The NHS IT programme – a failure of procurement?

The National Audit Office issued a damning report last week on the NHS National Programme for IT last week.

“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 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.”

So why has it failed? Rather than go over the ground covered in the (very good) NAO report, here’s our perspective on the procurement issues in particular that have contributed to this huge waste of money.

In the early years of the programme, which kicked off in 2002, Richard Granger, head of the programme and a pretty direct sort of chap, took great pride in pushing through the procurement process in record time. Contracts were put in place in around a year; unheard of for such a huge public sector IT programme.

But how was this achieved? Here’s our take on it, based on many conversations over the years; and we would suggest that the seeds of future problems were sown during this initial process.

  • There wasn’t too much focus on the precise specification; the suppliers were engaged for their general ability to build this sort of system, rather than working to a detailed specification. And over subsequent years, it became clear that some suppliers did not have the capabilities that were needed to do what was actually required.
  • Secondly, Granger appointed what was in effect a framework with a number of suppliers, which helped in terms of speed as not all the details had to be tied down in advance. His vision was that, if a supplier failed to deliver, they would be kicked off the programme; he would “feed them to the other sled dogs” (as apparently the weakest husky suffers this fate in the Arctic). What actually happened was that pretty soon, some suppliers were falling over each other to get out of the deal – they would chop their own legs off to get out of harness (e.g. Accenture paid CSC a huge sum to take over their responsibilities!)
  • Granger was also proud of the risk transfer element; suppliers wouldn’t get loads of money up front, as had happened in some previous programmes.  Now, I’d give him some credit for that; it was designed to make sure the public sector paid for what it got. That has happened to some extent; but while you can transfer some financial risk, you can’t get away from the operational and reputational risk of a programme failing to deliver what it was designed to do. That risk will always come back to the Government.
  • Finally, and most importantly, a conscious decision was taken, (and this wasn’t just Grainger, this went right up to Blair) that they would NOT try and get ‘user buy-in’ to the programme. It’s easy to have some sympathy – trying to get every GP and health authority to buy-in may have been an impossible stakeholder management task. But the negative of course has been a lack of commitment to the programme from the beginning from key users, and suppliers realising that the business wouldn’t present itself on a plate to them – they would have to develop the systems AND go out and sell them.

So if nothing else, this whole episode probably demonstrates that there aren’t too many short cuts available when it comes to huge IT and procurement programmes. The current government, quite rightly, wants to speed up procurement. But if you’re going to do something significant, factors such as stakeholder buy-in, a clear specification, and well negotiated contracts (agreed while you still have leverage with the market), are all pretty critical success factors. And perhaps it also says that an IT programme on this scale just isn’t really feasible, even if you got all of those elements in place.  I’m not sure we’ll ever see a Government attempt a programme quite this ambitious again in my lifetime.

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Voices (5)

  1. Barry Henniker:

    Peter’s analysis is very apposite but it is a jig that could be fitted around many other projects that do not get so high a profile but which equally fail to deliver – OGC captured it all years ago very succinctly in their leaflet “The 10 Key Cause of Project Failure”. The really worrying thing is that it seems to me the current governmen (together with its senior civil servants) is poised to make exactly the same governance mistakes with their eyes wide open.

  2. richard:

    Accountability rests with Granger – professional indemnity for whole amount?

  3. Final Furlong:

    That’s an excellent summary Peter – absolutely spot on.

    Grainger (like Anderson) wasn’t the type of person to be distracted by the actual requirements of NHS clinicians (and users) and was praised by Number 10, for literally hammering in centralised solutions into the Health system using an army of interims (400+ at one stage, complementing Anderson’s 260+, at its peak) and consultants, many of whom had little or no experience of delivering change in the public sector (let alone in Health).

    The Department of Health lost control of both individuals and their programmes and, like the Independent Sector Treatment Programme, the National Programme for IT is being dismantled, boxed up and shelved – similar to what a parent does when they find the discarded, broken toy of a spoilt child.

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