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National Audit Office Press Notice

NHS Executive: The Purchase of the Read Codes and the Management of the NHS Centre for Coding and Classification

Report by the Comptroller and Auditor General
HC 607 1997/98
12 March 1998
ISBN: 0102917981
Price: £10.75

Sir John Bourn, head of the National Audit Office, reported today that there were serious problems in the purchase of the copyright to the Read Codes by the NHS Executive in March 1990, and in the arrangements set up following the purchase, and substantial weaknesses in the management of the NHS Centre for Coding and Classification over the following six years. Sir John considers it essential to the future development of the Read Codes that the NHS Executive commission an independent evaluation to confirm that the investment in Read Codes represents value for money.

The Executive established the NHS Centre for Coding and Classification in April 1990 to develop the Codes, which are a coding system for recording and analysing symptoms, diagnoses and treatments for use in computerised clinical information systems. As part of the purchase agreement, the Executive granted exclusive licence and distribution rights for the Codes to CAMS Limited. The position of Dr Read as Director of the Centre and Chairman and owner of CAMS Limited meant that the Centre had employed him to develop a system in which he had a direct financial interest and created a potential conflict of interest for him.

Sir John paid particular attention in carrying out the review to the standards laid down by the Committee of Public Accounts on the proper conduct of public business. His Report highlights a variety of inappropriate personnel management practices used by the Centre in relation to self employed individuals they engaged and to their own staff, and shortcomings in financial controls at the Centre.

While the Executive have taken specific action to deal with the management problems at the Centre, Sir John recommends that they should disseminate the findings of this report within the NHS to avoid any repetition elsewhere. In particular, Sir John believes the Executive should make it clear that the NHS should not employ people to develop or promote goods or services in which they have a financial interest.

Sir John also reports that there were problems in the way the Executive purchased the copyright of the Codes and deficiencies in the business case for their subsequent development. Between April 1990, when the Centre was established, and 1996-97, the NHS Executive have spent some £19 million on the running of the Centre and its projects.

The version of the Read Codes developed by the Centre for use in the hospital sector, Version 3, are not yet in widespread use in the NHS. Sir John reports that, by September 1997, there were 12 NHS sites in the hospital and community health sector known to be testing and using Read Codes Version 3 in clinical information systems, and the Centre estimated that Version 3 was in use across 35 specialties out of the 66 specialties represented in the Read Codes. The Executive have not yet set any targets for the take-up of Read Codes Version 3 in the NHS, though they are considering mandating Version 3 in the context of their revised Information Management and Technology Strategy to be announced shortly.

As well as recommending an independent evaluation of the Read Codes, Sir John considers it essential that, in managing IT projects, the Executive should carry out rigorous cost benefit analysis before approving them, as required by Treasury guidance, coupled with tightly controlled piloting during development, and before releasing systems to the service as a whole. This reinforces recommendations on management and costs and benefits of projects, in the Committee of Public Accounts' Report on The Hospital Information Support Systems Initiative (HC 97, Session 1996-97).

Notes for Editors

The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office employing some 750 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 25/98
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