Select Committee on Science and Technology Minutes of Evidence


Supplementary evidence by Professor Sir John Pattison

WHAT PROPORTION OF NHS AND PHLS SPEND HAS BEEN ON IT AND INFORMATION SERVICES AND IS THE PROPORTION OF SPEND PLANNED TO INCREASE IN THE NEAR FUTURE?

For the NHS

  Recent surveys show that the NHS continues to invest about two per cent or £850 million of its annual baseline revenue allocation on maintaining existing IT and information services and purchasing new IT. This figure compares closely with those used in "Securing Our Future health: taking a long term view" (April 2002)—the report of the independent review of NHS resources requirements by Derek Wanless. Spending has remained constant since the initial figures were collected in 1999-2000.

  For 2003-04 the NHS is planning to maintain its baseline and increase investment in local infrastructure and systems by up to a further £200 million.

  In addition for England there is a National Programme for IT. The sums allocated over the next three years for this are 2003-04 £400 million, 2004-05 £700 million, and 2005-06 £1,200 million. This is in addition to baseline spend.

  The current figures for the PHLS are 2 per cent of revenue on IT and information services and 10 per cent of capital allocation about £0.5 million. With the setting up of the Health Protection Agency the role of the PHLS will change but its spend on IT is likely to continue at this level.

IF YOU ARE ABLE IT WOULD BE HELPFUL IF YOU COULD INDICATE HOW THE PROPORTION OF THE SPEND IN THE NHS ON IT RELATES TO THE PROPORTION OF SPEND IN COMMERCIAL ORGANISATIONS SUCH AS BANKING OR LARGE RETAILERS.

  Financial institutions such as banks and building societies are said to spend eight to 12 per cent of their revenue on IT and information services. In companies with mature systems this has fallen to five per cent. The Wanless Report provides some data on this in the form of spending per employee:
ServiceSpend per employee
NHS£1,000
Gov'n other£3,000
Manu'f£3,500
Utilities£3,900
Financial£9,000


  Please note that this is not an entirely valid comparison. Core NHS services depend on the interaction between people and in many areas the NHS needs more staff than it currently has. IT is being installed to facilitate the work of professionals rather than replace them. In the Financial sector workforce numbers reduced substantially as a result of IT investment so the investment per person is correspondingly high.

Professor Sir John Pattison

3 April 2003


 
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