The National Audit Office has confirmed that it will launch an investigation into the value of the National Programme for IT in the NHS, focusing specifically on the £546m contract that was awarded to BT last year.

The decision to run an investigation follows a request made in September by Conservative MP and member of the Public Accounts Committee, Richard Bacon.

Bacon, who has followed NPfIT since its inception in 2002, wrote to Amyas Morse, the head of the government spending watchdog, asking him to examine the BT contract.

This was signed in June 2009, and covered 25 installations of RiO in mental health and community settings, support for eight (now seven) existing Cerner sites in the South of England, and putting Cerner into four (now three) Greenfield sites in the South.

In his letter, seen by E-Health Insider, Bacon said he understood that the typical cost to the NHS of a RiO-based implementation is £500,000, and that "even at £1m for each installation this would still only add up to £25m."

He added: “If the generous sum of £1m per year is allowed for support at each of the seven Cerner sites, the cost over five years for the seven sites would be £35m.

"If the cost of the Cerner installations at each the three new sites were £10m – which is what NHS sites would typically expect to pay for such a deployment – the total cost would be £30m.”

Bacon therefore argued that the multimillion pound deal could be worth as little as £100m.

He added: “The remaining £446 million is, in my mind, not accounted for, and so raises questions of the proper conduct of business and the proper use of public money.”

A spokesperson for the NAO told EHI: “We are doing some work looking again at NPfIT and that will include the price of the BT contract that was signed last year.

“Following the audit the results are likely to be presented to the Public Accounts Committee in the form of a memorandum and there is likelihood that there will be a hearing.”

EHI understand that the audit will be complete by the end of March 2011 but that the precise remit is still under consideration.