REVEALED: The Man Behind the NHS's £20bn Computer Catastrophe

Friday June 9 2006

The threatened collapse of a software company at the heart of the new multibillion pound NHS computer system leaves Health Secretary Patricia Hewitt facing a potential crisis. If iSoft goes under it takes with it hopes of wiring the NHS for the 21st century any time soon.

The programme is already more than two years late and the cost - originally estimated at £2.3 billion - is now being put at £20 billion. The iSoft drama is just the latest blow to fall on a project which has been battered by politicians and health professionals alike. No one seems to like it. There have been calls for an independent review of the entire programme. Experts have warned that it may never work as intended.

How, it might be asked, did it come to this? The answer to this question should have been public knowledge by now. A report on the NHS computer system was prepared by the National Audit Office nearly a year ago, but it has been successfully stifled by the very people whose decisions it investigates.

This, about which more later, is just one disturbing element in a saga of secrecy and arrogance that is fast building into a national scandal. An Evening Standard investigation into the NHS computer fiasco discloses a trail of hidden decision-making and control freakery that goes all the way back to Downing Street. Indeed, when the veil is finally pulled away from the affair, Tony Blair may well be revealed as one of the main architects of a very expensive disaster.

It was at his invitation that, in February 2002, a distinguished gathering attended one of Mr Blair's sofa-summits at Number 10. Alan Milburn, then Health Secretary, was there with his minister, Lord Hunt; the Chief Secretary of the Treasury was present with other key government officials and, representing the NHS, Professor Sir John Pattison, the director of research.

Mr Blair wanted to expand his vision for health service reform with a computer system that would be the envy of the world. How, he asked the experts, could it be achieved? Ideas were advanced, possibilities explored. Mr Blair liked what he heard.

Apart from one thing. When Sir John Pattison was asked how long it would take, he gave the most optimistic forecast he could imagine. Three years, he said.

Too long, the politicians said. How about two? Sir John knew this was impossible. They eventually agreed on two years and nine months, starting from April 2003.

Those close to the project believe this timetable was unrealistic and that political pressure to produce results within Labour's second term placed a crippling burden on it from the start.

But they soon found a man who thought he could pull it off - Richard Granger, a key figure in setting up the London congestion charge. He was a partner at Deloitte Consulting, aged in his late thirties and a man with supreme confidence in his own abilities.

Indeed, he has suggested his role in modernising the NHS makes him a successor to Joseph Bazalgette, the great Victorian who built London's sewers, or even Isambard Kingdom Brunel, the engineering genius. Mr Granger's predilection for being in complete control has, apparently, earned him a nickname: Pol Pot, after the Khmer Rouge dictator.

He was appointed director-general of IT for the NHS in October 2002. He is chief executive of the agency handling the new computer system, NHS Connecting for Health. His salary, around £250,000, makes him Britain's best-paid civil servant but, as he is swift to point out, it is less than his reward package at his old job with Deloitte. In any case, he says, he saves the health service his annual salary before lunch, most days.

His brief was to bring in four main projects: to create an online booking system for patients and doctors; to centralise electronic records that could be accessed instantly by health professionals in any location; to devise new e-prescriptions and create fast network links between NHS organisations.

This was all agreed and decided without debate or parliamentary consultation. Mr Granger's appointment and the launching of the world's biggest civil IT programme went through on what was, effectively, prime ministerial decree.

The Department of Health produced a document detailing the projected costs which, initially, were set at £2.3 billion. Richard Granger went to work. One of his first moves was to warn potential suppliers that if they breathed a word of criticism about the new plans they would be dropped from the shortlist. To this day, no supplier will talk openly about the NHS IT project without securing the permission of Mr Granger's office.

His management style was soon to echo the obsession with control and secrecy that had become so much a part of the New Labour government. An early example of this came in February 2003 when Mr Granger met doctors at the British Medical Association.

The meeting was arranged so he could tell doctors' representatives of the new IT plans for the NHS and to find ways of consulting health practitioners. At least, that's what the doctors believed.

Dr Paul Cundy, a GP in Wimbledon and the BMA's spokesman on IT in general practice, told me: 'I sat next to him and he asked me how he could get doctors' opinions about the new system. I said he only had to come to the IT committee and we would find doctors for him.' The minutes of the meeting record that Mr Granger said there was a 'desperate need' for the medical profession to tell him what it wanted.

Curiously, he never did approach Dr Cundy or his committee. Instead, advertisements began appearing in medical journals and elsewhere asking doctors to take part in consultation about the new NHS IT programme. It emerged that Mr Granger was recruiting his own medical profession advisers - who were offered a fee - and that each of them was gagged with a strict confidentiality agreement.

Dr Cundy and his colleagues concluded that Mr Granger had been concerned that if he had involved a large and open body like the BMA, his ability to control every piece of information might have been reduced.

'It seemed strange at the time,' Dr Cundy said, 'because we would have done the whole thing for free.'

But the extra cost was the least of the problems. The failure to properly consult and engage the medical profession in the IT programme is now being seen as one of the main factors in its poor performance so far. Of the four projects within the programme - which should have been delivered last year - only one has started to work, the Choose and Book system of making appointments.

