing – £274,973
  • MWB (Serviced Offices) – £15.8m
  • Regus – offices and meeting rooms – £3.17m
  • Spring International Express (courier and other services) – £192, 662
  • Cision UK (press cuttings) – £30,000
  • Fishburn Hedges (includes public relations) – £559,310
  • Good Relations (public relations] – £1.55m
  • Porter Novelli (public relations and information) – £943,000
  • ASE Consulting – £31.7m
  • Capgemini – £15m
  • Deloitte MCS – £42.8m
  • Atos Consulting – £32.3m
  • Gartner – £3.8m
  • QI Consulting – £14.5m
  • Tribal Consulting – £6.9m

Comment

Central administrative costs of nearly £900m on a single IT programme are breathtaking. That makes the National Programme for IT in the NHS one of the world’s largest public sector IT projects – before a penny has been spent on deliveries of hardware or software to the NHS.

It’s almost as surprising that not even the National Audit Office has been able to obtain a breakdown. Has central spending been properly controlled? Perhaps not, given that the DH, even this year, spent up to £1,700 a day on consultants to brief a senior official for a hearing of the Public Accounts Committee in June 2013.

Maybe the taxpayer should be grateful that the consultants were hired for only 52 days between February and June 2013 to prepare for the Committee’s hearing, and that the DH managed to renegotiate the day rate down from £1,714 to £1,000 a day between April and June.

Maybe the taxpayer should be grateful that the total cost of the consultancy for preparing for the PAC hearing was only £73,563.

But the £73,563 was spent after the DH estimated its central administrative costs on the NPfIT at nearly £900m – which are costs up to 31 March 2012.

It’s also remarkable that some at the DH still consider the NPfIT a success. This was the NAO’s conclusions on the NPfIT in its May 2011 report on the NPfIT Care Records Service:

“Central to achieving the Programme’s aim of improving services and the quality of patient care, was the successful delivery of an electronic patient record for each NHS patient. Although some care records systems are in place, progress against plans has fallen far below expectations and the Department has not delivered care records systems across the NHS, or with anywhere near the completeness of functionality that will enable it to achieve the original aspirations of the Programme.

“The Department has also significantly reduced the scope of the Programme without a proportionate reduction in costs, and is in negotiations to reduce it further still. So we are seeing a steady reduction in value delivered not matched by a reduction in costs.

“On this basis we conclude that the £2.7 billion spent on care records systems so far does not represent value for money, and we do not find grounds for confidence that the remaining planned spend of £4.3 billion will be different.”

But this was the Department of Health’s view on NPfIT Care Records Service value for money:

“The Department considers, however, that the money spent to date has not been  wasted and will potentially deliver value for money… The Department believes that the flexibility provided by the future delivery model for the programme will deliver functionality that best fits the needs of the clinical and managerial community. The future architecture of the programme allows many sources of information to be connected together as opposed to assuming that all relevant information will be stored in a single system. This approach has been proven in other sectors and is fully consistent with the Government’s recently published ICT strategy.”

This contradiction between the DH’s view of the NPfIT, and the NAO’s, indicates, perhaps, that the DH continues to live in a world not entirely attached to reality.

From April 2013, the DH’s central team and some local programme teams responsible for the NPfIT moved to the Health and Social Care Information Centre which has taken over the local service provider contracts with BT and CSC. Will it be able to control central spending on the very-much-alive NPfIT?

Update:

The central costs could rise much further – possibly by more than £100m – if the eventual settlement of the legal case between the DH and Fujitsu works out badly for the taxpayer. Legal costs on the case so far are about £31m.

Department of Energy & Climate Change announces new consultation on CRC

By David Bicknell

In a press release today, the Department of Energy & Climate Change has announced a consultation on simplifying the Carbon Reduction Commitment (CRC) Energy Efficiency scheme.

DECC says that participants will see their administrative costs cut by almost two-thirds, equating to around £330 million of savings up to 2030.

CRC is a mandatory UK-wide trading  scheme covering large business and public sector organisation, who produce 12% of UK carbon emissions. It requires businesses to report on and pay a tax on energy used, and ranks businesses in a performance league table which provides a further reputational incentive to improve their energy efficiency.

Following Chancellor George Osborne’s criticism of the scheme’s complexity in last week’s Budget, DECC now says businesses will now have the opportunity to comment on Government’s proposals. 

The simplified package proposed is aimed at retaining the energy-saving and reputational benefits of the CRC, whilst reducing the bureaucracy of taking part.

Secretary of State Ed Davey said:

“We have listened to businesses’ concerns about the CRC and have set out proposals to radically cut down on ‘red tape’ to save businesses money. The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency”.

DECC says the simplified package will include:

  • A shortening of the CRC qualification process.
  • Reducing the number of fuels covered by CRC from 29 to 4.
  • Reducing the amount of reporting required by businesses.
  • Reducing the length of time participants will have to keep records.
  • Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances. 
  • Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
  • Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance.

The formal consultation will run for twelve weeks, with the Government planning to amend the legislation for CRC by April 2013.

Consultation on a simplified CRC Energy Efficiency Scheme

Osborne’s Budget signals possible end of Carbon Reduction Commitment energy scheme

By David Bicknell

George Osborne’s Budget earlier today has raised significant question marks over the future of the Carbon Reduction Commitment (CRC) energy efficiency scheme.

Osborne said this, “Environmentally sustainable has to be fiscally sustainable too. The Carbon Reduction Commitment was established by the previous Government. It is cumbersome, bureaucratic and imposes unnecessary cost on business. So we will seek major savings in the administrative cost of the Commitment for business. If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.”

It will be interesting to know how those ‘major savings’ in the administrative cost might be achieved. That sounds like a softening up for the end of CRC to me.

Related Links

The Guardian: Green ‘stealth tax’ attacked by business groups

Environment Agency publishes Carbon Reduction Commitment league table

By David Bicknell

The Environment Agency has published the initial league table for the Carbon Reduction Commmitment (CRC) Energy Efficiency scheme.

As the Agency puts it, the Performance League Table (PLT) ranks organisations participating in the CRC on how well they manage their energy efficiency. PLT positions are based on a participant’s changes in energy use against a baseline and not their total emissions. As a result the PLT should motivate organisations to improve their energy efficiency.

The 2010/11 PLT recognises those organisations who have already taken action to monitor and reduce their carbon emissions and is based on information supplied by participating organisations.

The Agency’s website is already under pressure from the number of hits on the site, but the table is available as an Excel file here