Like a teenager with his first credit card, the NHS this week boldly ordered a set of computers with money it does not yet have. It signed deals worth £2.7bn over 10 years to create a central electronic health record for every individual in England, and to make it available across London and the northeast.
BT and Accenture won the three contracts. Three further mega deals, taking the Care Records Service to the rest of the country, are due to follow by the end of the year.
The service will be a world first. It will allow NHS staff to call up essential details about every individual wherever they are. Patients will be able to view their records on the internet through a service called My Healthspace - and to opt out entirely if they don't like the idea.
Electronic care records will also plug into the e-booking system being set up under a separate £64.5m contract with Schlumberger Sema. The technological gamble underpins the government's reforms centred on patient choice, John Reid, the health secretary, said: "To help patients make these vital choices, they will need access to more information about the NHS and their own personal health and care history than ever before. This system will equip the NHS to provide that."
The combined bill will take the total cost of the NHS IT programme to more than £5bn, double that allocated by the Treasury so far. Reid said he was confident the Chancellor would cough up the rest: "We'll be OK, we know the envelope within which we're working."
But the NHS is not the only public body apparently chucking money at IT. The Inland Revenue is poised to sign a new deal worth several billion to modernise and run its systems. The Department of Environment Food and Rural Affairs will follow next year. The Home Office is procuring systems for immigration and the probation service. The MoD is shortlisting bidders for a multibillon pound "defence information infrastructure". Even cash-strapped local government is spending. Figures published this week show that councils' IT budgets will grow by 24% in 2003, to £2.5bn.
According to Gartner, an IT market research firm, the British government is spending twice as much money on IT as any other in Europe: $19.6bn (£11.3bn) this year. Ministers will want to show that this is value for money.
Despite a range of measures introduced over the past three years, IT projects continue to go wrong. The latest fiasco to make headlines was the introduction of tax credits. Another project about to come under the spotlight is the Child Support Agency.
Although the industry says that disaster headlines are unfair - EDS, the tax credits contractor, says its pensions credit system introduced at the same time was a notable success - all sides admit that more can be done to run projects better.
The latest idea, unveiled on Monday by the trade association Intellect and the Treasury's Office of Government Commerce, is to involve the industry much earlier in new government programmes to ensure they are technically possible. The approach, called concept viability, involves industry running a sounding board on which departments can test their brainwaves. "All too often the client produces a requirement without a lot of input from the people who have to deliver," said Peter Gershon, the agency's head.
Observers will be sceptical about the value of the idea. IT companies aren't known for modesty about their ability to deliver. Hence a parallel initiative. The industry also published a code of best practice, which it says will establish standards of professionalism in government contracts.
The code contains 10 commitments including: "We will only bid what we believe we can deliver with a high degree of confidence" and "We will rigorously identify, analyse and manager risks". Others commit the industry to "constructive challenge" when it sees flaws in a programme and to be transparent about its assumptions and relations with subcontractors.
The two sides are also trying to promote closer partnering and working relationships. The Treasury will shortly publish guidelines on partnerships between public bodies and IT contractors to avoid the difficulties of the private finance initiative, which was effectively abandoned last summer as a way of funding IT projects.
Neither Gershon nor John Higgins, Intellect's director general, would guarantee that the era of public sector fiascos is over - partly because IT is becoming central to more and more government reforms. "The application of complex IT to solve ever more complex social problems will continue," said Higgins. "Hopefully, things will progress in the right direction."
In yet another initiative, aimed at cutting the upfront costs of big IT projects, the OGC is tipping towards a preference for open source software. Last week, it signed a deal with Sun Microsystems to make available Sun's desktop software available at a preferential rate to government. Scott McNealy, Sun's chief executive, was in the UK last week to sign a deal with Gershon, who praised the "elegant simplicity" of Sun's pricing. Savings on software licences would "free up resources for delivery," he said.
Under the memorandum, Sun's Java Desktop System and Java Enterprise System will be tested in proof of concept trials to be announced next month. Significantly, the NHS systems procured this week include a mixture of Windows and open source platforms.
Further announcements aimed at cutting the cost and improving the management of IT projects are likely soon, including the appointment of a chief information officer for government as part of a shake-up at the very top of Whitehall.
At the NHS, Richard Granger, director general of IT, has a more direct way to concentrate minds. His electronic records contracts are thick with small print about what the suppliers are expected to deliver, and when. "If they don't go into operation, they won't be paid," Granger said. That would at least reduce the financial cost of failure - but not the political cost.
