Tag Archives: public sector

Today’s report on the NPfIT: the good news

Posted on 03/08/2011 | 1 comment

By Tony Collins

Conservative MP Richard Bacon says there is some good news from the “fiasco” that is the NHS National Programme for IT.

He says: “The National Programme for IT in the NHS, the largest civilian IT programme in the world, has failed in its main purpose.   After many years of thinking big but achieving little, the Department of Health has been forced to admit that the central aim of a detailed electronic care record for every patient in England will remain a pipe dream.

“The Department is unable to show what has been achieved for the £2.7bn spent so far on care records systems, while its attempts to renegotiate contracts have resulted in huge reductions in what suppliers are required to deliver without an equivalent cut in prices.

“Meanwhile, many Trusts could face unquantifiable future bills for the upkeep of interim systems which were never deemed adequate for the original contracts and which were only installed because suppliers were unable to meet their original obligations.

“The only good news from this fiasco is that every move of the Department of Health in this area will now be subject to the closest scrutiny from the Cabinet Office”.

Bacon was commenting on today’s report of the Public Accounts Committee on NPfIT detailed care records systems.

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Fujitsu denies Whitehall claim over NHS IT work

Posted on 03/08/2011 | Leave a comment

By Tony Collins

The Department of Health has suggested in a memo to MPs that Fujitsu, after having its NPfIT contract terminated, sought to improve its financial position by doubling service charges and threatening to turn off systems if it was not paid.

Fujitsu has denied the accusations, describing them as “wholly untrue”. It says that “as a trusted supplier of services to many Government departments Fujitsu would never countenance adopting such a position”.

The Department of Health’s claim was in the context of its legal action with Fujitsu after the supplier’s NPfIT contract was terminated in 2008.

In a memo published today in a report of the Public Accounts Committee on the NPfIT detailed care records systems, the DH responds to a question by MP Richard Bacon on what the maximum costs would be if contracts with the two remaining local service providers CSC and BT were to be cancelled.

The DH sets out some of the possible costs including those associated with providing ongoing services after the contract is terminated. Says the DH memo:

“It is likely that suppliers will seek to increase these ongoing costs in an attempt to improve their financial position (Fujitsu, for example, doubled the service charges claiming they would turn the systems off unless we paid).”

But the DH provides no evidence of its claim, and the Committee in its report today casts doubt on the credibility of some DH statements related to the NPfIT.

In a statement Fujitsu said:

“If the suggestion is that that Fujitsu threatened to  turn off its systems unless the Department of Health agreed to a doubling of charges that is wholly untrue. As a trusted supplier of services to many Government departments Fujitsu would never countenance adopting such a position.

“After Fujitsu’s contract terminated Fujitsu continued to provide significant services ( Care Records and PACS / RIS) to a large number of Trusts whilst a replacement temporary contract was negotiated.

“The temporary contract was required to cover the period up to transfer of the services to alternative suppliers. Fujitsu supported this activity for six weeks after termination at its own risk, without a contract and any security of payment.

“Had Fujitsu not done so this the risks to the NHS would have been significant. Far from taking advantage, Fujitsu acted very responsibly and properly in safeguarding the ongoing provision of services to end users.

“Fujitsu’s charges for continuing to provide services were based upon the charging principles set out in it original contract. This was confirmed by the Department’s own audit.”

DH puts case against cancelling NPfIT contracts

BT slammed over NHS value for money claim.

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A standard cloud-based ERP for central govt?

Posted on 31/07/2011 | 1 comment

By Tony Collins

 The Cabinet Office has published “Government Shared Services: A Strategic Vision – July 2011″ which suggests a  “cloud- based ERP standard platform which Departments could buy into and from”.

The idea is part of the coalition’s plans to standardise IT systems within government. Standardising could save money – but, as the Public Administration Select Committee warned last week, not if standardising means giving even more control of government IT to a few large, monopolistic suppliers.

The Cabinet Office says that a number of Departments are due to upgrade their supporting IT systems for back office corporate services in the coming years.

 “A co-ordinated management approach by Government will lower the cost of reinvestment whilst enabling a rationalisation of the current landscape,” says the Cabinet Office.

“For example, a number of large Departments who have implemented and operate an Enterprise Resource Platform (ERP) solution need to plan for the expiration of support to the current instance by 2013.

 “This presents an opportunity for UK Government to source a “vertical” solution for a “cloud based” ERP standard platform which Departments could buy into and from.”

