How an IT programme became a licence to print money

Connecting for Health, the £12 billion national IT programme for the NHS launched in 2002, is in serious trouble according to the National Audit Office, and mighty have to be scrapped.

Billed as the world’s largest civilian IT infrastructure project, its primary objective was to provide an electronic care record for every patient. Since patients could find themselves being treated in a wide variety of different settings, by a growing number of clinical specialists, it was becoming increasingly important to ensure that they all had access to the record of care.

This would reduce the costs of repetitive examinations, and enable a much more effective collaboration between generalists and specialists. To those involved in population medicine, and public health specialists dealing with epidemics, access to an entire population’s health records promised a rich seam for research. Drug companies were hovering like vultures, awaiting new data on prescribing patterns and disease trends.

But now comes the NAO’s a stark conclusion: "The original vision for the national programme for IT in the NHS will not be realised. The NHS is now getting far fewer systems than planned despite the Department [of Health] paying contractors almost the same amount of money. This is yet another example of a department fundamentally underestimating the scale and complexity of a major IT-enabled change programme.”

But there’s a lot more to it than that. Before the programme was launched, hundreds of people across Europe and the USA, including clinicians and information specialists - those close enough to unravel the complexity of the project - had been working on the project for years. They were developing the standards needed to provide the development path that would ensure information could be shared across the multiplicity of systems that had been already installed in health care and those yet to be developed.

What the NAO doesn’t do is to judge the consequences of the decision by the New Labour government to hand the entire programme over to the private sector. Decades of work on standards were thrown away.

In 2003-04, the health department awarded five 10-year contracts totalling some £5 billion to four suppliers for the delivery of local care records systems: Accenture in the East and in the North East; BT in London; Computer Sciences Corporation (CSC) in the North West, and West Midlands; and Fujitsu in the South. The aim was for detailed care records systems to be delivered to all NHS trusts and GP practices (excluding GP practices in the south) by the end of 2007, with increased functionality and integration added until full implementation was complete in 2010.

The naïve expectation from the new project leaders was that the competing suppliers, with little or no knowledge of health care systems, would talk amongst themselves to develop the standards needed to enable records to be shared across all systems.

Now only BT and CSC remain in the game. Whilst the broadband communications infrastructure is up and working, and x-ray and other images are routinely transmitted, and many patients are offered a choice of where they go for hospital treatment, as the NAO says, the care record is unachievable.

After years of missed deadlines, incomplete and inadequate systems and adjustments to the specifications and contracts, the outcome is an indictment of both New Labour’s cosy relationship with the business sector and the failure of market-led solutions.

New Labour effectively gave IT contractors a licence to print money as part of the introduction of the market into health care. Next came foundation hospitals that were run like commercial organisations. You don’t have to be a genius to see where the ConDem government got its inspiration for NHS competition from.

Gerry Gold

Economics editor

Bailouts beyond belief

How a government that has saddled taxpayers with liabilities of up to £850 billion – roughly £40,000 for each household – for bailing out the banks can now parade itself as the party for ordinary people as opposed to the “Tory toffs”, is beyond belief.

The bailouts of the banks are the largest, swiftest transfer of wealth in the history of British capitalism. And it was carried through by New Labour which, in turn, had presided over the same banks as they built fortunes on what proved to be calamitous mountains of debt.

In July 2008, while still chancellor, Gordon Brown hailed the dawn of a new “golden age” in the City of London; a few months later, this time as prime minister, he was pouring money down the throats of the bankers to the point where they were almost drowning in taxpayers’ cash.

The government spent £117 billion buying shares in banks and lending directly to financial institutions, a National Audit Office (NAO) investigation published today calculates. That represents a liability of £5,530 for every one of the 21.1 million families in Britain. When are other commitments are added in, the total rises to £850 billion.

And where has all this money gone? Despite being taken into state control, Royal Bank of Scotland (RBS) and Lloyds-TSB have failed to meet targets for lending, according to the NAO. In effect, although the NAO naturally doesn’t draw the same conclusion, taxpayers have financed the transfer of cash to other banks and the write-off of so-called “toxic assets”.

All to do what? Preserve a banking system that operates entirely in the interests of shareholders and senior staff and one that dazzled the government so much that the Treasury gave RBS clean bill of health less than a week before having to bail it out in October 2008, according to the NAO report.

Joining the queue for state hand-outs were financial advisers and lawyers who between them shared £107 million of taxpayers’ money in fees for services and advice during the crisis, and could receive a further £5.8 million in bonus payments. Nice work if you can get it.

Now the board of the largely state-owned RBS is threatening to quit unless it can pay out large bonuses to senior staff. New Labour is caught like a rabbit in the headlights. It can’t afford to alienate the bankers who might then move out of London to friendlier environments, and whose support helped to create New Labour in the first place. Yet public anger against the bankers is mounting as it dawns on people that massive public spending cuts are on their way after the forthcoming general election – whoever wins.

In the end, the laws of capitalist competition will prevail over the hot air from ministers like Lord Myners, himself a former fund manager and chairman of Europe’s largest property company.

The “choice” between New Labour and the Tories boils down to no choice at all. Just as Blair and then Brown carried on where the previous Tory governments had left off, Cameron’s New Tories will, if elected, deepen the class divisions and gross inequality they inherit from the present government.

The economic crisis is intensifying, as today’s announcement of the closure of the Corus steelmaking plant on Teesside shows. As far as the financial system goes, no one really knows the size of the huge debt overhang out there and may make the credit crunch look like a slight blip when the reckoning takes place. While the main parties play their political games ahead of the election, the threat to all our futures continues to mount.

Paul Feldman
Communications editor