Andy Burnham said the government hoped to save £600m: From BBC Democracy Live
The government will cancel some parts of its NHS IT scheme and allow trusts to develop their own systems in moves saving £600m, Andy Burnham told MPs.
The health secretary said the £12bn scheme - criticised over delays and costs - would be scaled back with more "options for savings" being looked at.
But it was a "myth" to say the whole project had been "a waste", he said.
The Conservatives said the handling of the scheme was an "abject example of the government's incompetence".
Shadow health secretary Andrew Lansley asked Mr Burnhan whether or not the centralised database of people's key medical details would still be developed.
Mr Burnham, who hailed achievements such as electronic prescriptions, said it would now be up to local NHS trusts to decide how to be a part of a national system.
Chancellor Alistair Darling said on Sunday he would be delaying parts of the IT project in Wednesday's pre-Budget Report, describing them as "not essential to the front line".
WHAT IS THE IT PROGRAMME?
The vision is for patients' records to be electronically available to any GP or hospital in England, thereby replacing local NHS computer systems
Other services include electronic prescriptions, an e-mail and directory service for all NHS staff, computer accessible X-rays and a facility for patients to book outpatient appointments online
It is the largest single IT investment in UK - costs are expected to hit £12.4bn over 10 years to 2013-14
It comes as the government looks to reduce its Budget deficit, which is expected to reach £175bn a year.
Mr Burnham told the Commons the NHS IT project was already bringing benefits and was a "key part of delivering modern, safe, joined-up health care."
To Tory jeers he added: "However, in the current climate, it is right to look again at efficiencies and value for money on all big projects."
He said: "We have no intention whatsoever of cancelling the programme overall, not least because it is already making the NHS safer, more efficient and more convenient for patients.
"But we are discussing with our suppliers potential reductions to the scope of the systems and the cost savings that could be generated."
Mr Burnham said the programme would be "pared back" to its core elements, although he said he could not say what these were because commercially sensitive talks with suppliers were taking place.
Mr Burnham denied the system had gone over budget and said it had already brought improvements without which the NHS could not function, including the "choose and book" system patients can use at GP surgeries.
The Tories and Lib Dems have been calling for the IT system, which has been hit by costly delays, to be axed.
The BBC's Nick Triggle said it was ironic that delays to the NHS IT project may have actually given ministers scope to save money.
Ever since it was launched in England in 2002, the £12.7bn project has been plagued by problems, meaning just £4.5bn has been spent so far and creating plenty of room for the £600m savings envisaged.
The Conservatives have called for a moratorium on all government computer projects and they have also asked for details of how much the cancellation of the contracts would cost.
Speaking in the Commons, Mr Lansley said: "Oh dear, rarely have we seen a more abject example of the government's incompetence.
"They took central control of NHS IT - £7.5bn central contracts, £5bn of associated costs on top of that.
"Seven years on they are over-budget and under-delivered. The electronic patients record (system) is four years late at the very best, if ever."
Mr Lansley said the system should have been decentralised with local procurement and patient control over health records.
He added: "The government got it wrong and the Treasury are now belatedly putting a stop to this continuing disaster."
Liberal Democrat spokesman David Heath said: "Isn't this the classic case of an IT programme that's too big, too expensive, too late and insufficiently planned?"
The government's "dithering" over cancellations of large elements of the scheme had meant that "eye-wateringly large amounts of money" had been spent, he added.
But the British Medical Association said the system currently scheduled to come into effect would result in the NHS saving money.
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