Information Technology (NHS)

Tuesday 14th June 2011 Westminster Hall

10:59

[Mr Richard Bacon (South Norfolk) (Con)]

It is a pleasure to serve under your chairmanship, Dr McCrea. I am reminded of Fidel Castro’s old maxim that any speech of less than three or four hours cannot be any good, and when I reviewed the material available for this debate, I felt that it might be difficult to put everything I want to say into a shorter time. I appreciate, however, that this debate lasts only 90 minutes and that the Front-Bench speakers will be called fairly soon. I am not planning to take many interventions during my remarks, so that I can get through everything I wish to say as quickly as possible.

The importance of information technology to good health care cannot be overstated. As leading health informatics expert, Dr Anthony Nowlan, put it:

“Redesigning the ways care is organised and conducted and supporting those new ways with information science is more important to people’s health overall than any new drug we could develop in the next decade.”

He also stated that

“the engagement of clinicians and managers is not just about telling them what is going to happen.”

Sadly, those words accurately summed up a significant part of the problem that we faced.

The national programme for IT in the health service is the largest civilian computer project in the world. It was spawned in late 2001 and early 2002, after the then Prime Minister, Tony Blair, met Bill Gates and was bowled over by a vision of what IT could do to transform the economy and health service. The idea was for information to be captured once and used many times, transforming working processes and speeding up communications. A far-reaching vision set out a programme that would supposedly lead to a transformation in people’s experiences of health care. Hospital admissions and appointments would be booked online—the choose and book system—pharmacists would no longer struggle with the indecipherable handwriting of GPs; and drug prescriptions would be handled electronically. There was to be a new broadband network for the NHS, a new e-mail system, better IT support for GPs and digital X-rays. Most important of all, medical records would be computerised, thus transforming the speed and accuracy of patient treatment through what became known as the NHS care records service.

The NHS care records service comprised two elements: first, a detailed care record that contained full details of a patient’s medical history and treatment. That was to be accessible to a patient’s GP and to local community and hospital care settings, so that if treatment were required, all the information would be available. Secondly, there would be a so-called summary care record that contained medical information about things such as allergies and would be more widely available.

It became clear that Tony Blair was in no mood to wait when he asked Sir John Pattison, who attended the Downing street seminar in February 2002 where these matters were discussed, how long the IT programme would take. Sir John Pattison later stated:

“I swallowed hard because I knew I had to get the answer right… and I said three years.”

Tony Blair replied, “How about two years?” and they settled on two years and nine months from April 2003—in other words, until December 2005. Given the extent of the proposals, that was a ludicrous timetable. Nevertheless, the decision had been made, and everything had to be done at breakneck speed.

Sir John Pattison and his team set to work and produced a blueprint entitled “Delivering 21st century IT support for the NHS: national strategic programme”, which was published in June 2002. The aim was to connect the delivery of the NHS plan with the capabilities of modern information technology. There was, however, an odd discrepancy at the outset. At the back of the original document were four appendices, one of which contained the project profile model and stated that the project’s estimated whole-life costs were £5 billion. It provided a total risk score of 53 out of a maximum of 72. In other words, the project was very high risk. When the document was published, however, that project profile model had been removed and there were only three appendices—the likely costs of the project and the true risks were concealed right from the start. After the publication of the document, the Department of Health established a unit that later became the Connecting for Health agency. In September 2002, Richard Granger was appointed as director general of the NHS IT programme on a salary of about £250,000. His job was to turn the national strategic programme—which soon became the national programme for IT in the health service—into reality.

Richard Granger was a former Deloitte consultant who had successfully overseen the introduction of the London congestion charge. Speaking at a conference in Harrogate some months after his appointment, he announced that the cost of the IT programme would be £2.3 billion. That figure contrasted with the unedited version of Sir John Pattison’s “Delivering 21st century IT support for the NHS”, which a few months earlier had come up with the larger estimate of £5 billion.

Mr Granger commissioned a study by McKinsey into the health care IT market in the UK, which was then dominated by medium-sized firms that sold systems to hospitals and GP surgeries. The study concluded that no single player was capable of becoming a prime contractor in a multi-billion pound programme, and Mr Granger soon announced that the procurement process for the programme would be structured to attract global IT players. He had little respect for the skills of most public sector buyers of computing systems—perhaps with good reason if one looks at the track record—and knew that IT contractors routinely run rings around their customers in government.

Mr Granger made it clear that things would be different on his watch. Contractors would not get paid until they delivered, and those not up to the mark would be replaced. He even compared contractors to huskies pulling a sled on a polar expedition:

“When one of the dogs goes lame, and begins to slow the others down, they are shot. They are then chopped up and fed to the other dogs. The survivors work harder, not only because they’ve had a meal, but also because they have seen what will happen should they themselves go lame.”

Mr Granger started as he meant to go on, and potential contractors were left in no doubt that the procurement process was to happen quickly. In May 2003, potential bidders were given a 500-page document called a draft output-based specification, and told to respond within five weeks.

One of the classic failures in many IT projects is the failure to consult adequately with those who will use the systems once they are delivered. The national programme followed that pattern in many respects, but in this case that did not happen by accident. Mr Granger had no patience with what he saw as special pleading by medical staff, whom he believed were unwilling to accept the ruthless standardisation that was necessary to deliver the advantages offered by the IT system. He effectively believed that he knew what the clinicians needed better than they did themselves.

Some clinicians were keen to ensure that they had proper input into what was happening. Sir John Pattison asked Dr Anthony Nowlan, the health informatics expert who at the time was the executive director of the NHS Information Authority, to secure the involvement of health professionals in the programme. The aim was to obtain a professionally agreed consensus about what was the most valuable information to store, and what was achievable in practice.

After several months the group had hammered out a consensus, but although that work was fed in when the contracts began to be specified, it formed only a relatively small part of the overall specification. The large majority of the so-called output-based specifications, and the crucial major hospital systems at the heart of the programme, were developed without involvement and scrutiny by the leadership of the health profession. That happened despite the fact that involvement by users is essential if one wants software that works and that people will use.

The great speed at which contracting was completed meant that all complex issues had to be faced after the contracts had been let. Anthony Nowlan began to realise that his efforts were not welcome, and he told the Public Accounts Committee that

“it became increasingly clear to me that efforts to communicate with health professionals and bring them more into the leadership of the programme were effectively obstructed.”

Worse still, Nowlan was subsequently asked to provide a list of the names of hundreds of people who had been involved in specification work, so as to provide evidence to reviewers that the work was valid. In fact, all that had happened was that an e-mail had been sent out. Quite understandably, Dr Nowlan thought that saying that people had been consulted because they had been sent an e-mail was not consultation in any proper sense, any more than compiling a list of people who had been sent an e-mail was proper validation. He regarded the claims as a sham, and refused to co-operate.

It turned out that serious clinical input into the programme was not really wanted. As Professor Peter Hutton later told the PAC,

“it was like being in a juggernaut lorry going up the M1 and it did not really matter where you went as long as you arrived somewhere on time. Then, when you had arrived somewhere, you would go out and buy a product, but you were not quite sure what you wanted to buy. To be honest, I do not think the people selling it knew what we needed.”

The result was a set of contracts that were signed before the Government had understood what they wanted to buy and the suppliers had understood what they were expected to supply.

When the then Health Secretary John Reid—now Lord Reid—announced the contract winners in December 2003, the value of the contracts had already shot up to £6.2 billion from the original £2.3 billion mentioned by Mr Granger in Harrogate. The time scale had tripled in length, and instead of the two years and nine months from April 2003 originally promised—to which Sir John Pattison had been obliged to commit at the Downing street seminar—the contracts were now to run for 10 years. Later, one of the most senior officials in the national programme, Gordon Hextall, even claimed that it was always envisaged that the programme would run for 10 years.

