Mealy-mouthed NAO pampers NHS IT

Avoids key questions

The £12.4bn National Programme for IT might not be delivering value for money, according to the National Audit Office report into the ambitious NHS IT scheme.

But the auditors cannot be too sure because no proper cost/benefit analysis has been done. The NAO report was meant to tell us. It's brief included deciding whether contracts were "likely to deliver good value for money", but it has failed to draw a clear conclusion.

Chris Shapcott, director of health value for money studies at the NAO, and the lead on the auditing team, was able to report that "quantifiable benefits are currently less than the cost of the programme."

He said the NAO would not be able to assess fully whether the Programme had been value for money until it was completed in 2014.

Even the question of whether it is "likely" the Programme will deliver value for money has been put off until Connecting for Health, the Department of Health unit that is running the Programme, can carry out a recommendation of the NAO report that it do a proper cost/benefit analysis.

Strangely, Connecting for Health was able able to shower the NAO with figures to defend its position against mounting criticism. Tough negotiations with generic software vendors like Microsoft and Oracle, for example, saved £860m. Contracting centrally for the whole of the NHS saved £4.5bn. Screwing suppliers contractually saved another £6.8bn. An estimate of the value of a system that gives more timely and accurate medical information is £2.5bn, and so on.

Yet when it comes to surmising value for money more broadly, CfH is at a loss. It reckons much of its value can't be quantified. How do you measure the value of improved patient safety or services, CfH asked the auditors.

The assumption appears to be that the chippy determination of the Programme's director, Richard Granger, will eventually force something of value out of the Programme; and that gives the Programme an inherent value.

But the NAO's mealy-mouthed report avoids the more fundamental question it had promised to answer: whether the controversial manner in which the project was set up and managed has delivered value for money.

The report did note the Programme's failure to consult with users, a sure sign of badness in an IT project. The Programme was "imposed by diktat from above", as remarked in a statement today by Edward Leigh MP, chairman of the Public Accounts Committee, and for whom the NAO had written its report.

An aversion to dictatorial project management is not a wisdom we have accrued only from the repeated failures of dictatorial project managers. Force does not make something right, Jean Jacques Rousseau said two hundred and fifty years ago, but it does make it happen, for better or for worse.

In this respect, even the basic premise of the Programme is open to question. There might have been any number of alternatives, managed wisely, implemented carefully. But as Shapcott told journalists today of the NHS' approach to IT development in the years before the Programme's inception in 2002: "At the time it was decided that strategy wasn't working. It wasn't delivering the pace of change that ministers wanted."

A political timetable demanded a hurried procurement for the Programme and not just secrecy, but dropping any but cursory consultation.

There is evidence that the NAO did consider its brief to asses the value for money of the procurement. But it has kept its deliberations to itself. And the result was a list of lessons that consisted mostly of apparently credulous support for the programme's rush tactics and bad cop negotiations with suppliers.

For example, a "swift" procurement gets a better price out of suppliers, said the report, presumably because it gives them less of an opportunity to scope the system out properly and cost it effectively. So the Programme got a good price, but how likely is a complex project to deliver a good computer system if it is planned and specified in a hurry?

Another NAO lesson was that the tough contractual terms like the ones the Programme imposed on its suppliers reduce the likelihood of wasted public money. But they also put enormous financial strain on suppliers that might ultimately hinder the delivery and quality of the system. The continuing crisis at NPfIT supplier iSoft this year might be a case in point. (iSoft might not have been a contracted directly by CfH, but the same tough terms where passed down to subcontractors by the primary suppliers).

Who now can tell us whether the Programme's approach was desirable, delivered the best possible system for the best possible price in the shortest possible time; that it delivered value for money?

The NAO will not even make an interim judgement on this. Yet it has still managed to give the Programme a pampering in its report.®

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