On Shared Services, the plan is to 

“reform how Central Government procures and manages consolidated back office corporate services – by establishing an equitable market of a small number of accredited Independent Shared Service Centres and enabling Departments and their ALBs [arm’s-length bodies] to choose between these – in order to drive up quality and reduce costs of these services, in support of Governments cost reduction targets.”

The Cabinet office says that approved shared services centres will “provide outcome based services, using standardised simplified processes, with the expectation to regularly publish performance data against established benchmarks”.

They will be able to make use of different business models – such as mutualisation – to “leverage capability and the financial investment needed to deliver this service and may operate virtually or from a small number of fully integrated delivery centres”.

Government shared services – a strategic vision. July 2011

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Siemens given extra £265m on passport contract

Posted on 26/07/2011 | 3 comments

By Tony Collins

Changing the culture of the Home Office will be quite a challenge – but not an impossible one.

The immigration minister Damian Green has revealed in a Parliamentary reply that Siemens received at least £265m more than expected on a contract to build and run passport IT systems.

The extra money to Siemens was funded by the fees charged to passport applicants. The Home Office requires that the Identity and Passport Service covers its costs from passport fees – which have more than trebled since the start of the contract.

In September 1999, the fee payable by a member of the public making a postal application for a standard 10-year passport was:

– £21 for a standard passport

– £31 for passports issued over-the-counter.

Today a passport costs:

– £77.50 for a standard passport

– £129.50 for one over-the-counter.

Campaign4Change asked the Home Office for an explanation of the extra payments to Siemens. Its spokesman gave only a general account which answered none of our specific questions.  

When we expressed gratitude to Andrew Bell in the Home Office’s press office for his quick response to our questions and pointed out that he hadn’t answered any of them he replied: “We have nothing to add”.

What’s clear is that the Home Office may be under new coalition management but its culture of non-accountability and secrecy haven’t changed.

It’s also clear that, with Gateway reviews remaining secret, Parliament has no certain way of knowing when any large IT-enabled change contract is deviating substantially from the contract in time, scope or costs.

In 2009 the Home Office replaced Siemens with CSC as the main passport IT supplier contract. Have extra payments been made to CSC under its £385m 10-year passport contract? Parliament has no idea, and neither do we.

Damian Green reveals extra payments to Siemens

This was Damian Green’s reply to a question by SNP MP Dr Eilidh Whiteford.

Dr Whiteford: To ask the Secretary of State for the Home Department what the original estimate, at current prices, was for the cost to the public purse of the Siemens IT system for the Passport Agency; what the final cost, at current prices, was at the time of completion; and whether additional costs have been incurred since completion.

Damian Green: At the time of contract award, the anticipated contract value was between £80 to £100m over a 10-year period. The contract duration extended to 11 years at a total cost of approximately £365m.”

Green added: “The increase in costs over the term of the Siemens contract can be attributed to numerous factors including additional demand for passports, enhancements of the IT infrastructure and business processes to accommodate changes in policy, response to changes in security threats and customer service improvements.”

How well did Siemens perform on its £365m passport contract?

Siemens had mixed success on its passport contract. It helped introduce the new  Passport Application Support System [PASS] in 1999 which failed badly, in part because of errors in scanning forms; and nobody realised until too late that extra processing time on applications was slowing down the issuing of passports.

The result was that  hundreds of passport applicants had to cancel their holidays or change their travel dates. A national roll-out of PASS was delayed, and the new work processes and system eventually stabilised.

When the contract finished in 2009, CSC was appointed to build and run new IT systems under a £385m 10-year contract which included replacing  the PASS. An  upgrade of PASS in 2007 destabilised the system temporarily.

The incident made staff at the Identity and Passport Service realise that they could not  subject the PASS system to further major changes without risking disruption to internal operations.

A year earlier,  in 2006, the Identity and Passport Service had a failure with its introduction of an electronic passport application system EPA2. To its credit the Service later published the lessons from the project. This decision on openness came from managers at the passport service,  rather than from within the Home Office HQ.

Home Office culture of secrecy remains

To see if anything has changed on openness and accountability since the last administration we asked the Home Office the following:

a)       Does the Home Office consider the contract with Siemens to have been value for money?

b)       Has, or will, the Home Office publish any information on the contract to justify or explain the extra spend, such as Gateway reviews?

c)       Any comment please on a suggestion that Parliament should be kept informed of such increases.

d)       Are there any plans to explain or tell Parliament about any increases in the cost of the [replacement] contract with CSC?