Four winning bidders were appointed: Accenture; Computer Sciences Corporation, or CSC; Fujitsu and BT. They were known as local service providers, or LSPs. BT and Fujitsu picked a US software firm, IDX, to work with, while Accenture and CSC both picked a British software company called iSoft. iSoft was a stock market darling that had been spun out of the consulting firm KPMG in the late 1990s. The company’s flagship was a software system called Lorenzo, which was portrayed enthusiastically in iSoft’s 2005 annual report and accounts. The chairman, Patrick Cryne, told shareholders that Lorenzo had made “impressive progress”, while chief executive Tim Whiston stated that Lorenzo would be “available from early 2004” and that it had

“achieved significant acclaim from healthcare providers”.

With such promising statements from the company’s directors, the stock market was delighted, and it was no surprise that iSoft’s share price rose sharply. Mr Cryne, Mr Whiston and their fellow directors then sold large tranches of their personal shareholdings in iSoft, making around £90 million in cash. In 2004, Patrick Cryne bought Barnsley football club.

There was a slight problem. The flagship product, Lorenzo, which was described in such encouraging terms by the directors, was not finished. That caused a big headache for Accenture, the biggest LSP, with two contracts worth around £1 billion each. It was in partnership with iSoft and was trying to implement software that was basically not implementable. CSC faced a similar problem in the north-west. Under the Granger rules of engagement, no one was supposed to get paid until something was delivered. As iSoft had not produced a working version of Lorenzo, the brutal reality was that neither Accenture nor CSC had any software to deploy.

There were still big concerns about the programme’s indifference to securing clinical buy-in from users—clinicians in hospitals—even though numerous studies had pointed to such buy-in as the key ingredient for success in any IT project. Professor Peter Hutton wrote to the then chief executive of the NHS, Sir Nigel Crisp, to express his continuing disquiet:

“I remain concerned that the current arrangements within the programme are unsafe from a variety of angles and, in particular, that the constraints of the contracting process, with its absence of clinical input in the last stages, may have resulted in the purchase of a product that will potentially not fulfil our goals.”

Soon after pointing out politely that the emperor had no clothes, Professor Hutton was asked to consider his position, and he tended his resignation. The IT people were simply not interested in what the doctors were telling them. To give it belated credit, however, the Department of Health began to realise that securing the support and buy-in of clinicians who would have to use the systems might be a good idea.

In March 2004, the deputy chief medical officer, Professor Aidan Halligan, was appointed alongside Richard Granger as joint director general of NHS IT, and joint senior responsible owner of the programme, with specific responsibility for benefits realisation. That was welcomed by clinicians. One delegate at the Healthcare Computing conference in Harrogate said that Halligan’s appointment was “really, really good” because

“he has the trust of clinicians and can stand up to Granger”,

although a general practitioner delegate at the same conference said that it “spoke volumes” that nobody like him had been in the post earlier. Halligan acknowledged that not enough had been done to win the support of clinicians, whose buy-in, he said, was critical to the success of the project. Listening to clinicians was now the flavour of the month. However, there was one insuperable difficulty—the contracts had already been signed. As Professor Hutton later explained to the PAC,

“it became clear from discussions with suppliers in early 2004 that what they had been contracted for would not deliver the NHS Care Record”.

Accenture and CSC struggled on with the unusable Lorenzo. Eventually they commissioned a study that produced a confidential report in February 2006, which confirmed their worst fears. The report stated that the Lorenzo had

“no mapping of features to release, nor detailed plans. In other words, there is no well-defined scope and therefore no believable plan for releases.”

That was over five years ago.

In March 2006, Accenture announced to its shareholders that it would use $450 million to cover expected losses on the programme. It made repeated offers to the programme that it would meet its contractual obligations by using other software. However, that might have bankrupted iSoft, and Richard Granger was having none of it. He responded with a threat when Accenture talked about walking away. Referring to tough penalty clauses contained in the contracts, he said that

“if they would like to walk away, it’s starting at 50% of the total contract value”.

Accenture had two of the £1 billion-a-piece prime contracts, so it appeared to be facing a cool £1 billion in penalty payments to the Government if it abandoned the programme. Strangely, it did not work out that way. Accenture engaged in swift negotiations with the health service and in September 2006, after making a penalty payment of just £63 million, it duly exited the programme. Mr Granger’s threat, that if Accenture left the programme it would face gigantic penalty payments, proved to be of little account. There were rumours that if Mr Granger had demanded any more money, he would have faced serious and embarrassing counter-claims from Accenture for failures by the national programme to stick to its own contractual obligations.

CSC, with its own £1-billion contract for the north-west and west midlands regions, was in no better a position than Accenture to implement the unfinished Lorenzo software. It was also struggling to mop up after having caused the largest computer crash in NHS history, when its Maidstone data centre was hit by a power failure, followed by restarting problems. The back-up systems did not work, and data held in the centre could not be accessed. That meant that, for four days, 80 NHS trusts could not use their patient administration systems and had to operate as best they could with paper systems.

Another worry for CSC was its shareholders. Accenture had set aside hundreds of millions of pounds against expected losses and told the stock market accordingly, but CSC had done no such thing. In addition to its problems with losses in the UK, the company had troubles back home in the United States, where it faced allegations of corruption. The US Department of Justice had alleged that CSC was part of an alliance, which included virtually all the major sellers of hardware and software in the United States, that had swapped unlawful kick-backs in Government agency technology contracts. CSC finally agreed to a $1.37 million payment to resolve those allegations. That was reported on the news blog of Cnet.com on 13 May 2008, under the heading:

“CSC settles with feds over kickback allegations”.

In such circumstances, having extra contracts from the NHS might look reassuring to the US stock market. Despite the fact that there was no implementable software—Lorenzo still was not finished—CSC quickly took on both Accenture contracts, tripling its involvement in the programme. However, there were continuing problems at iSoft, which was supposedly writing the Lorenzo software. One of the problems related to the publication of iSoft’s financial results, which had been repeatedly delayed, up to the point where one of iSoft’s own advisers, Morgan Stanley, a brokerage, declined to publish a profit forecast, stating:

“We don’t feel we have enough visibility to offer a recommendation”.

With friends like that in the stock market, who needs enemies? Finally, iSoft was forced to declare a loss of £344 million, which wiped out all the company’s past profits. The Financial Services Authority launched an investigation.

Now, three fifths of the programme was dependent on one troubled local service provider, CSC, which was using a software supplier, iSoft, that was itself under investigation by the FSA. One regional contractor, Accenture, had been replaced by another, CSC, which had less experience. The central problem remained: the software that they had been trying to deploy, iSoft’s Lorenzo system, was still not finished.

In those circumstances, iSoft started to deploy software products that predated the programme, which Connecting for Health duly paid for. Those older products did not meet the specifications for the national programme. It is important to remember that fact, because that is what many acute hospitals have now been given—old and outdated software that was deemed inadequate nine years ago to meet the programme’s specifications.

Meanwhile, the other two providers, BT and Fujitsu, were having their own problems. They were trying to implement American software, which is not such an easy thing to do in a British hospital, because American hospitals rely on billing for each and every activity and do not, conversely, expect to have to handle waiting lists. An American software system cannot be just uploaded to an acute hospital main frame and be switched on—it is not that simple.

