Tag Archives: System

How Labour WASTED £12.4 billion on NHS IT System


I originally wrote this article over two years ago, but I am re-publishing it in the light of the latest success of the worldwide hacking attack that has hit the NHS so hard.

This blog is essentially about property and general money matters, so admittedly this is a little out of its normal scope. However, it certainly IS also about money and, given that Labour are endlessly preaching about spending more of our money on their sacred cow, the NHS, I feel compelled to try to remind people of Labour’s incredible ability to waste massive amounts of our money on it.

The way the NHS has been affected by the latest worldwide hacking attack underlines the low quality of senior management in the NHS. This though is not a party political failing, more one of complacent and inefficient management.

NHS Computer System – what was it?

Simply put, it was envisaged that it would be a national patient record IT system, linking health professionals, hospitals, GP practices etc. The project was originally started in 2002, with a total budget of £2.3bn envisaged! Imagine you asked a builder to estimate for some work on your house and he quoted £50,000 but when he gave you the bill, it was for £269,000!

In 2005 a government agency, grandly called NHS Connecting for Health was formed to administer the project.  Various private IT companies were subsequently awarded contracts by the Department of Health and the whole bloody fiasco was presided over by a succession of ever so well-meaning Labour Secretaries of State for Health. So let’s remind ourselves of those names…

The Ministers Responsible

Alan Milburn  (October 1999 – June 2003)
John Reid  (June 2003 – May 2005)
Patricia Hewitt (May 2005 – June 2007)
Alan Johnson  (June 2007 – June 2009)
Andy Burnham (June 2009 – May 2010) (as of December 2014 – current Shadow Secretary of State for Health)

Yes Minister

As usual, it seems impossible to uncover all the names of the useless senior civil servants in the DoH and this is the way they always work, by remaining effectively shadowy and anonymous. Thus we have phrases like ‘The DoH decided that’ or ‘The DoH awarded the contracts to’ etc etc.  It’s as if a huge stone building in Whitehall actually signed off poorly drafted contracts. Various names are available however, such as David Nicholson (associated with the Mid Staffs scandal), Richard Granger, Gordon Hextall, Richard Jeavons and Harry Cayton.

Saving contractors money

Richard Granger is of particular interest. He was the Director General of IT for The NHS, on a basic salary of around a £280,000 a year. And that was back in 2006 when £280,000 a year was good money. The ridiculous costs for this project should have been lessened by clauses in their contracts which made the contractors liable to pay massive compensatory sums to the DoH in the event that they withdrew from the projects.  Accenture, just one of the contractors, withdrew in 2006 and, instead of charging them £1 billion, as their contract allowed, it’s reported that Richard Granger charged them just £63 million – a massive saving for Accenture of about £937 million – and an extra cost of £937 million to all of us! Granger apparently started his career with Andersen Consulting…which subsequently went on to become Accenture. Interesting.

The project was FINALLY abandoned on 2013 with total costs of around £12.4bn – a revised cost that had already been predicted by the National Audit Office as far back as June 2006.

‘Doctors and Nurses…Doctors and Nurses’

When justifying yet another raid on our pockets in the form of higher taxes, the Labour Party are fond of endlessly talking about ‘Doctors and Nurses, Doctors and Nurses’ and that if we want enough ‘Doctors and Nurses’ we must pay even more tax.  So, next time you hear the lovely Andy Burnham bleating about ‘creeping privatisation’ by the Tories and  preaching about ‘Labour’s Commitment to properly funding the NHS’ and that the NHS is only ‘safe in their hands’…remember The Great NHS Computer System Scandal. Mr Burnham admittedly came in on the tail end of it but it WAS a Labour project from the start.

This Labour Government Project WASTED £12.4 billion of OUR MONEY. They might as well have stuffed it all down the nearest drain – except of course that it made a few (private) IT companies very rich indeed and helped pay the mortgages of a number of obscenely overpaid civil servants like Dave Nicholson (‘Sir David’ to the sycophants in our society), Richard Granger and many others.

£12.4 billion – How else could they have spent it?

I’ve done a few back of fag packet calculations (as Nigel Farage would say). Naturally they are very approximate, although nowhere near as approximate as government estimates of costs!

  • Assuming an average salary of £22000 pa…approximately 563000 nurses for a year or 28000 nurses for 20 years!
  • Assuming a very generous salary of £100,000 pa we could have employed 124000 GPs for one year.
  • Don’t know how much a hospital costs but I reckon we could have a had a few of them for £12.4 billion.

And finally, if they hadn’t WASTED this mountain of money maybe the inappropriately named NIHCE would have been able to license more expensive life-saving drugs and therapies.

Of course, this scandal is symptomatic of how government and the civil service waste our money on an industrial scale. I seem to remember that Phillip Green was commissioned by the Government in 2010 to find ways of saving cash. He estimated that up to £20 billion a YEAR could be saved with more focussed and aggressive procurement strategies.

I have to credit the majority of the informational details here thanks to the great Wikipedia. So if you don’t believe me, just check it out. Of course I want a great NHS that is free at the point of delivery only to settled citizens of this country, but we don’t have to pay more tax for it, they just have to stop wasting our money.

As a footnote, when I entered the search term £12.4 billion NHS Computer System into Google, even Google couldn’t believe it and said ‘Did you mean £12.4 million?’


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