New health IT system is nearly £5m. over budget

The cost of the electronic patient records system has soared from £17.3m. to £22.2m.

Health & Social Care president Al Brouard revealed the anticipated overspend at this week’s States meeting – just five months after dismissing claims that his committee’s officials already knew the project would run millions of pounds over budget.

‘Implementing a new IT system in a health and care environment was always going to be a challenge and this is evidenced in other jurisdictions,’ said Deputy Brouard.

‘From the most recent review, it is clear that it will take longer and cost more should the scope of works and rigour remain unchanged. The currently agreed funding envelope with an optimism bias of only 2% was in hindsight far too low for such a complex IT programme.’

When the project was initially approved by the previous States, in May 2020, it had an indicative budget of up to £20m., which Deputy Brouard said was later reduced ‘on best advice at the time’.

At the end of March this year, Deputy Gavin St Pier told the States he was aware of advice that the project would end up significantly over budget and asked Deputy Brouard whether his committee had been informed of that by its officials.

Replying at that time, Deputy Brouard said that no overspend was forecast and the project was expected to end up costing about £1m. less than the approved budget, including any contingency spending, although he added that the budget was being reviewed again amid concerns over staff costs and contractual challenges.

Deputy Brouard also revealed this week that the project had fallen further behind schedule.

‘In my May statement, I advised that it was likely that the committee would need to extend the go live date for the first stage into 2025,’ he said.

‘The implementation period for the first stage is now forecast to be by the end of June 2025, with further stages complete by end of June 2026.

‘This timeline has increased because of the inherent complexity of the programme, and this in turn has resulted in additional costs because there is more work to do than originally anticipated.’

Some States members reacted sharply to Deputy Brouard’s statement.

Deputy Adrian Gabriel said he was ‘astounded and flabbergasted that we haven’t got financial control of a large project’ and Deputy Peter Ferbrache labelled the States ‘hopeless’ and criticised ‘people we pay lots of money to’ for poor management of large projects.

Policy & Resources president Lyndon Trott said his committee would not necessarily sanction the additional expenditure required to complete the electronic patient records system and suggested the project may even have to return to the States Assembly for further votes.

HSC has been hit by a series of setbacks to major capital projects in recent months. Only last month it was forced to delay opening the first phase of its redevelopment of the Princess Elizabeth Hospital.

Earlier this year, the Guernsey Press uncovered that the estimated cost of the second phase of the PEH redevelopment had escalated from £120m. to £150m., and Deputy Brouard revealed that States officials had concealed the soaring costs from his committee for nearly a year and that his committee had itself failed to inform Policy & Resources for months.

Deputy Brouard said this week that his committee was told about the overspend on the electronic patient records system on 13 August and informed P&R on 27 August.

‘We now find ourselves in a difficult position having made the decision to replace the old system, which will not be fully supported in the future and which cannot deliver the required benefits,’ he said.

‘In a limited marketplace and being sub-scale, we have little choice but to continue with the modernisation.

‘The committee has looked at alternatives but none are palatable. We do not wish to reduce the testing or reduce the scope for fear that we will not get the benefits of this digital transformation.’