Friday 1 August 2014
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Friday 1 August 2014 |
By Jill Sherman and Chris Smyth
Taxpayers face a bill of hundreds of millions of pounds in compensation in the fallout from an NHS computer project that was dropped.
A bitter dispute over the failed £11.4 billion plan to digitise medical records has been settled by arbitration in favour of Fujitsu, the contractor, after the company threatened to sue the government for ending its deal.
The decision to make the government pay out, made behind closed doors but confirmed by insiders, has angered MPs, who demanded greater transparency over what they said could amount to a catastrophic mistake.
An influential Commons committee now plans to interrogate key figures involved in the deal to establish why the contract failed and why the government’s legal advice was wrong.
Industry sources say that Fujitsu is likely to be awarded about £400 million in compensation in addition to £250 million already paid when the scheme, called the NHS National Programme for IT, began to falter.
The government will also have to foot Fujitsu’s legal bill of nearly £50 million, in addition to its own legal costs of £31.5 million. The Cabinet Office, the Department of Health and Fujitsu refused to comment on the deal.
Bernard Jenkin, the Tory chairman of the public administration select committee, said he would open an urgent investigation. “This joins a long line of IT fiascos which stretch back to beyond the start of the present administration. However, today we expect new standards of transparency and openness,” he said. “How did the government get into this contractual dispute? How was it that the legal advice was so wrong? I will be asking members of the committee to summon the key figures in this latest debacle to explain what happened.”
Richard Bacon, a Tory MP and a member of the public accounts committee, also said that the Cabinet Office should be much more transparent over the arbitration decision and the compensation award. “There has to be a reckoning. We have to know how much money has been squandered and what could have been done instead,” he said.
“If the people letting the contract have made a catastrophic, gargantuan mistake then there is an opportunity cost. It is the taxpayer who has to fork out money for what should have been spent on the services they need.”
Mr Bacon said that officials and ministers could learn by their mistakes only if they knew how the deal had become a “costly mess”.
Fujitsu was awarded an £896 million contract as part of the government’s failed plan for patient records that could be accessed instantly anywhere in the NHS. Fujitsu made a claim after the government terminated the contract in 2008 as problems mounted.