Will the public accounts committee's damning report on the Read codes project wreck the NHS's forthcoming information technology strategy, asks Peter Mitchell

One of the more remarkable aspects of the Commons public accounts committee's report on the Read codes affair is how little criticism it makes of James Read himself.

Apart from some comments on his poor handling of personnel issues, and his arbitrary payment and subcontracting practices, there is almost nothing in the report which reflects badly on the inventor and developer of the Read codes patient records system.

Perhaps there is not much point now in wondering exactly why Dr Read so generously handed 128,000 of the health service's money to a departing colleague in lieu of notice, nor in asking whether the codes were worth the 1.25m the NHS's information management group paid him for them.

But the PAC did note disapprovingly that the NHS Executive now has no record of how it had justified that figure as good value, nor even whether it had ever been approved by the Treasury.

The report marks the last step of a long journey - begun by HSJ three years ago - that has exposed 'serious failures of management' by the IMG.

The PAC report severely condemned these failures. It calls the IMG's arrangement with Dr Read 'wholly unacceptable', given the conflict between his position as owner of Computer Aided Medical Systems - the company given exclusive distribution rights to the codes - and his job running the NHS centre for coding and classification within the IMG.

The report draws unfavourable attention to the lack of any documented explanation of the NHS Executive's generous payments to Dr Read and others for the codes.

It lists a 'serious catalogue of failings' in the management of the centre.

It complains that nothing was done about these problems until the National Audit Office forced the issue in September 1996 - more than 18 months after HSJ first publicised the coding centre's problems.

It complains that the project management on the Read codes programme seems to have been as feeble as that previously seen in the hospital information support system initiative and the Wessex regional information support programme fiasco.

It claims that 32m has so far been spent on the Read codes without anyone having made a properly structured business case or cost-benefit analysis for it, and with little success in the hospital sector.

Many of these 'important and basic' failures, as committee chair David Davis called them, have passed into ancient history. But what of the future?

Should the rest of the Read project go ahead, at a potential cost of 'many times' that amount over the next five years, the committee wonders?

Ironically, if the PAC's conclusions (see box) are taken literally, the worst legacy of this sad affair could be a 'hobbling' of the NHS's ambitious new information technology strategy.

That strategy was written months ago by IMG head Frank Burns and is still apparently parked in some ministerial pending tray.

The PAC says the NHS Executive should not undertake any major IT project without first commissioning an independent body to evaluate it. And that includes the Read codes - which are certainly part of Mr Burns' strategy.

The committee's conclusions are partly influenced by the NHS's previous IT failures. 'We have commented before on the failure of the NHS Executive to adopt sound business planning for investment in IT, in our reports on the HISS initiative and the Wessex regional health authority RISP,' says the report.

'It is a serious failure... that again it did not adopt sound project management arrangements.' Paraphrased, that means: 'Oh no. They've fouled up again.'

But the last thing Mr Burns or his successor-in-waiting, Ann Harding, needs is to be hamstrung by that sort of constraint, especially with the strategy already severely delayed - supposedly because of budgeting disputes.

In fact, NHS chief executive Sir Alan Langlands told the PAC he could not accept its recommendation to suspend all work with the Read codes, saying the NHS would have to push ahead with it regardless, or risk falling behind.

But he had to admit that, even now, Read version 3 is working 'in part' in only 12 hospitals. Sir Alan's objection didn't stop the same demand being heavily stressed in Mr Davis's summary of the PAC's findings last week.

Indeed, the committee emphasised that the review 'should be prepared to look hard at alternatives' and - significantly - that the NHS Executive 'should not feel locked into using the Read codes [just] because they have spent so much money on them'.

And the PAC may want to consider just why it has taken the NHS Executive so long to get moving on its independent review of the Read codes - promised by Sir Alan back in February.

That contract has still not gone out to tender - and will not be complete until some time next spring.

Imagine this glacial progress enforced on every component of the new strategy - electronic medical record software, GP-hospital appointment booking systems, online hospital performance information and telemedicine.

If that happens, the medical IT industry may as well pack up and go home without even waiting for the millennium.

The Purchase of the Read Codes and the Management of the NHS Centre for Coding and Classification. Public Accounts Committee. Stationery Office. 8.80.

PAC's three main recommendations

The NHS should in future commission independent cost-benefit- risk evaluations of any major IT project - including the components of the new IT strategy - before moving beyond the pilot phases to implementation.

The results of the evaluation of the Read programme should be made public, in order to try to rebuild the service's shattered confidence in the system.

There should be proper governance arrangements for NHS bodies to avoid the conflicts of interest and weak control mechanisms that led to so many problems at the centre for coding and classification. In future the NHS Executive must issue guidance that the service should not employ people to develop or promote goods in which they have a financial interest.