Why the doctors' IT system won't see you now

Clayton Hirst reports on how the £6bn project to connect GPs to hospitals has become an urgent case for treatment

The companies that won the lion's share of the work on the £6bn project to overhaul the decrepit NHS computer systems were required to sign up to an unusual clause in their contracts.

Last year, before they could get their hands on these potentially lucrative deals, Richard Granger, the tough-talking civil servant who is in charge of the project, insisted that BT, Accenture, Fujitsu and Computer Sciences Corporation agree not to talk to the press about their work.

It was an attempt by Mr Granger to put an end to the drip-drip of bad news that had bedevilled previous government IT projects. The companies duly obliged.

But earlier this month Accenture was forced to break this vow of silence on the project, known as the NHS National Programme for IT (NPfIT). In a statement, the management consultancy revealed that losses on its two NHS contracts had reached $110m to $150m (£58.5m to £79.7m) and it would not make a profit on them until 2007. Elsewhere Accenture's financial results were impressive, but the disclosure about the NHS contracts immediately wiped $680m off the company's market value.

Was this the first sign of cracks appearing in the £6bn IT project?

Certainly, opposition parties believe there is political capital to be made out of attacking NPfIT. Andrew Lansley, the Conservatives' Shadow Health Secretary, says: "Far too many government IT projects have been costly failures ... After the election, NPfIT needs to be reviewed: we need to maximise competition to involve users fully and effectively."

The Liberal Democrats also want an inquiry. Paul Burstow, the party's health spokesman, fears NPfIT "could end up being a massive waste of money".

But the truth about NPfIT is rather more complex that the politicians would have us believe. The Government has billed it as "the biggest change to healthcare since the creation of the NHS in 1948", and this is not an overstatement. NPfIT will connect 30,000 GPs to 300 hospitals via broadband internet, allowing electronic access to healthcare records, prescription information and research into illnesses.

Against a background of problems with other large government IT projects, such as those at the Passport Agency and the Child Support Agency, the Government decided to run this project differently.

Mr Granger, the former head of the government team at accountants Deloitte and now one of Britain's highest-paid civil servants on a salary package of £250,000, carved the country into six regions and handed out contracts worth around £1bn apiece to the winning bidders. On top of this, he issued separate contracts to run a central database and the broadband network.

His idea was that if a company failed to deliver on its promises then he could penalise it without affecting the rest of the project. Says a source at a business involved in the project: "In the old days, a company would bid £1 knowing that it would really cost £2. It would recoup the extra £1 from various charges to the client."

Mr Granger put a stop to this. Another source involved in the project says: "Granger worked his bollocks off to make the contracts very tight. In essence they say that if companies don't deliver, then at best they won't get paid and at worst they will get kicked off the project."

Already BT, which has the greatest exposure to the NPfIT project with contracts worth £2.1bn, has been fined more than £4m. Sources say that Accenture's problems with NPfIT stem from sub-contractors missing their deadlines.

"There is no denying that this is a higher-risk project," says Tola Sargent, health analyst at the IT consultancy Ovum Holway. "This has serious implications for the suppliers because they won't get paid if they don't deliver."

The higher risks and relatively small contract sizes meant that many of the "traditional" IT outsourcing companies weren't enthusiastic about bidding. Research by the TPI consultancy, published last week, shows that companies such as EDS, Hewlett-Packard and IBM are losing market share to firms such as BT and Atos Origin, which have a strong presence in the healthcare sector.

Mr Granger's attempt to turn his back on the traditional way of running IT projects is also causing problems for the doctors and consultants who will use the new IT systems.

A National Audit Office report in January criticised the Department for Health (DfH) for failing to engage properly with practitioners on the project.

This was borne out in a survey conducted by Medix, a healthcare polling organisation, the following month. It found that just 21 per cent of GPs interviewed were enthusiastic about NPfIT compared with 56 per cent a year before. Support among hospital doctors had also fallen, from 75 per cent last year to 51 per cent.

"It will be a major challenge to overcome the distrust and cynicism that seems to be replacing enthusiasm in the minds of doctors," Medix concluded. "That challenge must surely be addressed urgently."

One of the main causes of concern among medical staff is that the new system of computerised medical records will compromise client confidentiality. Last month, a senior DfH official let it slip that patients would not have any say over what details would be stored on the new computer systems. This appeared to go against earlier assurances from ministers that patients would have a veto on the information.

The British Medical Association has asked the Government to clarify the issue and this is expected to be a talking point at a specially arranged BMA conference next month.

There are also more practical problems with NPfIT. Last month, Mr Granger, speaking at a conference in London, warned that a nationwide shortage of IT professionals was causing "big, big problems". This is hitting the public sector hardest because it cannot compete with the wages of the private IT firms.

Under the NPfIT contracts, NHS trusts have to loan around 200 members of staff, including IT directors, to the consortia running the projects. So far, some trusts have been unable to meet the obligation and they are now liable to compensation claims.

The shortage of staff threatens to cause delays in delivering the new IT systems on time. The trade magazine Computer Weekly has found that of the 20 NHS trusts in London which are due to launch the new IT systems next year, 19 are at "red status" - which means a major deadline could be missed.

These issues are understood to be under examination by the National Audit Office, which is conducting a second investigation - the report is due in the summer - into NPfIT.

NHS Connecting for Health, the government agency overseeing the NPfIT programme, refuses to answer questions about these concerns. Instead it issued a statement saying how the project will benefit doctors, nurses and patients. But after Accenture's shock disclosure earlier this month, there is evidence that Mr Granger's ban on bad news may not last.