Costs of failed NHS computer system ‘could be more than £9.8bn’

Ministers shelved the ambitious scheme, designed to create electronic patient records for use across the NHS in England, two years ago but there are still outstanding costs and some elements of the project have continued in different parts of the country.

Government put the bill for the failed National Programme at £6.4bn when it announced it was being dismantled and officials later estimated the total would reach £9.8bn.

But the Commons Public Accounts Committee (PAC) said the full costs of the scheme are still not certain as the latest forecast does not include the bill for terminating Fujitsu’s contract for care records systems in the south of England or other future costs.

Taxpayers are continuing to pay the price for the failures of the Department of Health and its contractors, MPs said.

They highlighted the Government’s decision to renegotiate its original contracts, worth £3.1bn, with company CSC for care records systems across 220 trusts in the North, Midlands and East, following delays and problems.

But despite CSC’s “poor performance”, officials have been left in a weak negotiating position because they have failed to meet their own contractual obligations to provide 160 trusts to take on a new system and it is likely to be left with a contract costing £2.2bn.

PAC member Richard Bacon said: “Although officially ‘dismantled’, the National Programme continues in the form of separate component programmes which are still racking up big costs.”

He added: “Parliament needs to be kept informed not only of what additional costs are being incurred, but also of exactly what has been delivered so far for the billions of pounds spent on the National Programme.

“The benefits flowing from the National Programme to date are extremely disappointing. The department estimates £3.7bn of benefits to March 2012, just half of the costs incurred.

“This saga is one of the worst and most expensive contracting fiascos in the history of the public sector. Yet, as the much more recent Universal Credit project shows, there is still a long way to go before Government departments can honestly say that they have learned and properly applied the lessons from previous contracting failures such as the National Programme.

“It should be plain to anyone that we are witnessing systemic failure in the Government’s ability to contract.”

He said it was “very hard to believe that the paperless NHS towards which the department is working has much chance of being achieved by the target date of 2018”.