The Department of Health must “urgently review” whether or not to scrap the remainder of the NHS National Programme for IT (NPfIT), according to the dire verdict of a report by the Public Accounts Committee.

Following a particularly heated parliamentary hearing in May with the heads of the Department of Health, and with lead suppliers BT and CSC’s health division chiefs, the committee has concluded the government should consider cutting its losses in spite of the £2.7 billion spent on care records so far.

The government expects to spend £4.3 billion more on the programme, though it has frequently extensively run over on costs since the scheme’s inception nine years ago.

There have been numerous calls for the government to terminate its IT contracts, but it recently renegotiated BT’s deal and is in advanced discussions with CSC.

CSC, which has a £3.1 billion deal, has missed deadlines and delivered only three acute hospital systems in nine years, but the Department of Health insisted it could cost more to cancel CSC’s contract than continue it. The claim, described as “rubbish” by IT industry experts, was questioned by the PAC, which noted that CSC told its own investors it might not receive as much money as contracted if the deal were terminated.

In April, CSC received an advance payment of £200 million from the government, but Department of Health officials failed to mention it in the hearing or subsequent memos to the committee. The MPs branded this omission as “unacceptable” and said they were “surprised”.

Meanwhile BT, whose contract’s value was only cut by seven percent in return for doing half as much work, was branded as dramatically overcharging the NHS. The PAC said hospitals in the programme were “clearly overpaying” for IT systems, costing £9 million instead of a £2 million price tag elsewhere.

In May, prime minister David Cameron publicly warned CSC in the House of Commons that there was a possibility of its contract being terminated, dependent on the outcome of a review by the Cabinet Office. That department has in effect taken control of the programme’s leadership by appointing one of its own executives as Chief Information Officer.

The suppliers have been paid a total of £1.8 billion so far.

The Public Accounts Committee said in its report that it was extremely concerned about the programme’s management, in an environment where the NHS is being restructured to cut costs. Additionally, the project’s senior responsible owner is Sir David Nicholson, the NHS chief executive, whom the PAC said has “significant other responsibilities". During the May hearing, he was unable to say how much time he spent on the project in a normal week.

It also heavily criticised the Department of Health for initiating a top-down project that did not have the support of many clinicians. It added that the department “could have avoided some of the pitfalls and waste if they had consulted earlier with health professionals”.

“Trying to create a one-size-fits-all system in the NHS was a massive risk and has proven to be unworkable,” said Margaret Hodge MP, chair of the committee.

“The £4.3 billion which the Department expects to spend might be better used to buy systems that are proven to work, that are good value for money and which deliver demonstrable benefits to the NHS.

With regards to negotiations to sign a new contract with CSC, Hodge said the company had “should not be rewarded for its failure”. CSC had an “effective monopoly in the provision of care records systems in the North, Eastern and Midlands cluster” she said, given that it is the only supplier under the programme in those regions .

The committee was concerned, she said, that trusts in those areas had “little choice but to continue with outdated interim systems that could be very expensive to maintain and upgrade”.

Across the country, many trusts have decided not to take the systems under the programme, and to procure their own care records technology. But for those sticking with the programme, they had to conduct IT business negotiations through Whitehall and had no direct contractual relationship with suppliers, Hodge said. They also had “no information” about real future costs.