Legal costs associated with dismantling the last government’s programme to computerise the NHS in England now add up to more than £37m, a report by MPs reveals today.
Documents published by the House of Commons Public Accounts Committee show that, in a single case, £31.45m has been paid via international firm DLA Piper in one case, which is now in arbitration.
The committee says that despite announcing its intention to ‘dismantle’ the NHS National Programme for IT in 2011, the NHS still expects to pay £9.8bn for the programme - including the legal costs of renegotiating and exiting contracts with IT suppliers.
Litigation over the cancellation of an £896m contract with Fujitsu accounts for the vast bulk of the spending, the committee reports. The committee heard that the contract was terminated in 2008, but the dispute is still ongoing with both parties seeking compensation.
The outcome of arbitration is not expected until December. According to papers published with the committee’s report, the total costs in respect of the Fujitsu case are £31.452m, which have have been paid to DLA Piper LLP. However, it says that the total includes third-party costs, such as those for counsel and expert witnesses, where invoices are routed through DLA Piper.
In addition, £3.113m has been paid to US firm Milbank Tweed Hadley & McCloy LLP for commercial support in the management of the Fujitsu contract and in the transition of services to the new contractor, BT.
Meanwhile, legal costs for the re-setting of contracts worth £3.1bn with Computer Sciences Corporation (CSC) add up to £2.9m, the committee reports. Of this, £2,639m has also been paid to DLA Piper, along with a further £2,702m for legal support in respect of other national programme contracts.
The committee concludes that after the ‘sorry history’ of the national programme, it is sceptical about whether the current government can achieve its plans to make the NHS ‘paperless’ by 2018.
Richard Bacon, a Conservative member of the committee, said that the story has implications across the public sector. ‘It should be plain to anyone that we are witnessing systemic failure in the government’s ability to contract.’
The Public Accounts Committee’s report is available here.