By Lucy Phillips
10 December 2009
Scaling back major IT projects will contribute to £5bn of savings on government spending programmes, it was confirmed in the Pre-Budget Report.
Chancellor Alistair Darling said £500m would be cut from ‘lower priority’ IT budgets within four years. The government is due to publish a new public sector IT strategy before Christmas aimed at saving billions of pounds.
The announcement follows consistent criticism of the management of large-scale government IT programmes, including systems for the NHS and the National Offender Management Service.
Health Secretary Andy Burnham earlier outlined Labour’s plans to ‘pare back’ its £12.7bn NHS IT programme. The aim is to save £600m over the ten-year lifespan of the project, which was launched in 2002.
Core elements would be retained, such as electronic prescriptions, but trusts would now have to decide how to be part of the national system at a local level.
Burnham rebuffed jibes from the Tories and Liberal Democrats that the scale-back meant the project had been a ‘waste’. He maintained the government had ‘no intention whatsoever of cancelling the programme overall’. Both opposition parties have called for the national programme to be abandoned entirely, aside from existing contractual obligations.
Frances Blunden, senior policy manager at the NHS Confederation, which represents over 95% of health service organisations, told Public Finance that cuts to the IT programme were not as bad as initially feared and represented only a small proportion of the total budget.
She said the project had underspent in recent years – last year, just £586m out of a £917m pot was used – so savings would be derived mainly from this. She added that tight contractual terms meant there was little scope to cut back on parts already in the pipeine.
But Blunden admitted NHS organisations were ‘very concerned’ by Conservative proposals to abolish the programme altogether, warning that many of the benefits that had been achieved would be lost. ‘Trusts have invested a huge amount of their own resources in making it work, and not without pain,’ she added.
The British Medical Association warned: ‘Cutting back now is not as simple as it seems, given that contracts are already in place.’ The association said the government should look to reduce NHS use of private sector treatment centres and external management consultants before scaling back on IT, which was ‘central to efficient, effective, safe patient care’.
Michael Hallsworth, senior researcher at the Institute for Government, told PF the decision to scale back the project was not a total surprise. ‘In the current fiscal climate you have to look at savings wherever you can,’ he said.
He added that the project had been allowed to continue ‘without significant adjustments’ after the Office of Government Commerce had called for ‘immediate remedial action’.
10 December 2009
Scaling back major IT projects will contribute to £5bn of savings on government spending programmes, it was confirmed in the Pre-Budget Report.
Chancellor Alistair Darling said £500m would be cut from ‘lower priority’ IT budgets within four years. The government is due to publish a new public sector IT strategy before Christmas aimed at saving billions of pounds.
The announcement follows consistent criticism of the management of large-scale government IT programmes, including systems for the NHS and the National Offender Management Service.
Health Secretary Andy Burnham earlier outlined Labour’s plans to ‘pare back’ its £12.7bn NHS IT programme. The aim is to save £600m over the ten-year lifespan of the project, which was launched in 2002.
Core elements would be retained, such as electronic prescriptions, but trusts would now have to decide how to be part of the national system at a local level.
Burnham rebuffed jibes from the Tories and Liberal Democrats that the scale-back meant the project had been a ‘waste’. He maintained the government had ‘no intention whatsoever of cancelling the programme overall’. Both opposition parties have called for the national programme to be abandoned entirely, aside from existing contractual obligations.
Frances Blunden, senior policy manager at the NHS Confederation, which represents over 95% of health service organisations, told Public Finance that cuts to the IT programme were not as bad as initially feared and represented only a small proportion of the total budget.
She said the project had underspent in recent years – last year, just £586m out of a £917m pot was used – so savings would be derived mainly from this. She added that tight contractual terms meant there was little scope to cut back on parts already in the pipeine.
But Blunden admitted NHS organisations were ‘very concerned’ by Conservative proposals to abolish the programme altogether, warning that many of the benefits that had been achieved would be lost. ‘Trusts have invested a huge amount of their own resources in making it work, and not without pain,’ she added.
The British Medical Association warned: ‘Cutting back now is not as simple as it seems, given that contracts are already in place.’ The association said the government should look to reduce NHS use of private sector treatment centres and external management consultants before scaling back on IT, which was ‘central to efficient, effective, safe patient care’.
Michael Hallsworth, senior researcher at the Institute for Government, told PF the decision to scale back the project was not a total surprise. ‘In the current fiscal climate you have to look at savings wherever you can,’ he said.
He added that the project had been allowed to continue ‘without significant adjustments’ after the Office of Government Commerce had called for ‘immediate remedial action’.
