Leading article: Waste that the country can no longer afford

The cost of the NHS IT scheme has been staggering. Some £6.4bn has been spent. Another £4.3bn is needed.

Sunday 23 October 2011 08:06

The NHS IT scheme will be remembered as one of the great public procurement disasters of all time. The cost has been staggering. Some £6.4bn has been spent. The original 2007 deadline for the completion of the vast project was missed. And now the Government is expected to call a halt to the entire project. Instead of a national database of patients' records, as originally envisaged by the previous Labour government in 2002, we will have a patchwork of incompatible systems.

The House of Commons Public Affairs Committee argues in its new report into the fiasco today that the Department of Health should have consulted more extensively with health professionals before embarking on the project. That is certainly true. Many doctors still do not understand why this new system is being pushed on them. But this has to be seen in a larger context. For this is merely the most expensive in a long line of public-sector IT failures. From the Rural Payments Agency, to the National Offender Management Information System, just about every ambitious IT system inaugurated over the past decade-and- a-half has gone wrong.

Ministers must obviously take a large share of blame. They have gullibly swallowed implausible claims from private-sector sales people about the ability of grand new IT schemes to revolutionise the public services. And rather than running small-scale trials first to test effectiveness, they have leapt in to large projects with both feet. They have been reckless in other ways too. Rather than choosing IT systems that have been shown to work elsewhere, they have approved complex bespoke projects.

Senior civil servants must shoulder responsibility too. It is one of the jobs of these public servants to keep costs under control. Yet they have, in many cases, approved contracts with private firms that have proved to be extremely poor value for taxpayers. It has emerged that several of these contracts are more expensive to break than maintain. Yet we know nothing about who gave them the green light. Ministers have had to answer for the failure of these projects in Parliament. There has been no such accountability for civil servants.

But we must not forget that each botched IT project also represents a private-sector shortcoming. Many firms have promised a great deal but not delivered. The PAC today rightly singles out CSC and BT for criticism for their inability to live up to their contractual commitments over the NHS IT projects. These businesses have been – and continue to be – rewarded for failure.

Away from the blame game, however, the bottom line is that this waste has to end. In an era when the economy was booming, IT faragos, though scandalous, were tolerable. But in these times of austerity, we simply cannot afford to fritter money away in this manner. When one considers that the NHS needs to make efficiency savings of £20bn over the next five years merely to keep up with rising demand for services, the logic of the Government's decision to pull the plug on the remaining £4.3bn commitment for the project is clear. The economic case against public sector waste is now overwhelming.

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