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DH wastes £150m on IT and private sector treatment centres

The Department of Health wasted over £150m last year in terminating independent sector treatment centre contracts, dumping out-of-date medicines and scrapping IT projects, annual accounts show. 

The DH wrote off the funding in 2010/11 due to ‘store losses', ‘constructive losses', ‘fruitless payments' and losses from ISTCs– in total almost nine times the £17m it saved by slashing ‘non-staff' costs for consultancy, travel and back office operations.

The losses - from the NHS Annual Accounts for 2010/11 - include an £8m pay-off to private firm Clinicenta relating to the termination of the London North ISTC project, and in total, there was a shortfall of £16.1m between the amount the DH paid out to ISTCs and the fees it recovered from PCTs for the programme.

Expired medicines for pandemic flu and to combat nuclear agents cost the DH a combined £90m.

Other losses included £30m compensation to Dutch drugs corporation Synthon relating to a court case from 2008, £8.7m on two IT programmes and £6.1m on ‘assets under construction'.

Dr Richard Vautrey, GPC deputy chair, said: ‘This clearly demonstrates that if the DH really listened to our suggestions, concerns and warnings over the last few years they could have saved the NHS and therefore the taxpayer millions.'

'We have repeatedly highlighted the waste of money spent on ISTCs and the vast amounts of money that could have been better spent, than on the national IT system.'

A DH spokesperson said the value of losses in 2010-11 was down from the previous year and said the Government moved ‘to ensure that any losses are kept to a minimum and represent value for money.'

Addressing the issue of ISTC wastage, Health minister Simon Burns said: ‘All these payments relate to contracts signed under Labour, who gave the private sector preferential treatment in the NHS. The contracts were overpriced and the delivery often inadequate.'

'Our Health and Social Care Bill introduces safeguards that will stop this, whilst ensuring that patients are given the best choice of a wide range of services.'