Health service HR system hit by cost and feasibility

The Department of Health is forging ahead with a service-wide HR and payroll
computer system despite growing doubts about the project’s feasibility and

The Shared Services initiative will create the biggest HR and payroll system
in Europe. It is being driven by Number 10 in response to growing frustration
at the lack of central information on NHS employees. Full specification for the
system will go out to short-listed companies later this month.

But insiders contacted by Personnel Today fear that the DoH is grossly
underestimating the cost and practicalities of implementing such a huge system.

Although the DoH says no budget has been allocated, initial estimates that
the system could be developed and implemented for £70m are being dismissed as
optimistic. Two sources close to the process independently estimated the cost
to be between £160m and £200m. This is equivalent to employing 12,500 extra
nursing staff a year.

There is also criticism of the "top-down" way the department has
approached the implementation of the system. Given the costs involved, insiders
say the DoH will find it difficult to win over local health trusts and
authorities which currently use a wide variety of systems.

And the poor track record of government departments in implementing major IT
projects is not inspiring confidence. Implementation problems hit the Inland
Revenue and the Department of Social Security in the past.

A source said, "The Government had enough problems in the past putting
in systems for 50,000 employees, let alone 1 million."

HR directors in health trusts and authorities were made aware of the plans
to press ahead with a single system in January.

But insiders say there could still be resistance.

"The whole thing is the wrong way round. It is not the department
asking health trusts what they want. It is the department saying what it
wants," one said.

"Individual trusts may not want the system and there is no remit for
the Department to say to them, ‘You will have this solution.’

"The consequences of getting something like this wrong are political

The DoH said it has not stipulated any budget in its initial tender and will
not put a figure in its final specification.

Instead short-listed providers will be expected to recommend their own
budgets for the project.

A department spokeswoman described the £70m figure as "way off

There is also consensus that current systems do need to be overhauled. The
SPS payroll system used by many authorities is 25 years old and the DoH says it
is becoming increasingly difficult to update.

By Helen Rowe


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