In June 2005, IDX was dropped by Fujitsu with Richard Granger’s consent and replaced by another American firm, Cerner, which had a software package for large acute hospitals called Millennium. BT, some 18 months after winning its LSP contract, was still struggling with IDX. By July 2005, BT was facing serious threats from Richard Granger that it could be axed if it did not start to perform. In an interview with Computing magazine, Mr Granger said:

“BT had better get me some substantial IDX functionality by the end of summer or some predictable events will occur.”

However, it was not that simple. As the leading health care IT website, e-Health Insider, pointed out, replacing BT as the local service provider

“would represent a major failure for the programme, and raise questions over the whole IT-enabled NHS modernisation”

and lead to even more delays. The website added:

“Such a move would also potentially raise serious questions about whether the adversarial management style of Connecting for Health is the most likely to deliver new systems that provide clinical benefits to patients in a timely and cost-effective fashion.”

BT was allowed to continue as the local service provider and eventually, with Granger’s consent, it was allowed to follow Fujitsu’s lead and replace IDX with Cerner Millennium.

At a London conference in July 2005, Mr Granger gave a stern warning to suppliers who were lagging behind on delivery:

“We will get very soon to a point where they will either come good with what they’ve got, or they will get a bullet in the head.”

Mr Granger was also showing signs of defensiveness about the programme, stating:

“It might be a policy disaster, but it isn’t an IT disaster. The system was delivered to spec”,

and he gave the example of the electronic staff record. He added:

“If some of my colleagues do not think sufficiently through as to what was wanted then it’s a specification error.”

Such statements by Mr Granger led to howls of rage from some industry observers, including one who, after Granger’s speech, posted a comment on the e-health Insider website, saying:

“Now and then I check myself from hatred of what Richard Granger stands for and has done to NHS IT, and then the sheer arrogance and ignorance of his public statements brings me back. He set the ridiculously short timescales for decision-making, procured before there was a clear idea of the scope, handed all the ‘choice’ from NHS clinicians to private contractors. CfH”—

Connecting for Health—

“hasn’t solved the funding crisis for computerising the NHS, rather landed us with a massively expensive way to do what some of us were achieving already”.

Meanwhile, the National Audit Office had embarked on a study of the national programme, which was due to be published in summer 2005, but there were considerable delays. As Members may know, NAO reports involve a clearance process, during which a report’s factual content is cleared with the Government before publication, and that has benefits for both sides. However, something different happened with the national programme report. It was as if Connecting for Health wanted to use the clearance process to expunge the slightest criticism of its activities. It undertook a war of attrition with the auditors, in a process that the NAO later described as fighting

“street by street, block by block”.

The final report was delayed again and again, and it finally appeared in June 2006. It was much weaker than seasoned health IT observers had expected. The Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), who was then a member of the PAC, described it as “easily the most gushing” he had read, while a BBC correspondent described it as a “whitewash”. Most of the key criticisms were eventually excised, as Granger and his team ground down their opponents. It later emerged through freedom of information requests that earlier drafts had been much tougher.

Tom Brooks, a management consultant with years of worldwide experience in health care, wrote a devastating submission to the PAC, in which he questioned the whole rationale for central procurement in the programme. He said that

“the poor quality of the negotiation of the NPfIT contracts by Mr Granger”

was a subject of criticism. He described the view that central procurement would produce systems that met local requirements as “a fundamental error”. He told the Committee:

“MPs are mis-informed if they view the central infrastructure as making reasonable progress”.

Dr Anthony Nowlan, whom I mentioned earlier, described the programme as “back to front”, given that the contract stating what would be produced had already been let. He pointed out the sheer absurdity of a consensus document produced by the programme stating:

“Now that the architecture for England has been commissioned, designed and is being built, there is a need for clarity concerning how it will be used”.

A group of health IT experts sent the PAC a detailed paper offering a devastating critique of the entire programme. The group provided evidence that it was likely to deliver neither the most important areas of clinical functionality nor the benefits required to justify the business case. The group simply stated:

“The conclusion here is that the NHS would most likely have been better off without the National Programme in terms of what is likely to be delivered and when. The National Programme has not advanced the NHS IT implementation trajectory at all; in fact, it has set it back from where it was going”.

In view of the frequent misunderstandings about the national programme among so many journalists, broadcasters, politicians and commentators, it is worth quoting the expert group’s document at some length. It starts by saying:

“It is useful to begin with the question: What is the central point of NPfIT—its chief raison d’etre? Is it a shared medical record (otherwise known as the ‘Central Spine’ or ‘Central Summary Care Record Service’) across England?

The answer to this important question is simply: no…the central point of NPfIT is to provide the local Care Record Service...Compared with the local CRS, the Central Spine is a much lower priority because it is totally speculative and even if delivered is likely to result in very little clinical benefit…This is a subtle but critical point. The Local CRS systems…are a proven technology…These local CRS systems have always been costly investments (several million pounds per hospital over several years) but have been proven in the NHS and elsewhere to deliver real clinical benefits…This picture is entirely different for the so-called Central Spine record, or Central Shared Summary record, which NPfIT (and the government ministers) would like the public to believe is the central point of NPfIT. It is not. The Central Spine record is just a concept…The problem is that clinicians have told us medicine does not work like this. Clinicians do not just use a summary record to deliver care. They build and depend upon detailed and specific medical data that are relevant for each patient.

They do not rely on some other clinicians’ definition of what will be most relevant to put in a summary record. What is relevant clinically will inevitably vary from patient to patient.

The concept of a summary Central Spine record has no scientific basis and no significant clinical support to back it up—just an overly simplistic and naïve storyline about a Birmingham patient falling ill in Blackpool. In fact, no one has ever provided any figures on how often this situation is likely to arise to show whether or not the investment in the Central Spine record is worthwhile.

The point here is that the Local Care Record Service”—

I emphasise the word “local”—

“is the essential building block for clinically useful health IT to support clinical care in progressive, modern and proven ways. Yes, it is difficult to implement and can take 2-3 years to roll-out across the whole hospital (or organisation), and yet it is always worthwhile…These Local Care Record Service systems are the building blocks and are the point of NPfIT, and what NHS Trust Chief Executives want, need and expect. They are not waiting for a Central Spine record to run their hospitals.

However, the Local Care Record Service systems (or the Local Service Providers’ newest versions of them) are not likely to be fully deployed now (only the rudimentary patient administration elements of them will be) because NPfIT is putting in old ‘legacy’ products in place of new modern Local Care Record Service products in its panic to show deployment and because the systems have been so late in being delivered by the LSPs”—

the local service providers. The document continues:

“The key point of the National Programme for IT is to provide both depth of clinical systems functionality and breadth of integration in terms of delivering the contracted Local CRS functions across organisations and care-settings (acute, primary, mental health, social services).

This is the true vision of health IT promised by the National Programme which is embodied in the Local Service Provider contracts and it is what their price reflects.”

The trouble is, with all the delays, the LSP schedules are being down-scoped behind the NHS’s back and without any accountability to the local NHS Trust chief executives to whom the original vision was promised.”

In September 2006, with the hon. Member for Southport (John Pugh), I published a paper called “Information technology in the NHS: What Next?” In it, we identified four fallacies and offered a way forward. The fallacies were that

“Patient data needs to be accessible all over the country…Local trusts can’t procure systems properly so the centre has to do this for them…Large areas of the NHS need to work on a single massive system”

and that the

“National Programme saves money.”

The suggested way forward was to allow hospital chief executives to buy the systems they actually wanted, subject only to common standards, and to fund such purchases partially from the centre, while making local chief executives contractually responsible for delivery.

