NHS trusts pay millions in fines to suppliers of delayed IT system

The Gardian - June 6, 2006
John Carvel, social affairs editor

Original text from www.guardian.co.uk

NHS trusts are being made to pay multimillion-pound penalties to computer suppliers because of a clause in contracts for the health service's £20bn IT scheme.

Arrangements disclosed today by the magazine Computer Weekly show the government committed trusts to provide 200 staff to work with the computer companies to devise the best possible systems.

In southern England the NHS was unable to meet an obligation to second 50 full-time employees to the Japanese-owned Fujitsu Corporation. The trusts will now have to pay Fujitsu £19m.

The Department of Health said: "An agreement has been reached to buy out the liability at a cost of £19m in 2006-07 as NHS trusts have decided not to supply the staff resources."

Last week Lord Warner, the health minister, said the NHS's IT programme was at least two years behind schedule, but trusts are not benefiting from any penalties imposed on suppliers. He said the programme would cost about £20bn over 10 years - much more than the £6.2bn previously mentioned by ministers as the cost of procuring systems to hold patient records, transmit medical data and book hospital appointments.

Lord Warner was understood to be trying to pre-empt criticism in a National Audit Office report after an investigation into the NHS's IT programme, due for publication shortly.

The Tory MP Richard Bacon, a member of the Commons public accounts committee, discovered the fines against NHS trusts. He found that trusts in north-west England and the West Midlands were committed to provide 50 IT staff to work with the US company CSC. They face potential penalties of up to £6.9m a year for 10 years.

Mr Bacon said: "At a time when hard-pressed NHS trusts are having to make painful choices to reduce deficits, they are being forced to pay money they don't have and release staff they can't spare, for something they don't want and which doesn't work ... the NHS is being hit with fines running into tens of millions of pounds, which it simply cannot afford".

A spokesman for NHS Connecting for Health said: "We must have frontline NHS staff involved in the design and implementation of systems and services ... It was always recognised that it would be a challenge to [provide] NHS staff with the necessary expertise because it would be difficult to release them from their normal duties." Since trusts would benefit from the scheme, it was appropriate they should pay for some of it, he said.

The disclosure came as Monitor, the regulator of foundation hospitals, reported that they ended the 2005-06 financial year with a combined deficit of £8m. But nine trusts warned they might have bad debts worth £28m because primary trusts might not pay for treatment of their local patients.