Statement by Mary Harney TD, Tánaiste and Minister for Health and Children on the PPARS system
“The implementation of an Information Technology project in the old health board systems was a very complex task because of the underlying incoherence of work practices, rostering and payment arrangements across the 11 health boards”.
“The decision of the government in 2003 to establish a single Health Service Executive was taken to address this incoherence in practices and services”.
“The HSE is now established and will deal with legacy issues from the health boards. One of these issues is putting in place an IT system that can carry out present day work of payroll and administration for 120,000 people with a pay budget of around €7 billion, as well as achieving a transition to a more coherent and organized system. The PPARS implementation has shown that there were thousands of different rosters, huge variations in grade structures and many individual work arrangements”.
“In preparing for the implementation of PPARS over 2,500 variations in payment arrangements across the entire health system were discovered. The extent of the incoherence was not known before PPARS implementation work commenced”.
“Given the scale of the project, my concern is to ensure that this complex systems work is carried out under clear accountability and delivering value for money. This is why I asked for a report on the matter from the Secretary General of my Department when the issue was raised with me last summer”.
“I support fully the proposal that the HSE should pause to evaluate where the project stands, what is appropriate to implement now, and how to maintain value for money”.
“Some aspects of the governance of this project in the past have been weak. These were the very weaknesses of the pre-HSE health board system that have now been done away with. The purpose of the HSE is to ensure clear and direct lines of accountability and I am satisfied that now IT projects for the health services will be carried forward with this accountability”.
The PPARS project began in 1997 and initially involved only five health boards plus St James Hospital. The initial cost estimate for these six organisations was €9m. This covered ICT costs only, i.e. it did not cover the related change management costs (one of the problems with HR in the health boards was the very wide variety in practices and procedures, such as variations in the hours worked and the way people were paid).
The ICT system was procured following an EU tendering process and international evaluations (the system is used extensively by multi-national businesses and in Ireland).
In January 2002, Hay Management Consultants undertook an investment appraisal of the project which took account of the cost of the associated change management programme. The estimated cost of the project on that basis was about €90m to €95m in 2002 prices.
When it emerged in 2004 that the costs were likely to exceed this figure, Gartner (an international IT consultancy group) were commissioned to examine value for money aspects of the PPARS project. While that report indicated that spending was in line with peer group spend for such projects, the Department remained concerned about the costs and raised these concerns in November 2004 with the project sponsor (CEO North Western Health Board).
In July this year, the HSE indicated that the costs incurred to end 2004 amounted to some €112m and estimated that a further €55m would have to be spent to end-March to complete the roll out to all 68,000 HSE staff plus St James Hospital.
Greater transparency and accountability in relation to health service spending (including spending on ICT) is one of the benefits which will flow from the Government decision to replace the former separate and autonomous health boards with a single national entity, the HSE, with its own Vote.
In particular, the arrangements now being introduced by the Departments of Health and Children and Finance in relation to ICT expenditure by the HSE emphasise the need for the HSE to:
- identify the totality of spend on ICT and on major projects like PPARS and FISP (a financial management system) and
- put far stronger governance arrangements in place to deal with ICT expenditure. These new structures and arrangements will deliver better value for money and, as a result, improved services for patients.