This was the reply of the Home Office’s spokesman Andrew Bell:

“The parliamentary answer – enclosed below – covers some of this.

“In addition, to note that Siemens contract was for developing and maintaining the IT infrastructure for IPS  [Identity and Passport Service] to issue passports. It also included support for processing applications such as the scanning of the documents required for passports.

“The Identity and Passport Service awarded this new contract for providing this service to Computer Sciences Corporation (CSC) in October 2009.”

**

Campaign4Change has given details of the Home Office’s replies to us to a campaigning MP.

We are grateful to publicservice.co.uk for its article which drew our attention to Damian Green’s reply.

Link:

MP asks NAO to consider an inquiry after our article on the Siemens passport contract.

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Did officials tell MPs the whole truth on NPfIT payments to CSC?

Posted on 15/07/2011 | 2 comments

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.

Comment:

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.

Yours sincerely

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

Yours sincerely

Richard Bacon

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Firecontrol shows how much Major Projects Authority is needed

Posted on 07/07/2011 | Leave a comment

When an investigative team from BBC File on 4 went to a business estate near Taunton, they saw an empty “hi-tech fortress” that looked like a NASA control room.

Nobody was working there. Nearly an entire wall of the control room was fitted with 50-inch monitors – 20 of them. They were blank.

That centre – and a further eight purpose-built buildings like it – remain empty because control room software has yet to be installed.

The £469m wasted on the centres and the failed IT project to support them – together called Firecontrol – was the subject yesterday of a hearing of the Public Accounts Committee.

Mistaken recommendation

At the hearing Sir Bob Kerslake, Permanent Secretary, Department for Communities and Local Government, said that officials made a “mistaken” recommendation to go-ahead of a new IT and control centres for fire services.  

Kerslake accepted points made the Committee’s chair Margaret Hodge that officials recommended the go-ahead of the Firecontrol IT project without reliable figures on likely costs, savings or benefits

No finalised business case or project plan 

Also absent when the IT procurement went ahead was a finalised project plan or business case, MPs heard yesterday. The full business case for Firecontrol wasn’t published until June 2007, three years after the start of the IT project. A revised business case was published in 2009, the year before the project was cancelled. 

Rush to buy new systems – as with the NHS IT scheme

The Committee was told that procurement of new systems was underway by May 2004, amid a deep level of ignorance, because officials were in a rush.

It was a similar story on the NPfIT: officials were in a hurry to complete the procurement of new systems. And as with the NPfIT, there was no local buy-in. “Firecontrol was flawed from the outset because it did not have the support of the majority of those essential to its success – its users,” said the NAO.

Local fire services were under no statutory duty to use the regional control centres. As with the NPfIT, central government officials thought they could persuade local services to use the centres. They failed.

Firecontrol has lost a minimum of £469m, according to the NAO. The Department cancelled the scheme in December 2010 because of continued uncertainties. The coalition has approved a new project due to cost about £84m – which prompted MPs to ask yesterday why the original scheme could not have been done much cheaper.

What about the officials who made the flawed recommendation to go ahead?

Margaret Hodge, chair of the committee, asked Kerslake why his department did not seek a “ministerial direction” before embarking on a project that was so flawed. Ministerial directions are issued by departments’ most senior civil servants when they disagree with their minister’s decision so strongly that they refuse to be accountable for it.

Kerslake replied that no ministerial direction was issued because it was officials who were recommending the project’s go-ahead.

Said Kerslake: 

“I don’t think it came to that [Ministerial Direction] because the view of officials was to recommend, with some of issues identified as concerns, that the scheme went ahead. This was not a case where a Direction would have applied because the recommendation from officials, as I understand it, was to go ahead with the scheme.”

MPs heard that Kerslake was a non-executive director at the department when the decision was taken to go ahead with Firecontrol. Didn’t he object to the scheme’s approval?

Kerslake said he raised concerns to the board about the large scale of the investment compared to the problem. “The concern I had at the time, whether fire and rescue services were willing to take on this technology, were all points that were discussed. The view of the officials on balance at the time was that the benefits of doing the scheme outweighed the risks and costs.”

Kerslake said that as a non-executive he was on the board in an advisory role.

