Government reveals CfH underspend

16 Jul 2008

NHS Connecting for Health underspent on both capital and revenue in the last financial year, due to the slow pace of care records service implementations.

Figures released by health minister Ben Bradshaw reveal that the agency spent £668m on capital work in 2007/08, £229m less than the £915m budgeted for the year.

It also spent £507m on revenue, £100m less than the £607m budget, the minister declared in a parliamentary written answer this week.

The figures cover the National Programme for IT in the NHS and CfH’s business costs. But a CfH spokesperson told E-Health Insider that the underspend was due to delays in delivery of the CRS.

“To protect the taxpayer, the programme's contracts were constructed on a "payment on delivery" principle,” he said. “The delays to the care records service mean that payment for these items is correspondingly delayed… lower than expected payments reflect the slower than expected pace of implementation.”

The figures show a continued trend of underspending on the programme. Last year, EHI reported that the agency had underspent £828m in the previous three financial years.

Bradshaw was responding to a question from Conservative shadow health minister Stephen O'Brien.

Link

Hansard reference

Joe Fernandez

Reader's Comments

So...

16 Jul 08 15:43

...as previously reported and widely disbelieved, NHS CFH is NOT overbudget.

underspend yes, product no

mr.acute.cio@live.co.uk

16 Jul 08 16:41

What is the use of a budget if it not being used for its purpose. We would be better of with (and desperately need) quality systems (product) than an underspend.

Re: Underspend

16 Jul 08 19:10

My economics is a little rusty - but doesn't underspending by delaying delivery mean that more money will eventually have to be paid for the same deliverables?

Something to do with inflation and the "time value of money" if I remember correctly? But a nice attempt to make a virtue out of a slippage none-the-less!

It's not the budget that we don't believe!

17 Jul 08 09:08

Errm... no. It's not the budget that we find incredible - it's that so much money can be budgeted and spent for so little output.

Payment on delivery?

17 Jul 08 09:38

>>£668m on capital work in 2007/08, £229m less than the £915m budgeted for the year<<

Er .. that would mean that 73% (668/915) of what was expected has been delivered.

So...

matthew.johnson@ohis.nhs.uk

17 Jul 08 09:47

Should we complain that the underspend proves that they're not doing enough? ;-)

? Standby Cost = Saving

17 Jul 08 13:56

This is known in the Project Management trade as 'Standby Cost' or Idle Cost ..... :)

Can't Win

17 Jul 08 15:52

If CFH had overspent they would be crucified, yet judging by the comments an underspend is also a bad thing. Maybe next year they will forecast to the pound and still get crucified

RE: Can't Win

stressfreedave@hotmail.com

17 Jul 08 17:23

If CfH overspent but the end product was outstanding, then they may not get complained about. The issue is they have not deliverd what was meant to be delivered and there are problems with what they have deliverd. Imagine having a builder saying he has underspent his budget for your house, but he has fallen behind on the timetable and what there is is not as good as he claimed it would be. Would you praise the builder?

Granted there is a difference between a few grand for the builder and the proposed £12 billion for the new NHS database (which experts told the DoH would not work) but the concept is the same

Under Budget?

26 Aug 08 11:11

Surely CfH will be under budget because it hasn't provided the bulk of the NCRS functionality yet and doesn't have to pay for it until supplied by the suppliers? If it had provided what it had planned to provide by Aug 2008 - and that had cost less than the allocated amount - it could then claim to be under budget. This claim appears to be the result of an an artifact in the process surely?