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Last Updated: Tuesday, 12 October, 2004, 07:09 GMT 08:09 UK
Warning of major NHS IT overspend
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The costs may be higher than previously estimated
The final cost of modernising NHS computer systems could rise to between 18.6bn and 31bn - three to five times the declared figure - it is reported.

The inflated sum would eat into already overstretched trusts' budgets, the magazine Computer Weekly says.

But Health Minister John Hutton said the NHS would not be expected to carry an unsustainable financial burden.

The 10-year IT programme includes plans to give 50 million patients in England an electronic health record.

The Department of Health said the cost of implementation should be seen in the context of its spending on the NHS.


Public spending watchdog the National Audit Office is investigating the programme.

It hopes to report by summer 2005 on the way the system to be installed was chosen, and whether it offers value for money.

The IT programme should allow doctors to access information about a patient, via their record, whether they are at their local GP surgery or at a hospital at the other end of the country.

Many Health Trusts are currently in deficit and would struggle to find money for a centrally imposed project of this scale.
Shadow Health Secretary, Andrew Lansley

Patients should also be able to book appointments and operations using an electronic booking system.

Computer Weekly said it had learned that officials at the Department of Health had estimated the total costs of the programme at between 18.6bn and 31bn. The declared cost was 6.2bn.

A spokesperson for the programme told Computer Weekly the estimates had been based on US experiences.

"It is generally accepted in the IT industry that implementation costs are some three to five times the cost of procurements. That is reflected in the business case that was made for the national programme," said the spokesperson.


Some trusts are warning that money for the programme may eat into local budgets that are for direct patient care and meeting government targets.

We are not going to ask the NHS to carry an unsustainable financial burden.
John Hutton
Liberal Democrat Shadow Chancellor Vince Cable told Computer Weekly: "Local health trusts will be forced to make very difficult decisions to support the national programme with local funding.

"This could mean cuts in other frontline services if the project is to be delivered. The future success of the NHS depends on this project."

Shadow Health Secretary Andrew Lansley said: "The NAO's unusual decision to investigate the programme at this early stage is entirely appropriate given the fears we have that it will fall short of expectations and cost considerably more than originally anticipated.

"The government needs to be transparent about where the extra costs will fall, as many health trusts are currently in deficit and would struggle to find money for a centrally imposed project of this scale, without seriously cutting local service delivery."

Dr John Williams, an IT spokesman for the Royal College of General Practitioners, welcomed the National Audit Office investigation.

He said apart from the tendency for such projects to over-run and over-spend, GPs were also worried about the safe transfer of patient records to the new national computer system.


Health Minister John Hutton insisted the cost estimates were simply "speculation".

He told the BBC Radio 4 Today programme the 1bn already spent each year on IT would be available for the new system.

"All that has happened today is that someone has speculated about what the overall costs might be.

"We are not going to ask the NHS to carry an unsustainable financial burden. We are not stupid.

"The national system for IT carries the potential for making major savings in terms of efficiency and patient safety."

He stressed that implementation of the new system should cost no more than the 1bn already being spent each year on IT.

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