Friday, 20 April 2007

NHS IT debacle

Years behind schedule, loathed by doctors and unlikely ever to function properly, the £12bn upgrade of the NHS IT system could yet overtake the 2012 Olympics as the most expensive turkey in British history. According to yesterday's bitterly critical report on the project by the House of Commons Public Accounts Committee, the final cost could hit £20bn.

Another product of Blair's bright, shiny 'vision' of 21st century Britain, the upgrade should have been finished in December 2005. Instead, it shows all the signs of suffering the same fate as so many other government-managed mega-projects: a slow, lingering and hideously expensive death.

From Concorde to the Child Support Agency, grand ideas have repeatedly suckered ministers into what psychologists call the 'sunk cost fallacy', which is shrink-speak for what the rest of us call throwing good money

Grand ideas have repeatedly suckered ministers into the ‘sunk cost fallacy’ - shrink-speak for throwing good money after bad

after bad. Huge sums have already been sunk into the project, runs the argument, and all that - plus political credibility - will be lost unless it continues.

The fallacy weaves an astonishingly powerful spell over ministers. Only after spending £500m on a computer system upgrade and three years watching it fail did Labour ministers finally do the right thing and throttle the congenitally useless Child Support Agency.

Governments of every political hue fall prey to it. Since 1993, American taxpayers have been bankrolling the International Space Station, which has produced nothing but cost overruns, and whose final price-tag is likely to top $100bn.

About the only good news in the Commons committee's report about the NHS IT upgrade is that, so far, only around £2bn has been spent. That alone is a hefty sum - enough to pay the wage-bill of 10,000 extra nurses for a decade. But unless ministers can cure themselves of the sunk cost fallacy, it will be just a downpayment on a debacle of historic proportions.


Mike said...

If you need the definitve account of the NHS project and what has gone wrong, visit this site set up by 23 academics.

To keep up to date with the project visit

barry monk said...

I recommend following mike's links if you want to get into the real detail of this.

(and I have no idea who Mike is!)

Anonymous said...

Having been a computer programmer (employee and freelance)for over twenty years, for several major companies and former nationalised industries, I can assure you all that 95% of all management and computer consultents are 'cowboys' who prey on gullable, computer ignorant managers who are not spending their own money. Furthermore, 95% of all computer systems are totally unnecessary and not cost-effective. Most commercial systems would operate much better if done manually and clerically. This is not a luddite view but one based on 20 years of insider evidence.