Original URL: http://www.theregister.co.uk/2006/06/16/nhsit_budget_overrun/

NHS IT cost doubled to £12.4bn

'But it's not over budget'

By Mark Ballard

Posted in Policy, 16th June 2006 12:44 GMT

The £6.2bn National Programme for IT will henceforward be known as the £12.4bn National Programme for IT, after a long-awaited National Audit Office report into the ambitious NHS IT scheme revealed the full extent of its costs to date.

But the Department of Health always knew it was going to cost as much as £12.5bn, it said today, even in those days when it said the programme was going to cost half as much.

Moreover, it insisted today, that the doubled price tag did not mean that the Programme has gone over-budget.

Speaking at the launch of the NAO report this morning, Chris Shapcott, director of health value for money studies, said there were "appraisals" done by the Department of Health "prior to the contracts being let" to the major suppliers in 2003.

These were documented and accounted for the £12.4bn cost of the programme that the Department's IT body, Connecting for Health, has now been forced to admit by the publication of the NAO report.

"They always recognised there would be more spending," he said.

Health minister Lord Warner said that the Programme, "despite what some people say, is on budget."

"The NAO has confirmed the cost has not overrun," he said. And anyway, the costs were not important.

"We need to talk more about the benefits. In the long term this project will pay for itself," he added.

The vastly inadequate cost estimates touted by Connecting for Health since the inception of the programme (once £2.3bn) have been ridiculed by independent scrutiny before. It had forced the Programme to admit that its £6.2bn cost estimate did not include the cost of implementing the systems, only developing them.

The same story was given again today by Richard Granger, boss of Connecting for Health, with some elaboration. It is normal in the IT industry, he claimed, for people to disregard the cost of implementing a system when estimating its price. It must be a little like budgeting for the cost of a new house, but only accounting for the land and materials - the cost of the builders is irrelevant, apparently.®