Computer overspending by health authorities 'was preventable': Treasury rules on seeking approval for projects costing more than pounds 1m were not followed

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The Independent Online
MULTI-MILLION pound overspends on health service computer projects could have been prevented if the NHS had implemented Treasury guidelines.

Instead, during a four-year hiatus, projects went ahead without question, avoiding the guideline that schemes costing more than pounds 1m should receive Treasury approval. During that time, pounds 63m of taxpayers' money was wasted on a computerisation project at the Wessex Regional Health Authority.

The Independent has learnt that at least one pounds 3.3m computer, ordered in March 1989 as the core of the Wessex regional system, would have been questioned by the Treasury had the rules been followed correctly. The timing of this contract, signed with IBM at the tail end of the financial year, would certainly have raised suspicions. It would also have prompted the detailed questioning that could have unearthed the Wessex debacle sooner.

The Treasury rule on projects of more than pounds 1m dates back to 1988, but a 'misunderstanding' within central NHS administration meant it was not enforced properly. The situation was clarified only last December with the launch of the Government's computerisation plan for the NHS - the Information Management and Technology Strategy.

The gap in enforcing the Treasury rule emerged at a meeting for health service managers last week to launch a new approach to NHS computer purchases.

In a statement issued after the meeting, the Department of Health said that pounds 1m was the level of delegation to the department from the Treasury, dating from 1988. 'The existence of that delegation however was not sufficiently well understood throughout the NHS. The December announcement has now made this clear.'

A spokesman for the department acknowledged that the Treasury rule 'was not effectively taken on board. That means it wasn't happening'. Yesterday, a spokesman could not say how many computer projects of more than pounds 1m the 14 regional health authorities commissioned between 1988 and 1992.

At the London meeting, Mike O'Flynn, director of the information management group of the NHS Management Executive, told delegates anxious that Treasury approval would delay computerisation that they should count themselves lucky the rule was only being enforced now. He said Tom Sackville, Under-Secretary of State for Health, was now insisting on monthly reports on all NHS computer projects worth more than pounds 1m.