| | By Mick James
US senator Everett
Dirksen once said: “A
billion here, a billion
there, and pretty soon
you’re talking about
real money.” And so it
is with the allegedly
ever-expanding budget
for the NHS Connecting
for Health programme.
ITV’s lunchtime news
led on it when the
National Audit Office’s
report came out. They
had an infographic which
showed the initial cost
as £6.2bn quickly
crossed out and replaced
by £12.4bn and then
replaced by an ominous
looking £20bn. Lord
Warner, the Minister for
Reform, was wheeled on
but shouted down
whenever he tried to say
anything.
The impression the
average punter gained
was of a damning report
on yet another
disastrous IT project
spiralling out of
control to cost the
taxpayer billions of
extra pounds for no
benefit.
And why wouldn’t ITV?
Reporting on a report is
one of the easiest jobs
a journo can do. All the
work’s been done for
you, all you need is
“the simple sword of Cut
and the sturdy shield of
Paste” and possibly
access to the Internet
and you’re off.
So using just these
techniques, here’s a
basic comparison of what
the NAO report really
says, compared to the
press coverage.
Let’s take as a
starting point the
normally scrupulous
Guardian’s “The cost
of setting up the vast
NHS IT programme is
expected to be double
the Government's
original estimate,
Parliament's spending
watchdog said today. But | |
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| | the report makes clear,
is not part of the
budget committed to the
project but the NAO’s
projection of ancillary
costs covering “...new
projects added to the
original
scope...additional
services...central
expenditure...by NHS
Connecting for
Health...the estimated
cost of replacing core
contracts...expenditure
by local NHS
organisations, for
example on local IT and
training and ensuring
compliance of local
systems with programme
delivered systems.”
So, not an
“overspend” but a
broader view of NHS
expenditure related to
the project, much of it
“not committed
expenditure but based
mainly on the forecasts
of expenditure made in
the investment
appraisals carried out
at the time of the award
of the main LSP
contracts”.
Not only were these
local costs expected,
but the NAO expects that
a significant proportion
of them will be offset
by the programme itself.
Having misunderstood
what was announced—which
was the (fixed!) amount
of money that would be
paid to contractors, the
media cries foul when
its mistake is
corrected.
So where did the
£20bn figure come from?
That was, surprisingly,
poor old Lord Warner
himself. But as the NAO
report explains clearly
(to anyone who can be
bothered to read it)
“that was not referring
solely to the costs of
the Programme but to the
total expenditure on NHS
IT over 10 years.”
But Lord Warner
didn’t get a chance to | |
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| | explain this on the
telly. Instead he was
lectured about how £20bn
could have paid for “200
hospitals” or “two
million nurses” – and
all for the small price
of the NHS spending
nothing at all on IT
ever again. Here’s Dr
Laurence Buckman of the
BMA arguing the same
point: "The NHS spends
an awful lot of money on
things it doesn't need.
The cost of the IT
programme makes overall
NHS deficits look rather
tame in comparison. A
reining in of the
project could wipe out
the deficit."
Leaving doctors and
health trusts free to
carry on with their own
little spending spree.
Because, as we all know,
IT is a senseless
extravagance, like Jimmy
Choo shoes, or titanium
golf clubs. It couldn’t
possibly have any
benefits, because
otherwise they’d be
mentioned in the report
and its coverage,
wouldn’t they?
True, the NAO issues
a caveat – “the main
aim (of the programme)
is to improve services
rather than reduce
costs” – but does
identify “high level
benefits” of the
programme. An example of
these is “using the NHS
Connecting for Health’s
buying power to drive
down the prices paid for
IT goods and services
(and) staff time saved
through using the
Programme’s services”.
No figure is given
for the staff time, but
the NHS has already
taken Microsoft to the
cleaners for £330m and
expects to save another
£530m by beating up the
rest of the IT industry.
Then there are patient
safety benefits which
the NAO says “could be | |
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| | worth many billions over
10 years...this estimate
includes £2.5bn as the
human value of
preventable fatalities
from medication errors”.
You read that right:
two-and-a half billion
pounds worth of dead, or
rather not-dead people.
Then there’s the £500m
on treating those
medication errors, and
the £430m in resulting
negligence claims, a
large proportion of
which, the NAO believes,
will disappear.
As for that “extra”
£6.2bn referred to
above, in the case of
the LSP (local service
provider) contracts,
“local savings were
expected to offset
nearly half the local
costs”. In the case of
PACS, the picture
archiving system for
X-rays, local savings
were expected “fully to
offset the local costs”.
The NAO also expects
“smaller savings...in
other areas” such as
£185m for NHS mail.
Several commentators
have criticised the
scope and scale of the
project. The NAO by
contrast notes that “The
procurement of the
contracts centrally ...
is estimated ... to have
saved £4.5bn in terms of
the prices paid for
goods and services ...
competitions for the IT
contracts, enabled ...
significant price
reductions from the
eight prime contractors,
the difference between
their initial and final
bids totalling £6.8bn”.
Now there may be a
bit of double counting
in that, but just on my
fingers and thumbs I
reckon that Connecting
for Health is on track
to pretty much pay for
itself. So what shall we
spend that mythical
£20bn on?
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