Future IT contracting jobs in doubt after NPfIT scrapped

With recent news that the NHS’s £12 billion National Programme for IT (NPfIT) is to be scrapped after a number of damaging reports from the House of Commons Public Accounts Committee, the IT contracting community is awaiting clarification from central Government about the future of the project.

On the announcement that NPfIT that was set-up in 2002 will be dismantled, Andrew Lansley, the Health Secretary not surprisingly laid the blame with the previous Labour government stating: “Labour’s IT programme let down the NHS and wasted taxpayers’ money by imposing a top-down IT system on the local NHS, which didn’t fit their needs. We will be moving to an innovative new system driven by local decision-making. This is the only way to make sure we get value for money from IT systems that better meet the needs of a modernised NHS.”

As one of the major players building the system, Fujitsu has announced it is getting ready to sue the Department of Health for a reported £700 million in a case that is directly related to the NPfIT project. Fujitsu actually abandoned the project in 2008 citing that local trusts had allegedly withheld payments to the company in order to force additional changes to the systems they were building.

In June, David Nicholson, chief executive officer of NHS, said: "There has been a lot of discussions between us and Fujitsu on what constitutes contract change and what constitutes non-delivery of the contract and my guess is that it is going to be the subject of a whole series of discussions in the next period." Clearly Fujitsu have now decided that the time is now right to attempt to recoup some of their losses. A Fujitsu spokesperson said: “We are in formal legal proceedings to recover the losses following the termination of the contract. There are preparations for a court hearing now taking place.”

The knock on effect within the IT contractor community that will be felt after the termination of the NPfIT project is unclear. Central Government has signalled that a new IT platform will be built, as it as now clear that a national system that approached the project as a one size fits all platform is unworkable. Indeed, the Major Projects Authority established by the Coalition to assess Labour’s financial commitments to capital projects like NPfIT publicly stated that the scheme was “beyond the capacity of the Department of Health to deliver”.

The new approach will be to build regional schemes that it is hoped will be easier to manage, deliver better efficiency and are cheaper. Cabinet Secretary Francis Maude commented: "This Government will not allow the costly failure of major projects to continue. That's why we set up the Major Projects Authority to help us get firmer control of our major projects, and ensure there is a more systematic approach by departments as well as regular, planned scrutiny to keep projects on track."

A question also remains whether the other contractors including BT and CSC will continue in any capacity is also unclear. Last month CSC stared that it’s component of the NPfIT service was progressing well even though in August the Public Accounts Committee advised that CSC may not be fit to tender for any other public sector contracts having only delivered the patient records system they had been building to just three trusts in nine years.

Clearly with the fate of NPfIT now decided and also a question over which companies and therefore, which contractors will be able to tender for the new localised system, some clarification is needed. A new IT system for the NHS will be built and the NHS itself may oversee the construction of these new local IT services that the NHS Commissioning Board may oversee. This was stated in the ‘Liberating the NHS’ white paper.

Director General for Informatics, Christine Connelly, said: “It is clear that the National Programme for IT has delivered important changes for the NHS including an infrastructure which the NHS today depends on for providing safe and responsive health care. Now the NHS is changing, we need to change the way IT supports those changes, bringing decisions closer to the front line and ensuring that change is manageable and holds less risk for NHS organisations.” IT contractors will be asking who will build these new systems and will these tenders perform with more efficiency.

David Howell