Information Technology (NHS)

John Pugh Excerpts

Tuesday 14th June 2011 Westminster Hall

[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.

--- Later in debate ---

[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.