Fujitsu win legal battle with the Department of Health over NPfIT money pit

One of the largest examples of a pure waste of public money in my lifetime appears to be finally rumbling to its conclusion, but not before the UK taxpayer, already a few billion £ down, takes a few more blows to the wallet.

The National Programme for IT in the National Health Service (NPfIT as it was known to its friends) has cost us billions, with remarkably little to show for it. It’s something that really should be pinned most firmly at the door of Tony Blair and his advisers in number 10 Downing Street, who pushed it through in the early noughties with the help of their allies in the Department of Health. Another key person was Richard Granger, who ran the programme, but I better be careful what I say about him. He came up with great concepts such as the “husky" theory of supplier management – “if one struggles, the others will eat it and the sledge carries on".

That didn’t provide a very solid basis for progress once it became clear the programme was unachievable, with the lack of buy-in from around the health network another major contributing factor. That also showed that the JFDI theory of management doesn’t tend to work in a devolved public sector environment, but Blair and others seemed blissfully unaware of that.

Anyway, the latest development is that IT services supplier Fujitsu has won their case to get a further £400 million or so in fees they believed they were owed when the programme was finally closed. The Times reports that:

“Industry sources say that Fujitsu is likely to be awarded about £400 million in compensation in addition to £250 million already paid when the scheme, called the NHS National Programme for IT, began to falter”.

Fujitsu won the contract - to digitise patient records in the South of England - in 2002 but it was terminated in 2008, after disputes over changes, including a new system for electronically displaying and storing X-rays. The Cabinet Office tried to broker an agreement after the 2010 election but failed, and it went to arbitration. It would be interesting to know which law firm advised the government to go to arbitration rather than settle – that’s proved to be an expensive decision too.

“The government will also have to foot Fujitsu’s legal bill of nearly £50 million, in addition to its own legal costs of £31.5 million. The Cabinet Office, the Department of Health and Fujitsu refused to comment on the deal”.

And if you want more on the whole sad story of the programme, we published our somewhat more detailed views on it three years ago here.

First Voice

  1. Sam Unkim:

    “with the lack of buy-in from around the health network another major contributing factor” Not to nit-pick on a very good article.
    We (existing NHS Staff) wanted this really badly but we were actively managed out of making any contribution to this project.

    http://www.ehi.co.uk/news/primary-care/632

    So perhaps this could be edited to read “NHS staff realised early on, that the King is in the altogether, the altogether, the altogether”….

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