Conservative MP Richard Bacon, a long-standing member of the committee, asked Kerslake if his scepticism as a non-executive was recorded.

“It was clearly part of the discussion. I have not gone back and checked every note of the meetings.”

Comment:

MP Richard Bacon suggested yesterday that the only accountability for the failure of the project was Sir Robert Kerslake’s having an uncomfortable two hours before the Public Accounts Committee.

As for his officials, the only accountability for the waste of £469m was to sit in seats behind him, periodically passing him notes. An observer at the hearing said public seats in the committee room “seemed to be packed full of advisers passing notes to the four people hauled before the committee”.

It’s a civil service tradition that officials are not generally held responsible for recommendations because the final decision on major projects is taken by the department’s minister; yet ministers will tend to know only what they are told by department’s civil servants. 

If the officials are incompetent in drawing up their recommendations, they may be incompetent in the briefings they give their ministers.

Even so it would be a brave minister who rejected the recommendation of permanent and supposedly expert staff.

That’s why the coalition’s setting up of the Cabinet Office’s Major Projects Authority is such a good move: it will challenge departmental complacency and over-confidence in its own abilities and decisions. 

Cabinet Office Francis Maude announced on 31 March 2011 that “from today all major projects will be scrutinised by the new Major Projects Authority”. 

Most importantly it has powers from the Prime Minister to oversee and direct the effective management of all large-scale projects. Though there are still uncertainties among Cabinet Office officials about the extent to which the Major Projects Authority can intervene in major projects, it has an enforceable mandate from Cameron to scrutinise proposals for major projects; and the Authority is run by the redoubtable Australian David Pitchford who reports to the Cabinet Office’s Chief Operating Officer Ian Watmore whose brief includes making efficiency savings.

With the Major Projects Authority central government has the chance to stop flawed projects such as Firecontrol going ahead. Yesterday’s PAC hearing showed how badly the Authority is needed as an independent challenge. The existence of the Authority is one of the most important developments in government IT for decades – provided it makes effective use of the PM’s mandate. 

Firecontrol chiefs list reasons for project’s collapse.

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FireControl – should PA Consulting share some responsibility for what happened?

Posted on 01/07/2011 | 4 comments

By Tony Collins

The defence and aerospace supplier EADS is widely regarded as the main supplier of the FireControl project which was cancelled in December 2010, with wasted costs of at least £469m.

But did the project have too many consultants, some of whom were  accountability-free? The question is raised by report published today on FireControl by the National Audit Office.

Says the report:

 “The implementation of FiReControl was heavily reliant on consultants and interim staff, who contributed around half the Department’s [for Communities and Local Government] project team at a cost of £68.6m, over three-quarters of the total spend on the national team supporting the project.

“PA Consulting was contracted to provide consultancy services at a cost of £42m to the end of March 2011. Its staff held key positions throughout the project, including the Project Manager, one of only two senior members of the team who remained on the project throughout its duration.

“Despite the Department’s reliance on consultants, there was no framework to assess their performance until the end of 2008, when the National Audit Office recommended that the Department’s contracts with consultants should include mechanisms to enable regular objective monitoring of performance, such as performance indicators and key milestones.

“Without such mechanisms, the Department was unable to determine whether or not the services provided offered value for money.

“A review of the FiReControl project by the Office of Government Commerce in 2008 similarly found that some consultants in key management roles did not have a level of authority matching their responsibilities, which led to decisions being referred to others.

“Other consultants were found to hold a disproportionate (and accountability-free) amount of authority. In response, the Department reviewed its use of consultants and interims within FiReControl and reduced the number employed, leading to a fall of 24% in consultancy costs between 2008-09 and 2009-10, and a further fall of 26 per cent in the following year.”

The failure of the FireControl project – and many other central government IT-based programmes dating back decades – shows the need for independent challenge as projects progress or otherwise.

Gateway reviews are independent reports on the state of a project but they appear to be ignored if they’re too critical, as in the cases of FireControl and the Rural Payments Agency’s Single Payment Scheme; and the Gateway review reports are secret – even today – so there is no outside pressure on departments to act on them.

What’s to be welcomed is the intervention of the Cabinet Office in major projects. FireControl systems could have been delivered. They could have worked. But there were too many missed deadlines and continuing uncertainties, as the NAO points out in today’s report.

The Cabinet Office’s major Projects Review Group, as it was then, said the FireControl contract should be ended – and it was a few months later, amicably, in December 2010.

