CONGRATULATIONS to the NHS for successfully ensuring that it is Accenture, rather than hard-pressed British taxpayers, that picks up the £260 million bill for the bungles in the computer integration programme.
It is not the first time that a sizeable chunk of IT expenditure has gone awry. Institutions public and private, here and overseas, have rued umpteen days when they agreed to let the anoraks in for a tech-spec upgrade. NHS procurement authorities would have been naive if they signed a contract that left them marooned with a bucketload of cost when the music stopped. Or in this case, when the system crashed.
So it is good to see that our health authorities have not been caught napping. Nor is Accenture alone in being left financially responsible by the NHS, if the iSoft share-price reaction is a guide. A massive 16 per cent was wiped from the market value of iSoft, a UK- based provider of health service IT, as investors ran scared at the thought that it could suffer as Accenture suffered. The NHS, it can be assumed, has insulated itself from the ever-present risk of cost overruns from many if not all similarly positioned suppliers.
Stakeholders in Accenture, iSoft and those many other businesses with contracts to serve the NHS, will want questions answered after yesterday’s £260 million bad news event. The bigger loser, however, may be the NHS itself. The 1.3 million employees of the institution will pay a price. So will the 60-odd million actual and potential patients.
All would-be suppliers will approach the NHS with greater circumspection. And if they do, the congratulations enjoyed by the NHS could sour into commiserations.
Why? Well, if you were in Accenture’s position, would you think twice about dealing with the NHS? You would, surely, be forgiven for thinking three or four times before agreeing to do any serious or long-term work for the institution.
The sheer size of the NHS means that it is hard for any supplier to turn away from opportunities that present themselves. The NHS has an IT requirement as large as it is obvious to anyone who has recently undergone treatment. But there comes a point when suppliers will conclude that the NHS is more trouble than it is worth.
Suppliers might feel obliged to hold up their hand and take responsibility for any errors made. They might be prepared to shoulder some of the risk inherent in any supply arrangement. If the price of the contract reflects the execution risks, firms such as Accenture and iSoft may still be willing to engage. The NHS, incidentally, said yesterday that the Accenture contracts were priced in ways that took account of these risks. But supplier firms will also wonder whether they can really trust the NHS to respond to their needs in a reasonable way. This is not to say that the NHS should attempt to build in-house capabilities for things such as IT.
Nor would it be right to conclude that the NHS is riddled with sub-standard doctors, nurses, managers, porters and cleaners. All good evidence suggests that as a country we are enormously lucky to have such talented and committed people working in the NHS. But it might mean that the size and structure of the NHS is impossibly unwieldy. If, as an organisation, the NHS is unwholesomely cumbersome, the skills and talents of individuals will be diluted. They may disappear.
America hypocritical on trade
ALAN JOHNSON is not always renowned for his frankness - for instance over his claimed savings on public sector pensions or the future of the Royal Mail - so it was doubly gratifying yesterday to hear the Trade and Industry Secretary lay it down straight to the Americans.
Hypocrisy is a potent charge to lay against the country that likes to parade itself as the champion of free trade. It does not just mean that America fails to live up to its ideals, which would come as no shock. US agriculture, broadcasting, airlines and merchant shipping all enjoy some legal protection against foreign competition.
Mr Johnson charges that the protectionist leaders of Congress, if not the Administration, have been lecturing the rest of the world on the need to allow foreign ownership of key industries when that is the opposite of what they believe themselves. As Mr Johnson says, “there cannot be one rule away and one rule at home”. This argument is often directed at the French, but they are not guilty of hypocrisy. They do not pretend to believe in free trade or allowing even fellow Europeans to own their businesses.
DTI thinking on trade has long been exemplary, but sadly has little effect on EU policy. Mr Johnson’s plea for concessions to save the Doha Round was aimed mainly at his former colleague Peter Mandelson, the European Trade Commissioner.
When it comes to allowing foreign takeovers, the UK has been true to its principles. Dubai buying P&O caused no trouble over here, which made it doubly peculiar when America, home of multinationals, blocked most of the bid.
Laptop losers
ONE little-noticed move in last week’s Budget was the abrupt scrapping of the popular Home Computing Initiative. Out of the blue the Chancellor pulled the plug on this scheme that was well liked by the lowincome working families he professes to want to help. Introduced in 1999, the Home Computing Initiative enabled employers to provide laptops or PCs with a value of up to £2,500 to their staff free of income tax and NI.
More than half a million households have taken part in the scheme, which has the advantage of spreading payments over three years and taking them straight out of salaries. Scrapping the scheme will save a paltry £150 million a year but, as the CBI argued yesterday, surely that is a price worth paying to help to build a computer-literate society? It looks like an own goal for a Chancellor who is desperate to promote the UK as a knowledge economy.
Size matters
SMALL is beautiful. Small is also eminently sensible for a housebuilder such as Barratt. Housebuilding land is in short supply. At the same time there are hordes of people who want to own a home. Many of these are young and need no more than a handily located pied-à-terre. Since young would-be home buyers also tend to be financially stretched, it makes sense to build small, affordable, units. One wonders how long the iPads constructed by Barratt will remain affordable, however. But then we’ll get the iPad nano, no doubt.
