The must-read stories and debate in health policy and leadership

The £700m IT shadow

When the Department of Health terminated Fujitsu’s £900m contract to digitise a chunk of the NHS in 2008, no one expected they would still be arguing a decade later.

The dispute has cost the department tens of millions of pounds in legal fees alone, and deadlines for resolution have come and gone with the years.

In June 2013, the then NHS England chief executive Sir David Nicholson told the public accounts committee that the matter should be all wrapped up by Christmas.

This week, HSJ revealed that the end is finally in sight, with the department and Fujitsu reaching an agreement on the terms of settlement.

DHSC has agreed to pay the company a large sum (it’s already paid some). HSJ has been told the figure is in the ballpark of the £700m Fujitsu originally sought.

There will be a few final hurdles which, if the past is any guide, will take longer than expected to overcome.

Final settlement is dependent on resolution of a related dispute between Fujitsu and another IT supplier from that era. That could still drag on.

The collapse of the Fujitsu contract is only one of the many expensive failures from the £10bn National Programme for IT, once described as “one of the worst and most expensive contracting fiascos in the history of the public sector”.

But one of biggest costs of the programme has been lost opportunity.

There has been digital talent exiting (or staying away) from the NHS, trust boards wary of ambitious (or any) IT projects, and the Treasury counting pennies for any NHS programme that mentions “digital”.

Seven years after NPfIT was officially dismantled, momentum for another push for modernisation is finally gathering pace.

In his Expo speech last week, health and social care secretary Matt Hancock still made NPfIT a central feature, saying the NHS need to push through that “catastrophic” failure and stop overlearning the lesson of the past.

As the Fujitsu case demonstrates, there are lessons for which we are still paying the bill.

Two-tier fear at subsidiaries

Transferring staff into a subsidiary company is a risky business.

Staff at East Kent Hospitals University Foundation Trust are going on strike in protest at being transferred, while staff at York Teaching Hospitals FT are also being balloted on industrial action.

Elsewhere in the country we have seen a local authority offering to pay the difference to the trust if it agreed to keep the staff in-house, while in the east Midlands a trust was effectively told to shelve its plan to transfer staff because Matt Hancock was unlikely to approve it.

No wonder the centre has signalled a desire to get a grip on the process, especially when, if unchecked, it could be a VAT issue for the Treasury and infuriate unions.

Trusts transferring staff are quick to say they would be on the same terms they enjoyed previously, but admit the same would not be true for new joiners. So the two-tier charge seems too difficult to deny. On the other hand, trusts are desperate for savings, and staff represent most of their costs.