Battle over new NHS IT system could cost millions

Healthcare workers are among those who will use the system. Picture: Neil Hanna

A LEGAL challenge over a new computer network for the public sector in Scotland could land taxpayers with a multi-million-pound bill, it has emerged, as a court battle is due to start tomorrow.

NHS National Services Scotland (NHS NSS) has spent the last year negotiating with potential bidders for the Scottish Wide Area Network (SWAN) – a new IT network which it is hoped will be adopted by public sector bodies across the country..

But one of the bidders – BT – launched legal action after it appeared it would not be awarded the contract, which is worth £110 million initially, rising to more than £300m once more organisations come on board.

The company served the summons on NHS NSS on 6 December to start proceedings in the Court of Session, seeking to have the procurement process re-run.

If this does not happen, BT is seeking £20m in damages. NHS NSS has launched a legal bid in an effort to halt BT’s case. With potential savings of £300,000 a month under the new contract reported by NHS NSS, the hold-up will cost the public sector more than £400,000, with further costs if the delay continues.

At present, public bodies use various computer networks, making it difficult for organisations to easily share information securely. The SWAN system is designed to deliver a single network for passing information among bodies and carrying out tasks such as video-conferencing, which is available to all Scottish public service organisations.

Initially, the new network will be used by the NHS, Education Scotland councils including Highland, Argyll and Bute and Orkney, with others joining as their existing contracts run out.

BT, Cable & Wireless, Virgin Media Business and a joint Capita -Updata Infrastructure team were involved in the bidding process. It has been reported that the Capita-Updata Infrastructure bid looked likely to win, but NHS NSS has not yet announced the decision.

A spokesman for NHS NSS said: “By creating a platform open to all of the Scottish public sector, SWAN will create savings that can be reinvested in essential public services.”

He said that NSS had “managed a fair, robust and thorough procurement process resulting in the selection of a preferred bidder. Until this legal action is resolved, NSS cannot award the contract to the preferred bidder. NSS has commenced the legal proceedings required to lift the current action.”

A BT spokesman said they were disappointed by the decision, particularly since the existing N3 national communications network used by the NHS in Scotland, supplied by BT, had delivered “significant benefits over many years”.

The spokesman said they rejected arguments about value for money and said the reason for going to court was they believed the tender process did not make sure the contract was awarded on the basis of the “most economically advantageous bid”, in accordance with regulations.

He added: “BT shares the NSS concern on value to the public purse, hence our reluctant legal action. BT understands that progressive savings would start after services began to move over to the new SWAN network.

“However, we obviously can’t comment on what was included in the preferred bidder’s proposal as to when savings would start and what the scale of those savings would be.”

The spokesman for NHS NSS said: “This legal action has resulted in over a month’s backlog already. Every delay postpones the expected savings and under existing contracts we will pay out larger sums than we would have had to.”