Shortly after we published that paper, the NHS chief executive, David Nicholson, introduced the NPfIT local ownership plan, but it did not follow our suggestion of giving local chief executives autonomy in what they bought. Under the NLOP, hospital chief executives would still be required to buy the software that the local service provider was contracted to provide—the difficult-to-install American system, Cerner Millennium, or the non-existent Lorenzo.

Furthermore, instead of there being one senior responsible owner for the programme, which is a central tenet of good project management practice, there would be many dozens of senior responsible owners dispersed among the different primary care trusts, strategic health authorities and hospitals across the country. Those bodies were given responsibility for implementing and delivering software that was not available or which did work properly, without a free choice to buy something else that did work. The NLOP looked more like an attempt to decentralise impending blame than a serious attempt at reform. That is why Tony Collins, one of the country’s leading computer journalists, playfully said that NLOP actually stands for “No Longer Our Problem”.

In February 2007, Andrew Rollerson, a senior Fujitsu manager who had assembled and then led the winning Fujitsu team in the original bid process, mentioned more or less en passant at an IT conference that his view of the national programme was that

“it isn’t working and it isn’t going to work”.

To many informed observers, it was just a statement of the obvious. The PAC called him to give evidence, and when asked if he felt that he had been the

“one who let the finger out of the dam”

and allowed

“a whole collective sigh of relief”

to go round the health IT sector, he replied

“I think that is absolutely spot on.”

Fujitsu then wrote to the Committee stating that Rollerson was not a senior executive of the company and had not been involved for a long time, but neglecting to mention that he had led the winning bid team.

By 2007, another accounting probe had been launched into iSoft by an accounting standards body, and in the following month, April, the PAC published its report, which concluded that

“at the present rate of progress, it is unlikely that significant clinical benefits will be delivered by the end of the contract period”.

By June 2007, Richard Granger had announced that he would quit at some point and shortly afterwards stated that he was “ashamed” of some of the systems put in by Connecting for Health suppliers, singling out Cerner for criticism. David Nicholson, the NHS boss, appointed several new senior executives to join Granger at the top table, while continuing to reject calls for a full review. Tony Collins wrote in Computer Weekly that the future of the national programme for IT in the NHS was “hazy” and that it was becoming

“difficult to delineate success from failure”.

Derek Wanless, whose major review for Tony Blair into the future of the health service had first identified investment in IT as an area for improvement, publicly questioned whether the NHS IT programme should continue without a full audit. He said that

“there is as yet no convincing evidence that the benefits will outweigh the costs of this substantial investment”.

In October 2007, the Department of Health rejected rumours that Matthew Swindells had been appointed interim chief executive of Connecting for Health, but in an industry survey he was named the 12th most influential person in the NHS—10 positions above Richard Granger. It appeared that Richard Granger’s influence was on the wane and that he was being eased out. Tony Collins mused on his blog that the programme might be even worse without Richard Granger—

“the thought of this juggernaut being without a driver is even more scary that when it had a driver but no controls”.

Mr Granger’s last day as an employee of the NHS was 31 January 2008, though, curiously, it was a week, on 6 February, before the interim director of NPfIT and systems delivery, Gordon Hextall, sent a letter to Connecting for Health staff to tell them that Granger had gone and that two appointments would replace him: a top-level chief information officer and a director of IT programmes and systems delivery. Meanwhile, the interim chief information officer would be none other than Matthew Swindells, whose involvement the Department had denied earlier.

In February 2008, the Commons Health Committee published a report on the electronic patient record, which stated that it was “dismayed” by the lack of clarity about what information would be included in the summary care record and for what the record would be used. It also said that there was “a stark contrast” between the “specific and detailed” vision set out for the integrated care records service in 2003 and the “vague and shifting” vision set out in 2007. The Committee concluded that there was now a

“perplexing lack of clarity about exactly what NPfIT will now deliver.”

In May 2008, the NAO published a progress update, which was much more robust than its earlier report. It concluded that the programme has

“largely failed to deliver on its central objective of detailed care record systems for acute hospital trusts”.

Not a lot was happening at that point because there was no software to deploy, so many people were employed but they were not necessarily doing very much. In October 2008, Nick Timmins of the Financial Times wrote about the national programme in a front-page story:

“Progress has virtually ground to a halt, raising questions about whether the world’s biggest civil information technology project will ever be finished”.

He quoted Jon Hoeksma from e-Health Insider who said that

“the key part is stuck”

and added that hospital chief executives did not want to take the system

“until they had seen it put in flawlessly elsewhere”.

The second PAC report, published in January 2009, concluded that the programme’s failures raised questions about the feasibility of the whole project and that the central contracts—the enormous local service provider contracts—were an encumbrance. Only nine months into his job, Matthew Bellamy quit as the chief information officer’s right-hand man. Just before Christmas 2009, the then latest Health Secretary, the right hon. Member for Leigh (Andy Burnham), gave an interview in which he sang the praises of the national programme and said that

“parts of the NHS cannot operate without it”.

Unfortunately for him, the then Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), took a different view—and said so in a television interview a couple of days later. He said that the national programme was

“not essential for the front line”

and announced that he was imposing a £600 million spending cut that took its budget down from £12.7 billion to a mere £12.1 billion.

Meanwhile, new year 2010 was not a happy one for the iSoft directors. The Financial Services Authority—the chief City regulator—announced that it had laid criminal charges against four former directors of iSoft: Patrick Cryne, the founder and former chairman; Timothy Whiston, the former chief executive; and former directors Stephen Graham and John Whelan. They were accused of conspiracy to make misleading statements. The four denied the charges.

Where are we now? We have yet another NAO report, published on 18 May this year, which states in even more bald terms that

“the aim of creating an electronic record for every NHS patient will not be achieved under the Programme.”

The central aim of the programme will not be achieved under the contract. Several conclusions regrettably emerge about Connecting for Health. The first is about overpaying. It massively overpays: acute trusts are costing £23 million, when they should be about £8 million; the system for mental health and community trusts—RiO—is costing £8.9 million per deployment, when it should be about £1.5 million; and the other systems, such as the picture archiving and communications systems for digital X-rays—PACS—and N3 broadband, which everyone says is not particularly good anyway, are also massively overpriced. I should say in parenthesis that the digital X-rays are very good, but Connecting for Health should not have paid so much for them.

The second conclusion is on de-scoping. Connecting for Health has dealt with the problems it has faced by drastically reducing the scope of what is being delivered, but without corresponding reductions in cost. The third conclusion is the hiding of increased costs. The late deliveries meant there have been no running costs for systems that have not been delivered, and the surplus cash is being used to hide the increasing cost per deployment.

Fourthly, there are serious doubts about the commercial judgment and skill of Connecting for Health. It seems that every contract revision makes things worse. Very little of the originally expected system has been delivered, but despite that, the NHS seems to have little or no commercial cover. The Fujitsu termination, when it was fired from the programme, was farcical and generated massive potential costs and liabilities. The local service providers appear to be running rings around Connecting for Health commercially. As the Financial Times noted on 25 May this year, CSC is offering a one-third reduction in the cost of its contract in return for doing two-thirds less work. As the Cabinet Office observed, that would roughly double the cost compared with the original agreement.

The fifth conclusion is the danger of future high costs. When the contracts finish, there is inadequate provision to manage the systems in future. It takes a special skill to leave trusts stuck with systems that are functionally very poor and out-of-date, which were not deemed adequate nine years ago, and still manage to expose them to enormous future costs over which they will have very little control. That is precisely what Connecting for Health is managing to do. Finally, there is a serious danger that Connecting for Health will put CSC in particular in a monopoly position. The proposed revised agreement may be open to legal challenge from other suppliers who have not had the chance to bid.