All credit to the NAO for naming PA Consulting, as well as the main supplier EADS.

NAO report on FireControl.

What FireControl and NPfIT have in common.

FireControl disaster blasted by unions

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What the FireControl disaster and NPfIT have in common

Posted on 01/07/2011 | 1 comment

By Tony Collins

From today’s National Audit Office report on FireControl project which wasted at least £469m:

“FiReControl was flawed from the outset because it did not have the support of the majority of those essential to its success – its users”

Were the Fire and Rescue Service’s FireControl project and the National Programme for IT in the NHS launched to discover all that can go wrong with a large IT-based project?

One could be forgiven for thinking so. The two projects were conceived in the early part of the new millennium as national, centralised schemes which, in the main, did not have any support from the people who would be using them.

The schemes were launched by civil servants and ministers with good intentions and little or no experience in the many IT-related project disasters that went before.

The projects that had failed since the late 1970s and early 1980s went wrong for similar reasons. As early as 1984 the Public Accounts Committee met to question civil servants on the common factors in a succession of “administrative computing” failures.

Since then every department has come to its IT-based projects and programmes with little understanding – and very little interest – in the lessons from history; and it’s said that those who don’t learn from history are destined to repeat past mistakes.

The FireControl system, which is the subject of an NAO report today, and the NPfIT, had something striking in common: the fact that the system users were the ones with the control of money and decisions on how they spent it – and they did not want technology imposed on them by civil servants in London. That was clear from the start. But it did not stop either the NPfIT or FireControl going ahead.

Indeed a Gateway Review by the Office of Government Commerce in April 2004, after the FireControl project had been approved, found that the “extraordinarily fast pace” of the project was introducing new risks to its delivery, and was escalating the risks already identified. The review concluded that the project was in poor condition overall and at significant risk of failing to deliver.

That review was, at the time, as with similar reviews on the NPfIT, kept secret, so those outside the project, including MPs and the media, were unable to challenge the projects with a credibility that could have influenced decisions on the future of the schemes.

New gateway reviews are still kept secret today, despite the coalition’s promise of openness and transparency.

The good thing about the FireControl project and the NPfIT is that the Cabinet Office has taken control. A Cabinet Office Major Projects Review Group in in July 2010 concluded that negotiations should begin to terminate the FireControl contract – and indeed a settlement with the supplier EADS was reached successfully and amicably in December 2010. The Cabinet Office’s Major Projects Authority is now  reviewing the future of CSC’s £2.9bn worth of NPfIT contracts.

The bad thing is that the FireControl scheme has wasted at least £469m, according to today’s report of the National Audit Office. The NPfIT may have lost a great deal more.

NAO’s conclusion on FireControl

This was the NAO’s conclusion on the FireControl project. Much the same could be said of the NPfIT:

“This is an example of bad value for money. FiReControl will have wasted a minimum of £469m, through its failure to provide any enhancement to the capacity of the control centres of Fire and Rescue Services after seven years.

“At root, this outcome has been reached because the Department, without sufficient mandatory powers, decided to try to centrally impose a national control system on unwilling locally accountable bodies, which prize their distinctiveness from each other and their freedom to choose their own equipment.

“At the same time, it tried to rush through key elements of project initiation and ended up with an inadequate IT contract, under-appreciating its complexity and risk, and then mismanaged problems with the IT contractor’s performance and delivery.”

 Links:

FireControl project a comprehensive failure.

The failure of the FireControl project – NAO report.

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MP questions why IT costs at two nearby hospital trusts are vastly different for similar systems

Posted on 28/06/2011 | 4 comments

By Tony Collins

A Conservative MP has asked the NHS Chief Executive Sir David Nicholson to explain why an NHS trust is deploying a centrally-chosen Cerner patient record system at more than twice the cost of a similar but non-NPfIT system at a nearby Foundation trust.

University Hospitals Bristol NHS Foundation Trust is deploying the Medway system from System C  (now owned by McKesson] at a reported cost of £8.2m over seven years. The acute trust is one of the largest in the country.

With support for less than five years, the nearby North Bristol NHS trust is taking the Cerner Millennium patient record system under the NPfIT at a cost of £21m from BT – and the go-live date in June has slipped to July.

Now Richard Bacon, a member of the Public Accounts Committee, has written to Sir David Nicholson asking for an explanation of why the two trusts are paying vastly different amounts for systems that do similar things. Bacon has also asked Nicholson whether he believes the higher sum is value for money.

