The architects of the NHS National Programme for IT were fond of boasting that they had negotiated eye-wateringly tough contracts with suppliers that would punish failure and reward success.

Yet this week it emerged that the Department of Health will have to pay Fujitsu more than £700m in damages at the end of a long legal dispute over the company’s departure from NPfIT in 2008.

This shows just how completely those in charge of the programme failed by trying to manage digitisation and service reform by contract and penalties.  How did we get into such mess?

Encouraging the others  

Famously, Richard Granger, the original director general of NHS IT, promised he would manage suppliers to the national programme by shooting “huskies” that failed to deliver.

The idea was that the weaker dogs would be shot and fed to the rest, in order to sustain them and to encourage them to pull harder. 

But now, as in the second reel of a horror movie, the Japanese husky that was cut loose and taken out into the snow has come back to bite with a vengeance.  

Big contracts, flawed plans

Fujitsu was the last of NPfIT’s local service providers to be appointed. It was awarded an £896m contract in 2004 to modernise electronic record systems across the South of England. 

For hospitals, this meant clinical software supplied by IDX. However, there was a switch from IDX to Cerner Millennium in 2005, after GE bought IDX and pulled it from the UK. This is believed by many to have been where things started to really seriously go wrong. 

In a hasty change of contract, the suits from NPfIT asked Fujitsu in the South, and BT in London, to deliver the version of Cerner Millennium running at Homerton Hospital. 

Unfortunately, Homerton’s version of Millennium didn’t work very well outside Homerton and wasn’t easily transferrable to other NHS trusts. 

It required a huge amount of local configuration at each new site and lacked a core patient administration system that reflected the basic model of NHS healthcare delivery, including the key concept of finished consultant episodes.  

Fujitsu duly took the Homerton version of Millennium and there followed a series of fraught implementations, plunging several trusts into crisis.


First up, in 2005, was small, specialist trust the Nuffield Orthopaedic Centre. It suffered problems that nearly broke the organisation, ranging from missing appointment records, to inability to report on wait times.

Even so, another five trusts received the system before it was installed, in February 2007, at Milton Keynes General Hospital. The following month, some 79 staff wrote an open letter to the management stating that Millennium as installed was "not fit purpose.”

The Milton Keynes trust board subsequently said the implementation “resulted in near melt down of the organisation.”

End of one era

Richard Granger announced he was to step down later that year. It was against this backdrop that Fujitsu’s contract was terminated.  It’s never been clear how much this was deliberate or by accident.

Negotiations to 'reset' the Fujitsu local service provider contract had been underway since July 2007 but broke down. Fujitsu said at the time that it withdrew from contract re-set negotiations “as it did not feel there was a prospect of an acceptable conclusion.”

As a consequence of the withdrawal, the NHS issued a contract termination. The termination notice was issued by Granger’s long-term deputy Gordon Hextall, who took up the reigns at NPfIT after Granger departed.

At this point, Fujitsu had nine sites live with Millennium; although one of these, Worthing and Southlands Hospitals NHS Trust announced that it was going to switch off the system and move back to its Sema-Helix software in January 2009.

Eventually, BT was brought in to support the remaining ‘live’ sites, get them onto the version of Millennium that it had developed for London, and to put this instance of the system into three ‘greenfield’ sites at Bath, North Bristol and Oxford.

Even so, in the seven years since Fujitsu left, much of the NHS in the South of England has failed to get much needed clinical IT systems, setting many hospitals back a decade. In addition, the taxpayer must now pay damages to the supplier for reasons that remain unclear. 

Fog of legal disputes

Just why was Fujitsu ‘exited’ from the programme? Details have never been released – but given the consequences they should be.

The judgement on the case has not been published, either. Indeed, the progress of the dispute has only surfaced occasionally. Last year, the Commons health select committee, heard that it had just gone to arbitration, having run up £31.5m of legal charges on the DH side alone.

The outcome of that arbitration has only been reported second hand. Now, it should be made properly public. It’s not just that taxpayers’ money has been wasted on an epic scale. Mistakes were clearly made that should not repeated.  

£700m – still a lot of money

Since 2008, we’ve had a global economic crisis of such a scale that £700m has almost become devalued and debased. But let’s not forget just how much benefit £700m could have bought the NHS if spent on clinical IT alone. 

It’s a greater sum than all the IT investment the government has made available in the past two years through the two technology funds – of £240m and £260m – and the Nursing Technology Fund of £100m.   

Even those legal fees of £31.5m are an awful lot of money for claret and wigs that could have been invested in NHS digitisation – they’re about a quarter of the cost of primary care IT annually.

Just what advice were the DH and Cabinet Office receiving? And perhaps just as interestingly; did they act on it?

Politicians will, of course, say that it all happened a long time ago. It’s absolutely true that time has passed, that we’ve had a change of government, and that thinking has changed since the original decisions were taken; although key figures from the time are still involved in NHS IT nationally.

But the decisions on how to manage the fall-out and reach a conclusion have been much, much more recent and include the current leadership at the DH and Cabinet Office.

This is public money – and the public interest

At the moment, neither they nor the company is talking. In a statement, a government spokesperson told EHI: “Fujitsu is an important supplier of IT services to government. The government does not comment on contractual disputes with suppliers.”

And the company said: ““Fujitsu has been a strategic partner to the UK government, implementing critical IT for the last 40 years. We are committed to working closely with the UK public sector for the next 40 years and beyond. However, we do not comment on our government contracts.”

This is not acceptable. Transparency is needed on the decisions taken in 2008 and on the arbitrator’s 2014 settlement if we are to make sure that such a failure is learned from and not repeated.  There really is a compelling matter of public interest.