By Suzannah.Brecknell

30 Sep 2013

In a Special Report published in CSW on 25 September, we examined 12 major projects: three each from the defence, transport, health, and work & pensions departments. We chose projects of a range of types, and covering the ‘traffic light’ risk spectrum from green to red. The text below covers one of the four departments: click here to read our introduction and methodology.

DH proportion of GMMP value: 5%
Number of major projects: 21

London Programme for IT
MPA 2012 rating: Amber-Red

One of the MPA’s earliest jobs after its establishment in 2011 was to assess the Department of Health’s (DH’s) National Programme for IT (NPfIT): a vast scheme to implement a variety of new technologies across the NHS. From an estimated £2.3bn at the project’s launch in 2002, the NPfIT’s price tag had nearly quintupled by the time of the MPA’s review: the authority recommended that the DH “dismember the programme and reconstitute it under new management and organisation arrangements.” The London Programme for IT (LPfIT) is one of these dismembered parts, responsible for the implementation of electronic patient records in acute, community and mental health trusts across London.

Although LPfIT only became a project in its own right in 2011, it’s managing a contract signed with BT in 2003. A total of 33 trusts have received care records systems under the contract, which is due to end in 2015 – when responsibility for buying IT systems will be handed over to individual trusts.

SRO Tim Donohoe points to two specific factors that have contributed to its amber-red rating. Firstly, he says, the “project business case was out of step with the commercial and financial reality”. Changes to the programme had rendered the business case outdated; and because the MPA measures projects’ success against their business cases, it was almost inevitable the MPA would give the project a poor rating.

Secondly, Donohoe points to difficulties in calculating and reporting trusts’ calculations of projects’ benefits. Both of these factors reflect some of the key problems with the NPfIT – and particularly its care record systems. Under the programme, long contracts for products that had not been proven – or, in some cases, even developed – were signed quickly in 2003, with little clinical involvement and without a clear picture of what trusts required. This led to subsequent changes in scope and problems with delivery, resulting in repeated contract renegotiations.

In London, these renegotiations cut the number of systems to be delivered, but increased the complexity of those that survived – so costs didn’t fall in line with the reduced scope. A ‘Statement of Benefits’, covering the whole NPfIT and published by the DH in June 2013, found that by mid-2012 the LPfIT was forecast to cost £1,245m and produce benefits of just £861m.

Given this, it’s not surprising that Donohoe describes one of his key objectives as “making sure that the NHS has the ability to derive benefit from the systems,” so that trusts are more effective and have better patient outcomes. This, he says, is “not something that can be driven from the centre”: success will depend on good local leadership, so he’s concentrating on supporting trusts by sharing best practice and helping to solve problems in the systems.

Donohoe says a “refreshed business case has been produced”, addressing some of the problems identified in the MPA review. Isn’t this just shifting the goalposts again? He argues that in the interests of transparency, it’s better to have a business case which “accurately reflects where you are going and how things are currently being done” than to persist with an old case when “time has obviously changed the environment”.

The MPA is scheduled to carry out another review of the project in December. Though the project’s size and scale will always make it high risk in the MPA’s eyes, Donohoe is cautiously hopeful that – given the refreshed business case and the focus on producing benefits – his team will get “to a position where the status can be trending towards green.”

N3 extension
MPA 2012 rating: Amber

The N3 extension is another child of the National Programme for IT, but one with a far happier history than the LPfIT. The N3 Network is a broadband service connecting all NHS organisations, and by the time the MPA carried out its 2011 NPfIT review it was described – along with several other infrastructure strands of the NPfIT, such as NHSmail – as a “mature” service that forms “an essential underpinning to NHS operational activities”.

While the N3 has been a success story for the DH, its days are numbered: the department is preparing to move onto the Public Services Network (PSN): a ‘network of networks’ that aims to unify the provision of broadband and other network services across the public sector. The current N3 contract is due to end in March 2014: it was originally set to run until 2011 but has been extended twice, hence the project’s name – most recently, to enable the department to plan for an orderly transition to the PSN.

A spokesperson for the Health and Social Care Information Centre – which is now responsible for managing national IT systems across the health sector – explains that the project was rated amber because the MPA reviewers “felt that there had been insufficient alignment with the programme to deliver the successor to N3.”

When the MPA was reviewing the project in late 2012, there was still uncertainty about what that successor would look like: in November 2012, CIO Magazine reported that decisions on the future of N3’s replacement would not be made until early 2013.

That picture is now clearer, with plans to migrate N3 users to a new PSN for Health (PSNH) network, and HSCIC has done a number of things to address MPA concerns. It has increased the size of the PSNH project team, given it new people with skills and experience that it lacked, and created greater integration between the N3 and PSNH teams.

The project’s spending in 2012-13 was, at £120.3m, £6m more than its forecast budget. This was caused by delays in the GP Next Generation Access programme, whose aim is to increase the bandwidth of the N3 network for most GP surgeries and other small health sites in England. The delayed migration meant that £15m was carried over from 2011-12 to the 2012-13 budget, but the team was able to offset this increase with efficiency savings elsewhere.

The project business case has been reset to reflect these changes so that, like the LPfIT, it is now reporting against a case that reflects current reality. This, alongside the measures to improve its integration with the PSNH team, may help to set the project on course to move to a green rating next time round.

IMS3 (Information Management Service 3)
MPA 2012 rating: Green

IMS3 began in 2010, as the DH’s senior leadership team began to prepare for the end of a contract providing outsourced desktop services (for example, email and room booking software). Rather than simply transferring its existing system to a new contractor, the department chose to build a new, cloud-based shared service that could adapt to the organisational changes which were expected in the health sector.

The project has now been formally completed, and a new system – known as Open Service, and provided by Atos – had been rolled out to 8,000 users across six organisations by August this year. The total cost of the project is expected to be £139m, of which £74m had been paid out by June 2012.

The project was rated green in the MPA’s annual report, despite running three months behind schedule at that time. According to SRO Bob Armstrong, the DH’s head of IT futures and shared services, this is because the department left itself plenty of time to deploy the new system, so delays were not likely to affect the project’s overall aims or damage IT services.

Both Armstrong and Gary Smith, an Atos client executive who led the project for the supplier, say that the project’s success is rooted in careful preparation. The pre-procurement phase of the project, explains Armstrong, involved extensive engagement with the DH bodies which the department hoped would join the shared service, in order to understand their needs and agree the scope of the project – thus increasing the chances of them actually taking up the service. His team also spent several months in early 2011 engaging with potential suppliers, so they started procurement with a “precise and specific” idea of what they wanted. All this planning, says Smith, made it easier both for suppliers to bid for the project, and for the department to compare bids. The procurement process itself took just 72 days.

Once the project’s scope had been agreed, says Smith, the department stuck to the plan as far as possible – and where changes did prove necessary both parties took a “pragmatic” approach, aiming to keep changes to a minimum rather than adding “all the bells and whistles”.

Another factor in IMS3’s success was close collaboration between DH and Atos. A joint team was established, with around 200 Atos staff working on-site in DH buildings. This relationship helped to resolve problems that inevitably arise as new systems are rolled out. Instead of “hiding behind the contract”, imposing fines on suppliers as problems arose, Armstrong says he preferred to “have a frank conversation” about what had gone wrong and how to respond.

The DH’s decision to build a completely new system was a “brave but well-calculated” one, says Smith. It was certainly a more risky approach, particularly given the massive organisational change underway at the time. But that risk has paid off: as Armstrong puts it, “if we hadn’t been brave, we would have been sewing up a second rate IT system”.

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