This has been rolled out to GPs across the country but, according to a poll carried out by the BBC, they don't like it. The BBC found half of GPs questioned found Choose and Book 'poor' or 'fairly poor'. Dr Cundy said: 'I'm trying to use it, but it doesn't work very well and it's very user unfriendly.'

The problems, he and other colleagues believe, could have been avoided if practitioners had been involved in the planning from the start. Instead, he said, they have had someone else's ideas imposed on them from above.

This is a frequently heard criticism of the IT project. Central control, secrecy and an attitude of 'we know best' in Mr Granger's department have won it few friends.

One critic is Richard Bacon, the Conservative MP for South Norfolk. Mr Bacon, a member of the Public Accounts Committee, is concerned about the way the IT project is heading and especially the awarding of contracts and the secrecy that surrounds them.

'The contracts were drawn up at far too great a speed and without listening to the people who were at the rock face,' he said. 'The lessons of previous IT disasters were ignored. Instead of building the thing up from the people on the ground, they rammed it through from the centre at breakneck speed. It was a recipe for disaster.'

Mr Granger and his department kept such tight control on the contracts that individual hospital and primary care trusts don't know what's in them. This has resulted in some nasty shocks. Health service trusts in the south of England have been forced to hand over £19 million in penalties to a Japanese computer firm, and there are fears that the final bill to hospitals for penalties could be £88 million.

This is because Mr Granger and his colleagues hit on a bizarre plan to save money when they awarded the contracts. They secured discounts on the quoted price by offering companies health service employees. The idea was that IT professionals in the NHS would be seconded to computer firms who would save money on their own staffing costs.

This seems to have been agreed without trusts and others being asked whether they could actually spare the people. In the resource-strapped NHS, of course, they can't. The hospital trusts who have paid £19 million were to have provided 50 employees. When they couldn't find the people, the penalties were called in. The figures show the contract valued each person at a staggering £380,000.

The Department of Health was forced to confirm the £19 million payout after inquiries by Richard Bacon and revelations in Computer Weekly. The magazine and its doughty executive editor, Tony Collins, have been shining a light into the dark recesses of Mr Granger's empire from the beginning.

Using reliable sources in the IT world, Collins and his people have produced a stream of stories about the NHS project. This has not pleased Mr Granger. When he held a press conference with health minister John Hutton last year Tony Collins turned up to report the affair for his magazine.

He told me: 'When I tried to get into the room I was told there were not enough chairs. I said I'd stand, but just as I was about to walk in, Hutton's press officer physically barred my way. They were obviously worried I might ask some awkward questions.'

Mr Collins has asked three separate questions about Connecting for Health under freedom of information rules. So far, none has been answered. Mr Granger's office was asked if he would be interviewed for this article. He declined.

The National Audit Office was due to report on the programme last year but the report was delayed again and again and has still not been published. The reason is that the office has to check facts with the relevant government department.

According to a reliable source, Connecting for Health has used this procedure to bat the report back time after time, demanding changes, querying conclusions and arguing over perceived failings. But Mr Granger and his officials will soon face scrutiny. They are due to appear before the Public Accounts Committee at the end of the month, something Richard Bacon, a committee member, relishes.

He says he has some tough questions for Mr Granger. And, unlike Tony Collins, no one can stop him asking them.

COMPUTERISING NHS communications and records is a project capable of delivering great rewards in terms of speed and efficiency. This is the world's biggest civil IT project, yet the minister responsible, Lord Warner, has warned that the cost will be more than two-and-a-half times the original estimate, and that it will be at least two years late.

Our investigation today highlights the role played by Richard Granger, director-general of IT for the NHS, at a time when financial difficulties at iSoft, one of the software contractors involved, have raised concerns over further delays. The secrecy cloaking the project does it no favours, but there are other, more fundamental problems with the way the scheme is being run. Firstly, the initial timetable envisaged by the Prime Minister was unrealistic. Secondly, the way contractors are being managed looks flawed. Other big public-sector IT projects have a bad history: computerising the courts system and changing the way the Passports Agency, Child Support Agency and Criminal Records Bureau worked all hit severe problems.

Civil servants still seem not to know how to specify what they want accurately and hold contractors to targets and budgets. Ensuring contractors deliver, and applying penalties appropriately when they do not, is a basic task of management. However, the lessons from the NHS IT story are not only managerial. There appears to have been a political failure to get doctors and hospital managers to buy into the project. The British Medical Association had genuine concerns over confidentiality of patient records, for example, and these should have been resolved faster. Centralised authority cannot impose a new IT system, which may mean big changes in costs and working practices, on to GPs and trusts without proper consultation.

The rows over this project are far from over, but the lessons of it must be promptly learnt. The difficulties for the public sector in managing contractors successfully apply beyond the IT world: they must also be applied to undertakings such as the construction of the 2012 Olympic facilities, if these are not to follow Wembley Stadium down the route of delay and cost overrun. That challenge could test the Government's battered reputation for competence to destruction.