NHS Scotland before the Microsoft deal

== 'piecemeal' NHS Scotland of wasting money TERRY MURDEN

BUSINESS EDITOR (tmurden@scotlandonsunday.com)==

MICROSOFT’S former director for Scotland has criticised NHS Scotland over inefficient buying practices that mean it is paying up to four times more than the English health service for its IT systems.

Gordon McKenzie, who next week becomes Microsoft’s sales director for European local government, said the NHS north of the Border was suffering from a fractured structure and piecemeal approach to buying.

Down south, the NHS has signed a 10-year agreement with Microsoft that will represent a substantial discount on what would have been paid if each constituent part of the organisation had negotiated with the company.

"But NHS Scotland is still operating in a piecemeal way," said McKenzie. "Royal Bank of Scotland has 100,000 employees and one IT system. The NHS in Scotland is about the same size, but there are 14 NHS trusts and even within each trust there may be four different systems. They even have different e-mail systems."

McKenzie, who was director in Scotland for five years, said it has been "frustrating" because Scotland does not take advantage of its small scale. "There are so many layers of decision-making in Scotland which, let’s face it, is about the size of a small American state which would have one body with a fraction of the resources."

He said that despite government initiatives aimed at modernising its technology and delivery of services and the compact scale of Scotland, "it is just not happening".

McKenzie said: "The NHS in Scotland is facing some huge challenges in terms of technology and reinvestment. To deliver the next generation of health care it will need technology not yet funded or designed. They still have to do some things that England has done three years ago."

He said there was "no plan for convergence" in the NHS and that the public services, including local government, could be heavily streamlined so there was one system for HR, one for payroll, and even one council tax across Scotland, but he said Microsoft was "making more money out of the mess".

McKenzie said: "I would sooner see Scotland pay less. We are not about short-term revenue, but being a leader with a solution. I would rather go to other countries in Europe and say that we have efficient government in Scotland."

A Scottish Executive spokeswoman said there had been a great deal of effort to improve NHS procurement policies and programmes were in place to save £50m a year.

"As part of NHS Scotland’s modernisation agenda, the Best Procurement Implementation Programme was launched in the autumn of 2003," she said. "One of the most important initiatives is introduction of eProcurement by all NHS boards and Special Health Boards."

Eight NHS sites have implemented this initiative with six more due by the end of this financial year.

A National Distribution Centre manages the supply chain and sourcing of goods and services such as stationery, agency nurses, non-sterile gloves and uniforms.

"The programme is expected to achieve recurring savings of at least £50m per annum by the end of 2006-07. Ministers will be monitoring the results of the programme closely," said the spokeswoman.

McKenzie, who had expressed an interest in succeeding Robert Crawford as chief executive of Scottish Enterprise, will be responsible for Microsoft’s strategy and investment in Europe, the Middle East and Africa, though the key focus will be on building local government contracts in France, Germany, Spain, Sweden and the EU accession states.

"Local government is a market we have been ignoring in Europe," he said. "More of our revenue has come from the big corporates so we need to redress the balance and this will be the first time we have looked at it big time." ^[1]