What should happen now? It is plain that the NHS IT programme has not worked and there is no evidence that it will work. Rather than squandering another £4 billion to £5 billion, which is still unspent, the NHS should recognise reality. Connecting for Health has failed to achieve its central purpose and should be closed down. I am afraid that it will not help and is now more interested in the preservation of its own position than in protecting the interests of taxpayers. NHS trusts must be set free to choose the systems that meet the needs of patients and medical professionals. They should have the power to source products locally that suit their needs, subject only to common standards.

11:38

[John Pugh (Southport) (LD)]

I congratulate the hon. Member for South Norfolk (Mr Bacon) on securing the debate. In this field, he is very expert, persistent and learned, and I believe that he is writing a book on the subject—I shall give him a plug because he is too modest to do it himself. We have both followed the debate for a fairly long time. We have had Commons debates and there have been PAC sessions on the subject. We have attended meetings with Mr Granger and been to numerous conferences. We have even sat in Richmond house and watched the Lorenzo system work—it proved to be a little more difficult to get it to work in a hospital in real time, but none the less it looked good when we saw it.

I do not want to sketch out the sorry history, as the hon. Member for South Norfolk has done so most lucidly. Everybody in the Chamber realises that it was a procurement disaster, and a project management disaster. It did all the things that are not supposed to be done, such as failing to shift risk to the private sector, failing to be clear about the actual benefits, failing to involve practitioners and stakeholders, and failing to control costs. It was a bright idea, but it was not realistically assessed and ultimately had to be scaled back.

Much of it, as the hon. Gentleman said, might have happened anyway. The good side of it, if I can so describe it—the PACS, e-prescriptions, improved broadband access, telemedicine and so on—might well have happened, and we ought to recognise the fact. However, the project would not have done well in front of Alan Sugar on “The Apprentice”, let alone the Public Accounts Committee. That is history, however, and to some extent we must now consider the present.

We are in unprecedented times of cash restraint, and we have to find £20 billion within the health service over the next few years. I doubt whether we will succeed, but we cannot abandon that target. Twenty or so hospitals will not achieve foundation trust status, and we cannot magic away their PFI debts or ignore the consequences that flow from dodging difficult reconfiguration issues. However, as we roll out Connecting for Health, the cost certainly matters. I believe that some of the costs, particularly those of the patient administration systems, are still being picked up by the ailing hospitals.

It is not easy to see how current health reforms will ease matters, as they will increase the diversity of providers and complicate somewhat the recording of data, as providers do it in different ways. That will add to the potential problems of data sharing and interoperability. Ultimately, we will require some merging of social care and medical records, and the changed landscape will necessitate appreciable changes in the choose and book system. I do not know whether we will be transferring or binning the existing IT programmes of PCTs, but it could be said that what we originally designed is now inappropriate—that NPfIT, an awful pun, no longer fits.

I believe that the Government have done all the sensible things in response to a difficult situation. They have allowed NHS trusts to adapt and develop existing systems. They have emphasised open standards and interoperability, and continue to do so, in order that we can have variety without undue chaos and do not end up being captive to a major supplier. That is the ultimate nightmare, and it was a big fear throughout the process. Indeed, although Granger tried to prevent it, it seems that he could not. The Government have sought to reduce and shave costs through negotiation or by cutting back on specifications. However, there appear to be a few problems with what is otherwise a sensible strategy.

First, I understand that, in these difficult circumstances, some of the key managers of the programme are to be the chief executives of strategic health authorities, but when they have gone I have no idea who will persist with the task and take up the burden. Secondly, savings within the NHS will lead to many of the much-maligned back-office staff going, and I presume that that will include NHS client-side IT people. The loss of client-side expertise will be a big worry, as it will make us even more dependent on the expensive consultants who got us into this mess. I note that McKinsey was pivotal in advising us to go ahead. I note also that, to this day, McKinsey has its feet well under the table in Richmond house, and is advising the Government on a number of problems.

The big problem, however, appears to be that we do not seem able easily to extricate ourselves or to revise contracts. Everyone agrees that that is necessary at the moment. Rather, I should say that we seem unable to do so without making matters worse. We seem doomed to spend another £4.3 billion, yet we need to save a further £20 billion. The fatal breakfast that Mr Blair had with the IT industry in February 2002 has come back to haunt us. Mr Blair might have been worried about his legacy, but it is now a worry for us.

I understand through the grapevine that this was a matter of heated debate at the last meeting of the PAC, which was a rather rumbustious affair. I saw Mr Nicholson shortly after that meeting, and I have to say that his account of events differed slightly from that of some hon. Members, in terms of how satisfactory an occasion he thought it was and how far they had got in their Socratic examination of the flaws. However, it seems that he and we are trapped between a rock and a hard place, and that there is not an easy way out.

The dilemma is not only ours; it is one also for the IT industry. The industry can help us to meet the Nicholson challenge, or it can compound it. It can work ever more closely in areas such as telemedicine and so on, and on how to produce genuine cost savings, including on the implementation of IT; or it can simply go on as before, selling us more kit that we do not need and software that we cannot use. If that is the industry’s choice—it is the industry’s choice as much as ours; we have to throw down the challenge to suppliers—it will face years of adversarial attrition as we try to cut costs, presumably followed by bad feeling and empty order books, and endless fulmination from the hon. Member for South Norfolk, who becomes increasingly frustrated as the drama continues. However, the industry could accept that it is a collective problem.

It is a very big collective problem, because at some point in time it will throw into stark relief what we do with the summary care record, which has less utility than we ever imagined and more complexity than we ever realised.

[Ian Swales (Redcar) (LD)]

As a member of the PAC who was present at the rumbustious meeting to which my hon. Friend referred, I gained the impression that the suppliers were completely unprepared to consider the correct option of considering things differently and trying to be positive. It seemed that they were prepared to protect their positions to the hilt, which is partly why it was a rumbustious sitting. Does my hon. Friend have any advice on how to change the attitude of the suppliers?

[John Pugh]

Given that, uniquely in the UK, many suppliers are dependent on Government contracts in the long term, they have a stark choice between pleasing their shareholders and pleasing their long-term customers. They must recognise that. However, I am not sure how to achieve that while doing anything useful with the summary care record. I suspect that that may be a matter for another debate—and possibly a longer one.

11:47

[Jackie Doyle-Price (Thurrock) (Con)]

I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing this debate. I pay tribute to his tenacity in pursuing the subject. I know that he has a long-standing interest in it, and rightly so given the amount of money being spent on the project. I cannot compete with the way in which he articulated his case, or with his forensic and almost anorak-like knowledge of the subject, but I associate myself with the conclusions that he draws.

The project has always been over-ambitious. We would all agree that it has been poorly led and ineffectively delivered. As with many procurement projects in the public sector, the cost has escalated considerably. We have seen it happen too many times, and it is always entirely predictable. Indeed, senior leaders in the NHS were warned about that from the start.

The intention to ensure that health data should be made available at any time and anywhere was laudable, but delivering it has to be offset against the cost and whether it offers good value for money. Clinicians, practitioners and IT specialists throughout the NHS said that it would not work. Ultimately, clinicians will find their own way of doing things, and a top-down system will not work unless it is executed from the bottom up. As my hon. Friend explained, the decision to involve clinicians in the design of the system was not taken until late in the day and probably beyond the point when they could have had a useful input to ensure that the programme was fit for purpose.