The average cost of BT Cerner go-lives under  the NPfIT is £28.3m according to the National Audit Office.

Bacon’s letter is part of evidence which suggests that continuing NPfIT contracts is costing hundreds of millions of pounds more than necessary.

The coalition government, despite its plan to cut public sector IT costs, may spend a further £3bn to 4.bn with the NPfIT’s two major suppliers, BT and CSC, though the Cabinet Office’s Major Projects Authority is reviewing CSC’s £2.9bn worth of contracts.

Bacon’s letter also questions advance payments to CSC, and whether a recent hearing of the Public Accounts Committee was told the full truth.

An unwavering defender of the NPfIT, Nicholson is likely to defend the cost of the North Bristol implementation, and the advance payments to CSC. On costs, he will argue that North Bristol’s systems have better resilience than at non-NPfIT sites.

If that were true – and there is no evidence it is – the extra costs of having a “hot”, or real-time standby data centre, may not justify a doubling of a rival’s prices. 

This is Bacon’s letter to Sir David Nicholson:

Chief Executive, National Health Service, Department of Health, Richmond House, London SW1A 2NS

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:

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.

I should be most grateful if you would let me know the answers to the following questions:

Is this report accurate?

Why was this payment was not reported to the PAC, either during the hearing or in the subsequent memorandum?

What was the justification for this payment and what value does it represent to the NHS?

What will happen in respect of this payment if a new memorandum of understanding is not in fact signed with CSC?

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:

Can you explain why the delivery date agreed with BT at the contract “reset” was 4th June 2011?

Why it was then revised to 2nd July 2011?

And why it now appears that there is no agreed delivery date at all?

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?

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

Yours sincerely

Richard Bacon

MP for South Norfolk, Member of the Public Accounts Committee

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Posted in Campaign4Change, NHS, npfit, outsourcing, public sector, public services, supplier relationships

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Cabinet Office takes on open-source specialist

Posted on 28/06/2011 | 1 comment

By Tony Collins

“Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.”

 An open source advocate and critic of the high costs of government IT, Liam Maxwell, is joining the Cabinet Office for 11 months  to provide expertise on how civil servants can use innovative new technology to deliver better, cheaper solutions.

His secondment from Eton College where he is ICT head underlines the determination of Francis Maude, the Cabinet Office minister, to continue bringing in strong people to oversee major changes in the way government works.

What remains unclear, however, is how much influence the Cabinet Office will have on autonomous government departments and their permanent secretaries.

Although David Cameron has given his personal backing to the changes being sought by the Cabinet Office, the PM has  little or no direct control over what departments do or don’t do.

Simon Dickson at Puffbox points out that Liam Maxwell has said all the right things in the past. Maxwell co-wrote a 2008 paper for the Tories on ‘Open Source, Open Standards: Reforming IT procurement in Government’, and also a 2010 paper Better for Less‘ for the Network for the Post-Bureaucratic Age, which said:

“British Government IT is too expensive. Worse, it has been designed badly and built to last. IT must work together across government and deliver a meaningful return on investment. Government must stop believing it is special and use commodity IT services much more widely.

“As we saw with the Open Source policy, the wish is there. However, the one common thread of successive technology leadership in government is a failure to execute policy.

“There is at last a ministerial team in place that “gets it”. The austerity measures that all have to face should act as a powerful dynamic for change. Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.” 

In a statement, the Cabinet office said that Maxwell will help to develop ideas for how technology can:

– increase the drive towards open standards and open source software

– help SMEs to enter the government marketplace

– maintain a horizon scan of future technologies and methods

– develop new, more flexible ways of delivery in government

Ian Watmore, the Government’s Chief Operating Officer said: “Liam’s insight and knowledge will make him a valuable source to the team over the coming year. He has a strong track record of delivering success in government ICT and he also brings significant experience of turning the theory into practice.”

Dickson said that Maxwell was a Windsor and Maidenhead councillor who drove the debate a year or so ago on councils switching to Open Document Format, part of OpenOffice.

The Guardian said Maxwell has been an adviser to the  Conservative party on government ICT.  At the Cabinet Office he will advise the Efficiency and Reform Group and Ian Watmore. He will begin the job in September and is taking a sabbatical from Eton.

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Posted in innovation, open source, public sector, public services, Uncategorized

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