Friday, 8 June 2012

Dead fish Department of Health has lost sight of the "public" in "public service" – Sir David Nicholson KCB CBE

Key Stage 3 is that phase in the education of our children which takes place in England between the ages of 11 and 14. The syllabus is demanding and includes a course on management consultancy. No mere ivory tower training divorced from the real world, students are expected to give policy advice to Whitehall departments. Advice on procurement, for example, much needed by the Department of Health.

All procurement should be centralised, said the team from Stretchford Middle School, so that stakeholders in the NHS all pay the same price and, with the economies of scale available to the Department, currently spending about £120 billion of our money every year, that price should be a minimum, offering the best value for public money.

Similar advice was given to the Civil Service by Sir Philip Green, of course, on one of his rare visits from Monaco. Philip Green's efficiency purge recommends more centralisation, ran the headline in the Guardian, before going on to spell it out:
The government has little control over the money its own civil servants spend and is wasting billions every year by failing to negotiate the best contracts for phones, IT equipment and rent, according to the Topshop boss Sir Philip Green, who was brought in by ministers to assess efficiency in Whitehall ...

The report identifies massive variation in procurement with one department paying £73 for a box of paper and another paying £8. The most paid for printer cartridges is £398 and the least is £86 ...
As all management consultants know, you hand in your report full of tightly argued recommendations, you go back to Monaco (or Stretchford) and what does the stupid client do?

Something stupid.

Like ignore your recommendations.

Generally true, that is not the case at the NHS. Not by a long chalk. Sir David Nicholson KCB CBE, Chief Executive, runs a tight ship. The National Programme for IT (NPfIT) divides England into five regions, the contracts are held by just two organisations, (CSC-3 and BT-2), and they all come together at just one central point, CfH, Connecting for Health, as recommended.

And now, a cautionary tale.

Some poor deluded soul at the Whittington Health NHS Trust went out on his or her own and bought an electronic patient records system (EPR). They could have got it from BT, who have the NPfIT contracts for London and for the South of England. But, no, poor benighted fools that they are, lambs to the slaughter, they set out to do the procurement themselves.

BT's EPR is an American package called Cerner Millennium. In London, Cerner Millennium costs £31 million on average. And in the South of England, health trusts pay an average of £36 million for the same thing. Almost the same price. Only £5 million different.

And, wantonly ignoring all the added value of Whitehall's magisterial assistance acting energetically exclusively in the public interest, what did the naïve neophytes of Whittington Health pay?

£7.1 million.

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Hat tip: as so often, Tony Collins.

What the students learn at Key Stage 4 is that all the normal rules of logic, arithmetic, business and economics that govern rational open markets break down in Whitehall.

These rules melt in the heat of the close personal bonds between the Department and its suppliers. The Department of Health's friendship with BT and CSC is not a unique example. We have already seen a similar  case of producer capture at the UK Border Agency where Rob Whiteman, the Chief Executive, would rather not mention Atos's name in connection with the immigration computer system breaking down for a month.

These relationships are intense. Too intense to accommodate any other loyalties. Other loyalties such as public service.

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