Let me underline what my hon. Friend said. If we look at the initial programme of delivery and what we have achieved, we can see that we have not progressed far. Of the 4,500 sites that were contracted to receive the system, some two thirds have yet to receive anything. If we examine the progress made by Computer Sciences Corporation—my hon. Friend has outlined the history of its involvement with this case—we will see that it is contracted to deliver its systems to 97 hospitals, but so far it has delivered only four and none has been able to confirm that the system has been installed satisfactorily. Put simply, CSC has not delivered the goods against its obligations on the contract.

Once the contract is in place, everyone signs up even though it is quite clear that the company is not delivering what it promised. To be fair, in this case, the NHS started to renegotiate the contract in December 2009. None the less, more than 18 months later, no new contract or renegotiated contract is in place. CSC is still working on the same terms that it initially agreed to and we still do not have adequate delivery.

The NHS was quite clear when it said that it would not sign a new contract until it could see that Lorenzo was working. It is clear that we have to take some tough decisions because it simply is not working. As it is taking so long, we have to decide whether we are managing the project efficiently. Just how poorly does a contractor have to perform before a serious charge is made as to whether that contract should be maintained?

The NHS is an extremely powerful client. I know that suppliers have duties and obligations to their shareholders, but surely maintaining a good relationship with a customer that is as big as the national health service or even as the Government is important. We would expect suppliers to be slightly more conscious about what they are obliged to deliver.

[Duncan Hames (Chippenham) (LD)]

I listened very carefully to the initial speeches in this debate. The story that I heard was that there are suppliers and contractors who have fallen by the wayside and who have been shot and had their business fed to the others. That leaves us with the dilemma of what happens if we are left with only one supplier. Where does that leave the bargaining position of the NHS? My hon. Friend will find that there have been contractors who have found that they were not going to get paid because of their inability to deliver on their contracts.

[Jackie Doyle-Price]

My hon. Friend makes an extremely good point. To be fair, those suppliers have acted extremely honourably with regard to their obligations under the contract. When it became clear that they could not deliver the software under Lorenzo because it was not fit for purpose, they took the honourable action and negotiated their way out. Such behaviour shows a lot about those suppliers. It is increasingly worrying that CSC in particular is finding itself in a monopoly position because it has acquired and strengthened its shareholding in iSOFT. Who we negotiate with in the future is a long-term worry.

I associate myself with the conclusions of my hon. Friend the Member for South Norfolk about when we should take a decision on this project. Is it time for an emperor’s new clothes moment, or are we going to continue throwing good money after bad in a project that is clearly not going to deliver?

[John Pugh]

Is it not enormously hard for parliamentarians to form a judgment on that when we are not party to the actual contractual details? We do not know what cancellation involves for the firm or for the development of the project.

[Jackie Doyle-Price]

That is a good point. I was coming on to say to the Minister that he must examine this matter with considerable rigour before deciding on the right course. The message that we got from the Department was that such contracts are complex, although it was rather unclear just how complex this one was. I urge the Minister to achieve maximum value for money because ultimately this is a lot of money that could have been spent on patient care rather than on delivering this programme.

My final point relates to how these big procurement projects should be managed. We have examined a number of them on the Public Accounts Committee. Too often we find examples of poor project management. Poor leadership is assigned to these projects, which then go on to spend incredibly large amounts of taxpayers’ money.

When Sir David Nicholson appeared before the Committee, he was unable to answer a number of questions that my hon. Friend the Member for South Norfolk put to him even though he has been the senior responsible owner of the project since 2006. Until the machinery of government can put in place good project management disciplines to deliver effective leadership, we will continue to spend a lot of money and to fail to deliver on the intended project. I hope that this is a lesson not just for the Department of Health but for the Government as a whole and especially the Cabinet Office as it looks at how it delivers these projects and puts in place good disciplines, so that this unhappy experience is not repeated.

11:56

[Neil Carmichael (Stroud) (Con)]

I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on the important and fascinating debate. The detail he went into about the past 10 to 15 years was striking.

[Annette Brooke in the Chair]

There are some key issues that we need to consider. Procurement on this scale has to be properly thought out. The purposes of the project itself have to be properly defined. The question of value for money is obviously a key one. Let me go back to the introduction of the fax machine to illustrate my point. When the fax machine was first launched, lawyers found it difficult to accept that instant results could happen. They went through court cases to test the validity of a fax result, because it could deteriorate and so on. None the less, the problems had little to do with the technology and rather more to do with the culture of lawyers. There is a thread running through this whole sorry episode. We need not only better information sharing in the NHS, but the right culture and desire for it. Above all, we need a real reason for the system. I have been to one or two meetings about this whole scheme, and I have never yet really heard a proper description of its central purposes, except of course to exchange information. Obviously, one of the purposes is integration. I am talking about integrating the systems and the parts of the NHS that need to talk to each other rather more than they do at the moment.

Yesterday, I went to the Care Week event in the Jubilee Room and I met several carers, all of whom had similar stories to tell. One said, “The person I have been caring for has been going to two departments, but neither of them knew about each other.” That is the sort of cultural issue that we must tackle and think about when we talk about IT. The real danger about IT is that people think it is a good idea so they must use it and apply it, but it is actually the other way round. We must be careful and set out the proper parameters and purposes for this IT project, and ally it to value for money. My hon. Friend’s story shows that that has not been happening. We need to be much more careful about procurement, setting out commissioning requirements, understanding the need for cultural change, and properly looking at these contracts.

11:59

[Liz Kendall (Leicester West) (Lab)]

Thank you for calling me, Mrs Brooke. It is a pleasure to serve under your chairmanship and to take part in this important debate.

I want to start by paying tribute to the hon. Member for South Norfolk (Mr Bacon) for his tireless work on this issue. His determination and tenacity in highlighting the problems and difficulties of a national programme for IT have been second to none. He frequently made the life of the previous Government difficult and I am sure that he will also be a thorn—perhaps a constructive thorn—in the side of the current Government. In his work, he has demonstrated the importance of effective parliamentary scrutiny and the difference that a Back-Bench MP can make. As a new MP, I hope to learn from his experience and follow, at least in some ways, his example.

The reason for the debate’s importance is that effective IT can and must play a key role in improving both the quality and efficiency of health care. At its best, IT helps clinicians and patients share information about the quality of services that are available, which not only supports patient choice but improves standards of care. Good IT can also help patients to get care in different parts of the system without having to give the same information repeatedly about their conditions and treatments to different doctors and nurses. In addition, it can help clinicians and managers to develop more effective and efficient services, organising treatments and services around the needs of patients rather than vice versa.

As the hon. Member for Thurrock (Jackie Doyle-Price) rightly pointed out, one of the key challenges facing the NHS is to ensure that GPs, their primary care teams, social care professionals and specialists work much more closely together, so that care is more effectively co-ordinated. Indeed, the NHS Future Forum said yesterday:

“Better information systems and the development of more integrated electronic care records will be a major enabling factor for this.”

The national programme was meant to help the NHS secure those objectives. However, as the hon. Member for South Norfolk has eloquently outlined and as countless reports from the National Audit Office and the Public Accounts Committee have also shown, the programme has fallen far short of achieving them. There were poor specifications about what was required by Government and what suppliers could deliver in return. In addition, as the hon. Members for Thurrock and for Stroud (Neil Carmichael) have said, there was over-claiming by both sides about what could be delivered and by what date. Furthermore, there were poor lines of accountability and responsibility for the programme, at least in its initial stages. All of those problems have led to one delay followed by another and, crucially, to a lack of control over costs.

