The failure of the NHS to nail IT contracts

The tender writing is completed, the bids are in and awarded and you have begun delivery. At what point, if you are a contract holder in the public sector, do you put your hands up and say “We've failed. Enough is Enough?” We're still waiting for CSC, the main NHS IT contractor to come out and say that, well, enough is enough. Or perhaps the Government will say it for them.

The NHS spends billions of pounds on IT tenders and subsequent projects that promise to bring 'state of the art' modernity to its outmoded and manual rusty cogs. So why, with all of that money flowing, can some of the biggest beasts in IT contracting not get it quite right?

Well, to the large technology companies that find themselves entwined with the NHS, the biggest problem is financial loss. Look at Accenture, who, after three years of operating their £3 billion IT contract, unceremoniously handed it over to their biggest rival, CSC, after losses running into the hundreds of millions. Now CSC is under fire from Government ministers who are becoming increasingly vocal about it's failures. So vocal, in fact, that there is speculation that the government is considering scrapping one of the contracts altogether.

The vision was clear – a national health records database containing the medical details of everyone in the country and workable, reliable IT systems to manage it. Of the four big companies operating contracts, Accenture, CSC, BT and Fujitsu, only BT and CSC remain. As stated above, Accenture bowed out and handed over their contract to CSC and Fujitsu's contract was cancelled by the NHS in 2008 due to poor performance. Now it looks like if the Government get their way, only BT will remain. This is a shocking outcome from an admittedly ambitious project. So what on earth has gone wrong?

The backdrop of the NHS IT dream was a spend, spend, spend culture and a Government that was hell bent on updating the infrastructure of the entire country, an idea last visited in the post-war, swinging sixties. Tenders for PFI and IT contracts were handed out like boiled sweets with the potential costs a background consideration. £2.7 billion later and barely a foot forward, the NHS IT project looks like it might have been an expensive mistake – a utopian vision resulting in a dystopian financial headache as the economy falls to it's knees. The original 2005 deadline has long passed, the new 2015 deadline is looking increasingly ambitious. There is no doubt that the project is much needed, more so as technology continues to advance, but at what cost?

The National Audit Office, the spending watchdog for the Government, has been investigating the missed deadlines and its findings have sparked two inquiries into the future of the projects. Ian Watmore, the government's Chief Operating Officer, responded to the findings by saying that the programme had been “ a classic example of over-ambition by the Department and over-selling by the companies.”

Whilst the end result continues to be attractive and no doubt essential, the future looks bleak for the current contract operators. The NAO findings themselves will force a change in the way the contracts are operated. How much so remains to be seen.