The £12.4bn NHS National Programme for IT lacks a business case, is unaudited and risks creating supplier monopolies, according to Derek Wanless, the architect of the government’s health spending plans.

In his landmark 2002 review of NHS spending, carried out for the Treasury, Wanless called for a doubling of investment in IT, arguing that this would play a crucial role in future healthcare provision.

But in a follow up report report, the former Nat West bank chief executive turned public spending expert warns, “The extent to which the NHS will benefit from these substantial investments remains unclear.”

Three factors “seem likely” to have an impact on the assumptions of improved productivity set out in the 2002 review, he says. “The first is the failure to develop an ICT strategy whose benefits are likely to outweigh costs.”

Wanless cites the National Audit Office’s finding last year that it was “not demonstrated” that the financial value of the benefits exceeded the costs of NPfIT. “This is a serious criticism, implying either the absence of an original business case for investment or investment made in spite of a business case that did not justify the spending,” Wanless says.

He adds: “Surprisingly, systematic reviews of ICTs show that evidence for key technologies, such as [the National Care Record Service] and [Picture Archiving and Communications Systems], is lacking... It is difficult to understand why Connecting for Health is being allowed to pursue a high-cost, high-risk strategy that cannot be supported by a business case.”

Wanless highlights lack of the audit process he assumed would take place as the second risk factor, noting that “apart from the NAO report the necessary work is not being undertaken and it does not seem possible to obtain reliable data on NHS resources being committed to NPfIT”.

Connecting for Health has made only “negligible investments” of less than £500,000 in evaluation, he adds. “There seems a real risk that the costs and benefits of NPfIT will never be accurately assessed.”

A third factor “may turn out to be the most important”, Wanless warns. This is the fact that NPfIT contracts “risk creating monopolies in various areas of the programme”.

Wanless criticises the creation of NPfIT contracts with a small number of lead contractors, which in turn have subcontracted a small number of software suppliers. “Connecting for Health chose to award a small number of large contracts to consortia charged with designing and implementing the technologies. But they could instead have set out to create a competitive market for IT goods and services,” he says.

He poses a question that could resonate among those – particularly doctors - who have argued for flexibility to bring in alternative suppliers or products. “Is it possible that a robust business case could be created, even now, with a focus on strategies for encouraging a healthy market?”