I do not intend to go over those problems in detail. My knowledge of the subject is nowhere near as comprehensive or forensic as that of the hon. Member for South Norfolk. Instead, I want to take a step back and suggest three broad lessons that need to be learned from the problems of the national programme, as part of a constructive contribution to the Minister that he can take forward in his thinking on this subject.

The first lesson is that any IT system, whether it is in the NHS or elsewhere, must be led by its users. In the case of the NHS system, it must be clinically led. That is not only about getting clinical “buy-in” but about ensuring that doctors and nurses directly shape and develop the IT system so that it helps them do their job properly for the sake of patients.

NHS clinicians have said that they want IT to achieve five key objectives: first, allowing information about appointments to move around within hospitals, and between hospitals and the rest of the NHS, so that appointments can be booked; secondly, communicating information about discharges from hospital to hospital, and from hospitals to GPs and community services, so that staff in all parts of the system know what conditions patients have; thirdly, allowing staff to book tests such as MRI scans, ultrasounds and so on, and to get the results back to the patient and their clinician at the right time and in the right place; fourthly, the ability to schedule all the different tests, treatments, operations and so on that a patient has in a way that meets the needs of the patient; and finally, enabling electronic prescribing of drugs and the gathering of necessary pharmaceutical information to ensure that patient care is as safe and effective as possible.

Those five key objectives emerged from a consultation exercise with clinicians in 2008. However, as the hon. Member for South Norfolk has said, that was too late; the consultation exercise should have happened before the contracts were signed and not halfway through the process.

Can the Minister say how the Government will ensure that clinicians continue to be involved in developing the IT strategy for the NHS? Did the NHS Future Forum consider the IT strategy as part of its recommendations to Government? I ask because there was only one small line on the IT strategy in that report. Also, have the Government received any specific responses on this issue and, if so, will the Minister publish them?

On a related point, can the Minister say when he will publish the Government’s information strategy? In October 2010, the Government published “Liberating the NHS: an information revolution”. That document set out the Government’s plans to ensure that patients, the public, clinicians and managers have the information that they need to improve health and health care. I do not agree with some of the tone of that document; it seemed to suggest that the previous Government had done nothing on the matter. When Labour was in government, we acted on he issue. For example, if one considers a programme such as NHS Choices, to which there was quite a lot of opposition at the time, one can see that we moved the agenda forward. Having said that, I absolutely agree that we all need to go further.

My concern is that the consultation on the Government’s information strategy closed six months ago today. In that time, the Government could have provided more information to patients and the public to improve choice and quality. When will that strategy be published?

The second lesson that we can learn from the national programme is that we cannot have a one-size-fits-all IT system in the NHS, or indeed in any health care system. As Sir David Nicholson, chief executive of the NHS, told the PAC on 23 May, attempting to provide one type of medical record that covers everything for everybody everywhere in the country “has proved unworkable”. The challenge is striking the right balance between what—if anything—is delivered centrally and nationally, and what is delivered locally. That is a perennial challenge in all parts of the NHS and needs to be thought through.

The national programme is currently being reviewed by the Cabinet Office’s Major Projects Authority. On 18 May, the Minister told Radio 4’s “Today” programme that he wants to allow local hospitals to adapt their existing systems rather than to get rid of them altogether or, indeed, to scrap the national programme for IT. Last month, David Nicholson told the PAC that the Department of Health wants to move towards a situation whereby hospitals have their own direct relationship with software suppliers and where individual organisations take responsibility for their IT. However, he also said that, with all the reorganisation of the NHS that is going on, we need an interim step, a transitional body that will

“look very similar to Connecting for Health”.

He said that it was very important to have that body,

“to enable us safely to transit from where we are at the moment to a place where individual organisations take responsibility.”

I would like the Minister to explain a few things. What is that transitional body? Who will be responsible for running it? How much will it cost? How will it be different from Connecting for Health? At what stage will it disappear and how? Finally, if a national, centrally led programme has been part of the problem in the past, why will this new national, centrally led body somehow deliver the future when individual trusts are in control?

The final lesson that must be learned relates to a point that the hon. Member for Stroud made, which was about a much bigger problem for Government than the other problems that I have mentioned. How do the Government have an effective relationship with the private sector in contracting with it, not only in relation to IT projects but to all sorts of other projects? I am thinking, for example, about the problems that the Ministry of Defence has experienced with its contracting. Successive Governments have found it extremely difficult to negotiate effective contracts with the private sector, and not just IT contracts. It is fair to say that they have not exactly covered themselves in glory in that respect.

[Duncan Hames]

Will the hon. Lady reflect on whether one reason why Governments have such difficulty in controlling contracts with the private sector is that politicians routinely make policy changes that alter the specifications for what is required, and contracts are not able to accommodate that? I wonder what lessons she might learn if we looked, for example, at how the choice agenda was rolled out in the NHS during this period, and at the demands that that placed on changing requirements for private contractors.

[Liz Kendall]

The hon. Gentleman makes a very important point about the nature of the political process, with politicians frequently determined to fill the newspapers with headlines about new policies, while the difficult process of implementation takes far longer on the ground. When I had the privilege of working in the Department of Health, I saw the NHS Choices project and thought, “This doesn’t look like what I thought the politicians meant. It wouldn’t give me, as a patient, the information I needed about which consultant or hospital to choose.” There is, therefore, the problem of how about we go from a political idea to a policy on the ground, and how quickly that changes.

With the greatest respect to the civil servants sitting in this room, we have perhaps not thought through effectively what kinds of skills and experience are necessary in Departments. What steps has the Minister taken since the Government were elected to ensure that the Department of Health has people with the right skills and experience to deal with such high-level negotiations? Have the Government as a whole decided to look at that issue? Has the Cabinet Secretary, Sir Gus O’Donnell, considered how best to ensure that there are people across the whole civil service with the skills and experience that politicians urgently need to support them in their work?

I thank all Members for their contributions today. This is a very difficult subject, and we need to find a way through that does not waste more taxpayers’ money but understands that IT and information are crucial to improving health and health care. The key issue is how we get there.

09:59

[The Minister of State, Department of Health (Mr Simon Burns)]

It is a pleasure to take part in this debate under your chairmanship, Mrs Brooke.

I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing this debate. His forensic analysis of what has happened over the past decade or so made it clear that he has a justifiable reputation as a leading expert in the House on the subject, and it is due to his tenacity that things are done and things are found out, and that we can be kept on our toes through the legislature holding the Executive to account. In a mood of bonhomie, I also congratulate the hon. Member for Leicester West (Liz Kendall) on her tribute to my hon. Friend. That was particularly magnanimous of her because, for the vast majority of his 40-minute speech, he was criticising her Government’s performance in creating the situation we are in, and for the mistakes and problems that have flowed from the decisions taken at the beginning of the century.

I agree that IT is crucial to a modernised NHS. We need to be able to record, store and exchange information if we are to realise our ambition of having health outcomes that are consistently among the best in the world. The previous Government’s centrally driven, top-down vision of NHS IT began in 2002, and the original title was “Delivering 21st century IT support for the NHS.” Sadly, however, the vision took an approach that was more akin to the early post-war years of the 20th century. It was clear to us, even before we took office, that the approach made little sense, and that to deliver a modern health service we needed a more flexible and locally driven approach—a view shared, ironically, throughout the NHS.

Last September, I announced that we should no longer talk about a “national programme for IT”:

“Improving IT is essential to delivering a patient-centred NHS. But the nationally imposed system is neither necessary nor appropriate to deliver this. We will allow hospitals to use and develop the IT they already have”.

