Pouring money down the drain

April 18, 2007

Dr Grumble points me to THIS post on the informaticopia blog. A mere £72 million down the tubes on a virtual university which was never going to fly.

NHS Direct: about £150 million per annum (but the auditor in 2005-6 made a number of serious qualifications before signing off the accounts, including that it was unable to account for its payroll costs, that it had failed to appoint an internal auditor and that it was unable to provide supporting evidence for 16% of the sample payments examined-so who knows how much it actually costs.) And what this money buys is an unqualified nurse with doubtful insurance sitting on a telephone line advising people whether or not to see a doctor. What a complete waste of money

This is small beer compared to the amount wasted on NPfIT-the national programme for information technology. THESE are the damning conclusions of the committee for public accounts on progress so far. Among the catalogue of incompetent management, the sentence which stands out is this one

The Department has not sought to maintain a detailed record of overall expenditure on the Programme and estimates of its total cost have ranged from £6.2 billion up to £20 billion”

So I can understand some uncertainty about the actual costs at this stage, but a 14 billion pound range seems incredible. It is beginning to look as though the tangible benefits delivered by this system may amount to zero

I’m afraid these are examples of a widespread lack of financial responsibility and common sense in the entire system. On every level money is literally poured away by the sackful, while in hospitals we are told we cannot afford to buy paper to write letters on, or even printer cartridges to print the letters with.



  1. Can’t really comment on this one.

    But any project funded by whichever government will have cost overruns. The government has to contract out jobs like The Millennium Dome, Wembley, The Olympics, and on and on.

    And they have to pay whatever the bill is – it is just as embarrassing to scrap a project half way thru, as it is to walk it thru despite costs having doubled.

    The Real criticism again should be laid on the door of the contractors – who walked away with the money. They probably offered a low tender to secure the contract – and then took the government for every penny they had. But that is how Capitalism was – IS -built (in case you didn’t know)

  2. I believe that £6.2bn is the original estimate and £20bn is the latest one.

    “Tangible benefits may amount to zero”

    I can’t find this now, but even when the costs were supposed to be £6.2bn the cost-benefit analysis showed that the costs outweighed the benefits. Blair decided to go ahead anyway – he is a mug.

  3. It must be very, very frustrating for those in the medical business to see all this money going down the pan when so many other essential services cannot be afforded.

  4. Q9 I think you have a point about the contractors, but this is a process which is encouraged by the government. Defence contracting is a classic case in point. People are encouraged to submit unrealistically low tenders, and the Gvt then feigns surprise when there are cost overruns.

  5. Actually Quasar9 is largely wrong about the contractors – they aren’t, on the whole, any happier than anyone else. Accenture pulled out after having to provide for an enormous loss. Whatever your view of Richard Granger, one thing he seems to be pretty good at is making life miserable for the contractors.

  6. Yes, but I think the contractors are largely complicit in their own misery. As I said I think the tendering process is such that people are encouraged to submit unrealistically low cost estimates. If no-one did, then the government would a) have a better idea of the eventual cost and b) have to be more honest about the true cost to the taxpayer

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