Cuts to NPfIT - a bitter pill for NHS to swallow
NHS IT projects could be in line for cutbacks following this week's pre-budget report.
Chancellor Alistair Darling told The Andrew Marr Show yesterday that the report, due to be published on Wednesday, will provide guidance on which areas of public spending were likely to be cut.
"I do think it is necessary for me to indicate areas where we are going to cut spending or where we're not going to spend as much as we were," he said.
"For example, the NHS had a quite expensive IT system that, frankly, isn't essential to the front line.
"It's something I think we don't need to go ahead with just now."
A Department of Health (DoH) spokesman confirmed that options for NHS IT cutbacks had been drawn up by Darling and the Secretary of State for Health Andy Burnham, but refused to confirm details of where the cuts could fall.
It's widely expected elements of the £12.7bn National Programme for IT (NPfIT) - the biggest centrally funded health service IT scheme which covers a group of 10 projects to upgrade and replace old systems - could be in the firing line.
Cutting vital parts of the NPfIT could damage healthcare provision, Paul Flynn, member of the IT working party for doctors' union the British Medical Association (BMA), told silicon.com.
"It is not practical to cut back on all of those systems without the NHS grinding to a halt - there are some bits that it would be mad to cut," he said.
"We don't want to see a situation where something gets switched off and we're back to having to rely on paper records and phone calls for the transfer of information.
"Our greatest concern is that, while the chancellor may feel he is saving money from central funds, trusts will still have to find their own money to spend on IT systems and other areas will suffer as a result," he said.
NPfIT projects that Flynn would like to see exempt from the cutbacks are the PACS system that allows hospitals to share digital images such as X-rays and the NHSmail system.
A core part of the NPfIT, called the Care Records Service, will create a single electronic medical record for patients throughout England, to be stored on a central database known as the Spine. The systems that will be used at hospitals to handle the electronic care records, known as Patient Administration Systems (PAS), have had their rollout delayed by technical and usability problems. Originally scheduled to be in place by 2010, the PAS will now not be rolled out across England until 2014.
Tola Sargeant, public sector analyst with TechMarketView, believes the planned installation of the PAS is the part of the NPfIT most likely to be scrapped.
Sargeant added that it was probable the DoH would abandon its search for a supplier to take over the £1.1bn of work to rollout PAS in the south of England that was being carried out by Fujitsu when its contract finished prematurely last year.
"That procurement could now be a casualty of spending cuts too - it would be much easier for the government to cancel something that has yet to get off the ground than spend months (and considerable sums of money) negotiating its way out of existing contracts," she said in a research note.
Cancelling other PAS contracts with suppliers BT and CSC could prove costly for the government, she added: "While the details of BT and CSC's contracts are not in the public domain, it is likely that both suppliers would be in line for significant compensation."
The BMA's Flynn said it is important that new PAS continue to be installed at hospitals but added health trusts could stop uploading records to the Spine without too much impact on the quality of healthcare.
Halting any further records being uploaded to the Spine would be a U-turn for the DoH, which only last month announced it was starting to upload records in London, ahead of uploading records across England next year.
Shadow health secretary Andrew Lansley condemned the government for wasting money on NHS IT.
"After seven years Labour have finally acknowledged what we've said for years, that the procurement for NHS IT was costing billions and not delivering," he said in a statement.
"This is another government IT procurement disaster."