So, rather than the old “replace all” strategy of the previous Government, we favour a strategy of “connect all.” It makes no sense to rip out and replace systems that trusts already successfully use, and we have, therefore, put local NHS organisations in control of introducing new systems. Rather than a single national programme, we should view the strategy as a series of related projects, categorised under national infrastructure, national applications and local services.

It is clear that, over the years, the scope of the national programme expanded, but it is now vital that we focus our investment and energies on the things that will make a difference to the quality of care. We asked clinicians what they wanted from NHS IT systems and they came up with five things that they believed were critical to them and their ability to carry out their duties. They were: a patient administration system that integrates with other systems and provides sophisticated reports; order communications and diagnostic reporting; letters with coding for patient discharge, clinics, and accident and emergency; scheduling for beds, tests and theatres, and e-prescribing. In addition, we are focusing suppliers on key departmental systems, such as those needed to support maternity, child health and accident and emergency, which, taken together, will make a significant difference to the experience of patients and the working practices of clinicians and managers.

At the same time as changing the approach and scope of the programme, we have closely examined its costs. There is little we can now do about the money that has already been spent, but we have been able to reduce the cost forecast from 31 March 2010 by £1.3 billion— about 18%. The savings will come from the companies supplying services, from reduced local costs and from our internal overheads in managing the programme. Suppliers will reduce their costs by £670 million, local costs will reduce by £200 million and we expect to save £400 million on our internal central costs. That is a 25% saving of the total internal budget, and 40% of the amount that the previous Government expected to be spent from the end of March 2010 to the end of the programme.

We have asked local service providers—the companies delivering the contracts—to change their scope and their delivery model and to reduce their costs. We have reached agreement with BT but still have some way to go before we come to an agreement with CSC. We will absolutely maintain the principle that suppliers will get paid only when they deliver working systems. We are pushing harder for faster results, and have made it clear to suppliers that we will not tolerate further delays. It is important to state that every single penny saved will be reinvested in improving patient care.

When it comes to NHS IT, there are, I am afraid, no easy choices. Several Members have mentioned that we have just carried out another major projects review, the outcome of which we expect to know in two to three weeks’ time. Until we have had the opportunity to consider the review’s conclusions, we will not be making any decisions on future investment.

It should not be said, however, that nothing has been achieved over the past decade, as many essential elements have already been delivered. Regarding national infrastructure, there is the spine, which is the core service that connects all other systems at both national and local level and handles, among other things, more than 11 million daily queries made on the personal demographics service.

N3, the secure network that links all NHS organisations to each other, to outside data centres and to the internet, has almost 50,000 connections. The NHS internal e-mail service handles 2 million e-mails every day.

As for national applications, every day, choose and book processes about 30,000 appointments, the electronic prescription service sends about 660,000 prescription messages and about 2,000 records are transferred electronically using the GP2GP system. On the summary care record, as a result of the two reviews that I commissioned last summer, we now have agreement on the core data to be held and the approach to roll-out. More than 30 million patients have been contacted about the summary care record.

Systems implemented by the programme are making a difference to patients’ experiences and to clinical efficiency, safety and effectiveness. For example, at Morecambe Bay, infection prevention is now fully electronic, using the Lorenzo system. In St Barts, clinicians are alerted to all patients carrying MRSA through the Millennium system. The Royal Free hospital has also used Millennium to create safety procedure information, including for endoscopy data and bleeding guidelines.

Although progress in delivering local systems has been slower than anticipated, BT has delivered community and mental health systems to all trusts in London and the south that requested them, and the Cerner Millennium system to just over half the London trusts that require it. CSC has delivered to 83 acute trusts in the north, midlands and east of England using upgraded interim systems. It has also delivered iSoft’s Lorenzo e-patient record system to 10 trusts and completed delivery of 137 prison health IT systems across the country.

The NHS needs local systems to be fully integrated with the core components supplied by the programme. The interoperability toolkit will help. It is a core part of the “connect all” strategy, enabling trusts to exploit their existing systems fully. There is a great deal of interest in the approach; 78 suppliers and 71 health organisations attended the last forum on the toolkit. It is already being used to good effect at Newham hospital to deliver a patient check-in kiosk, and at Liverpool Broadgreen hospital to provide a consolidated view of patient information across multiple care settings.

All but 14 of the more than 8,000 GP practices in England have a system supplied by either the national programme or the GP systems of choice scheme, which has allowed us to maintain several small and medium suppliers in the market. In the south, we have used the additional supply capability and capacity framework for community and mental health to bring together 10 trusts to leverage their combined buying power while increasing their choice.

Security must always be at the front of our minds when we consider NHS IT systems. Great care is taken to ensure that systems are secure, and we carry out regular tests to ensure that they cannot be penetrated inappropriately. My hon. Friend will have heard late last week about the hacking of the SHINE sexual health website run by the East London NHS Foundation Trust. The website was an information-only site that carried no patient data and a local service that was not connected to any data held nationally. The issue was dealt with promptly, and the trust urgently reviewed its local security arrangements and is satisfied that no further breaches are possible. We also operate a rigorous process of role-based access controls to ensure that only the clinicians treating a patient have access to sensitive clinical data.

Because NHS systems are so critical, they need to be far more robust and stable than those outside the programme. We invest a great deal of money in ensuring that if systems go down, each and every component can be automatically recovered. Should a whole system fail, it can be recovered and made available for clinicians to use within two hours. Of course, such a level of disaster recovery does not come cheaply, which helps explain differences in price between some systems in the programme and similar systems procured by some trusts outside the programme. Systems bought locally will need to meet the technical and data standards laid down by the national commissioning board in order to participate in the networked environment.

I turn to the points raised by the hon. Member for Leicester West and my hon. Friend the Member for Thurrock (Jackie Doyle-Price). The hon. Member for Leicester West asked about the role of the NHS Future Forum. There were no specific responses about NHS technology systems, but it is clear that information flows are essential to link interventions and outcomes. However, as she said, we concentrated on the information revolution through the document that flowed from the White Paper last summer. As she also said, a consultation was held. We have been considering the responses, and we will publish them in due course. At the moment, I cannot give her a definite time.

The reason for the delay—I hope that she will appreciate this—is that during the eight to nine weeks of the listening pause on NHS modernisation, a decision was taken not to publish the responses to the information revolution consultation, if only to help the hon. Lady, so that she could not accuse us of not pausing sufficiently to listen to people and of carrying on regardless of what was going on in the listening exercise. I hope that she will give us credit for holding a genuine listening exercise and appreciate why we did not publish during that period. It was not least to forestall her criticism of us for doing so.

The hon. Lady also asked about the transitional vehicle. As she will appreciate, it is required to manage the existing arrangements and support local systems. It will not determine what needs to be done; the shape, scale and timeline have still to be determined exactly. We are working on it as part of the response to the pause, and we will determine in due course how it will operate to provide that support and move forward under the auspices of the national commissioning board.

My hon. Friend the Member for Thurrock asked about ensuring value for money and checking everything. I can give her assurances on that, because it is crucial. There is little point continuing to talk about the past, partly because we were not responsible and would not have done things as the last Government did them. We are where we are. We must learn from our mistakes and move forward. I hope that my hon. Friend will accept from my comments that we have grasped the nettle, accepted that the approach was wrong and learned from our mistakes, and that we will continue to learn and to seek to ensure that we have the information system critical to a modernised NHS and improved and enhanced patient care and patient experience, while minimising the problems that have haunted this episode ever since its introduction a decade ago.

I hope that my hon. Friends and the hon. Member for Leicester West will accept that we are moving forward, learning lessons from the past and seeking to ensure that we have a system that meets the requirements of a modernised NHS and, above all, is fit for purpose and does what the NHS needs it to do.